Mister Car Wash Inc.
10/31/2025 | Press release | Distributed by Public on 10/31/2025 04:07
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and related notes included in our 2024 Form 10-K. This discussion contains forward-looking statements based upon our current plans, expectations and beliefs, which are subject to risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in other parts of this Quarterly Report on Form 10-Q and in Part I, Item 1A. "Risk Factors" and in Part II. Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our 2024 Form 10-K.
Who We Are
Mister Car Wash, Inc. is the nation's leading car wash brand, primarily offering express exterior cleaning services, with interior cleaning services at select locations, across 527 car washes in 21 states as of September 30, 2025. We offer a monthly subscription program, which we call the Unlimited Wash Club®("UWC"), as a flexible, quick, and convenient option for customers to keep their cars clean. Our scale and over 25 years of innovation allow us to drive operating efficiencies and invest in training, infrastructure, and technology that improve speed of service, quality, and sustainability and realize strong financial performance.
Factors Affecting Our Business and Trends
We believe that our business and growth depend on a number of factors that present significant opportunities for us and may involve risks and challenges, including those discussed below and in Part I, Item 1A. "Risk Factors" of our 2024 Form 10-K.
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Growth in comparable store sales. Comparable store sales have been a driver of our net revenue growth. We will seek to continue to grow our comparable store sales by increasing the number of UWC Members, maximizing efficiency and throughput of our car wash locations, optimizing marketing spend to add new customers, and increasing customer visitation frequency. |
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Number and loyalty of UWC Members. The UWC program is an important element of our business. UWC Members contribute a large portion of our net revenue and provide recurring revenue through their monthly membership fees. |
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Labor management. Hiring and retaining skilled team members and experienced management represents one of our largest investments. We believe people are the key to our success and we have been able to successfully attract and retain engaged, high-quality team members by paying competitive wages, offering attractive benefit packages, and providing robust training and development opportunities. While the competition for skilled labor is intense and subject to high turnover, we believe our approach to wages and benefits will continue to allow us to attract suitable team members and management to support our growth. |
In addition, beginning in the first half of 2025, the United States government announced new tariffs on goods imported from various countries to the United States. Countries subject to such tariffs have imposed, or may in the future impose, reciprocal or retaliatory tariffs or trade policies. While we believe in the strength of our business, the potential macroeconomic impacts of these actions, if implemented, are difficult to predict and may have a material adverse impact on our business, results of operations and financial condition. Specifically, negative macroeconomic impact on consumers affecting general discretionary income, consumer confidence, or purchasing patterns may reduce demand for our services.
Factors Affecting the Comparability of Our Results of Operations
Our results have been affected by, and may in the future be affected by, the following factors, which must be understood in order to assess the comparability of our period-to-period financial performance and condition.
Greenfield Location Development
While we continue to explore and evaluate acquisition opportunities, more recently, a component of our growth strategy has been to grow through greenfield development of Mister Car Wash locations, with particular focus on Express Exterior Locations, and we anticipate further pursuit of this strategy in the future. We believe such a strategy will provide a more controllable pipeline of unit growth for future locations in existing and adjacent markets.
The comparability of our results may be impacted by the inclusion of financial performance of greenfield locations that have not delivered a full fiscal year of financial results nor matured to average unit volumes, which we typically expect after approximately three full years of operation.
Key Performance Indicators
We prepare and analyze various operating and financial data to assess the performance of our business and to help in the allocation of our resources. The key operating performance and financial metrics and indicators we use are set forth below, as of and for the three and nine months ended September 30, 2025 and 2024.
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
|
(Dollars in thousands) |
2025 |
2024 |
2025 |
2024 |
||||||||||||
|
Financial and Operating Data: |
||||||||||||||||
|
Location count (end of period) |
527 |
501 |
527 |
501 |
||||||||||||
|
Comparable store sales growth |
3.1 |
% |
2.9 |
% |
3.4 |
% |
2.1 |
% |
||||||||
|
UWC Members (in thousands, end of period) |
2,227 |
2,110 |
2,227 |
2,110 |
||||||||||||
|
UWC sales as a percentage of total wash sales |
77 |
% |
74 |
% |
75 |
% |
73 |
% |
||||||||
|
Net income |
$ |
27,411 |
$ |
22,342 |
$ |
83,006 |
$ |
61,070 |
||||||||
|
Net income margin |
10.4 |
% |
9.0 |
% |
10.5 |
% |
8.2 |
% |
||||||||
|
Adjusted EBITDA |
$ |
86,792 |
$ |
78,804 |
$ |
259,487 |
$ |
242,668 |
||||||||
|
Adjusted EBITDA margin |
32.9 |
% |
31.6 |
% |
32.8 |
% |
32.6 |
% |
||||||||
Location Count (end of period)
Our location count refers to the total number of car wash locations at the end of a period, inclusive of new greenfield locations and acquired locations and offset by closed locations. The total number of locations that we operate, as well as the timing of location openings, acquisitions, and closings, have, and will continue to have, an impact on our performance. In the three and nine months ended September 30, 2025, we increased our location count by 5 and 13 greenfield locations, respectively.
Our Express Exterior Locations, which offer express exterior cleaning services, comprise 464 of our current locations and our Interior Cleaning Locations, which offer both express exterior cleaning services and interior cleaning services, comprise 63 of our current locations.
Comparable Store Sales Growth
We consider a location a comparable store on the first day of the 13th full calendar month following a greenfield location's first day of operations, or for acquired locations, the first day of the 13th full calendar month following the date of acquisition. A location converted from an Interior Cleaning Location format to an Express Exterior Location format is excluded when the location did not offer interior cleaning services in the current period but did offer interior cleaning services in the prior year period. Comparable store sales growth is the percentage change in total wash sales of all comparable store car washes.
Increasing the number of new locations is a component of our growth strategy and as we continue to execute on our growth strategy, we expect that a significant portion of our sales growth will be attributable to non-comparable store sales. Accordingly, comparable store sales are only one measure we use to assess the success of our growth strategy.
UWC Members (end of period)
Members of our monthly subscription service are known as Unlimited Wash Club Members, or UWC Members. We view the number of UWC Members and the growth in the number of UWC Members on a net basis from period to period as key indicators of our revenue growth. The number of UWC Members has grown over time as we have acquired new customers and retained previously acquired customers. There were approximately 2.2 million UWC Members as of September 30, 2025. UWC Members grew by approximately 5% from December 31, 2024 through September 30, 2025.
UWC Sales as a Percentage of Total Wash Sales
UWC sales as a percentage of total wash sales represents the penetration of our subscription membership program as a percentage of our overall wash sales. Total wash sales are defined as the net revenue generated from express exterior cleaning services and interior cleaning services for both UWC Members and retail customers. UWC sales as a percentage of total wash sales is calculated as sales generated from UWC Members as a percentage of total wash sales. UWC sales were 77% and 74% of our total wash sales for the three months ended September 30, 2025 and 2024, respectively. UWC sales were 75% and 73% of our total wash sales for the nine months ended September 30, 2025 and 2024, respectively.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA is a non-GAAP measure of our operating performance and should not be considered as an alternative to net income as a measure of financial performance or any other performance measure derived in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"). Adjusted EBITDA is defined as net income before interest expense, net, income tax provision, depreciation and amortization expense, (gain) loss on sale of assets, stock-based compensation expense, acquisition expenses, non-cash rent expense, debt refinancing costs, and other nonrecurring charges. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by net revenues for a given period.
We present Adjusted EBITDA because we believe it assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our ongoing operating performance. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in our presentation of Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. There can be no assurance that we will not modify the presentation of Adjusted EBITDA in future periods, and any such modification may be material. In addition, Adjusted EBITDA may not be comparable to similarly titled measures used by other companies in our industry or across different industries.
Management believes Adjusted EBITDA is helpful in highlighting trends in our core operating performance compared to other measures, which can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments. We also use Adjusted EBITDA in connection with establishing discretionary annual incentive compensation; to evaluate in conjunction with U.S. GAAP measures of performance, the effectiveness of our business strategies; to make budgeting decisions; and because our Credit Agreement uses measures similar to Adjusted EBITDA to measure our compliance with certain covenants.
Adjusted EBITDA and Adjusted EBITDA Margin are not recognized terms under GAAP and should not be considered as a substitute for net income, net income margin, or any other financial measure presented in accordance with GAAP. Adjusted EBITDA has its limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP.
The following is a reconciliation of net income to Adjusted EBITDA for the periods presented.
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
|
(Dollars in thousands) |
2025 |
2024 |
2025 |
2024 |
||||||||||||
|
Net income |
$ |
27,411 |
$ |
22,342 |
$ |
83,006 |
$ |
61,070 |
||||||||
|
Interest expense, net |
14,054 |
20,653 |
45,249 |
60,931 |
||||||||||||
|
Income tax provision |
10,388 |
6,590 |
30,732 |
28,436 |
||||||||||||
|
Depreciation and amortization expense |
22,400 |
21,182 |
65,055 |
61,038 |
||||||||||||
|
(Gain) loss on sale of assets, net (a) |
2,759 |
(1,916 |
) |
3,549 |
(552 |
) |
||||||||||
|
Stock-based compensation expense (b) |
6,601 |
6,774 |
20,991 |
20,367 |
||||||||||||
|
Acquisition expenses (c) |
1,201 |
863 |
3,814 |
1,976 |
||||||||||||
|
Non-cash rent expense (d) |
1,647 |
1,560 |
5,265 |
4,542 |
||||||||||||
|
Debt refinancing costs (e) |
- |
- |
- |
1,882 |
||||||||||||
|
Employee retention credit |
- |
- |
- |
(5,189 |
) |
|||||||||||
|
Other (f) |
331 |
756 |
1,826 |
8,167 |
||||||||||||
|
Adjusted EBITDA |
$ |
86,792 |
$ |
78,804 |
$ |
259,487 |
$ |
242,668 |
||||||||
|
Net revenues |
$ |
263,417 |
$ |
249,329 |
$ |
790,488 |
$ |
743,555 |
||||||||
|
Net income margin |
10.4 |
% |
9.0 |
% |
10.5 |
% |
8.2 |
% |
||||||||
|
Adjusted EBITDA margin |
32.9 |
% |
31.6 |
% |
32.8 |
% |
32.6 |
% |
||||||||
(a)
Consists of losses on the disposition of assets associated with sale leaseback transactions, the sale of property and equipment, and store closures or the impairments associated with store closures and relocations.
(b)
Represents non-cash expense associated with our stock-based compensation as well as related taxes.
(c)
Represents expenses incurred in strategic acquisitions and greenfield development. Expenses include professional fees for accounting and auditing services, appraisals, legal fees and financial services, dead deal costs, one-time costs associated with supplies for rebranding the acquired stores, and distinct travel expenses for related, distinct integration efforts by team members who are not part of our dedicated integration team.
(d)
Represents the difference between cash paid for rent expense and U.S. GAAP rent expense.
(e)
Represents non-deferred legal fees and other expenses related to Credit Agreement amendments, and loss on extinguishment of debt associated with amendments to the debt facilities.
(f)
Consists of other items as determined by management not to be reflective of our ongoing operating performance, such as costs associated with severance pay, legal settlements and legal fees related to contract terminations, and nonrecurring strategic project costs.
Results of Operations for the Three and Nine Months Ended September 30, 2025 and 2024
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||||||||
|
(Dollars in thousands) |
2025 |
2024 |
2025 |
2024 |
||||||||||||||||||||||||||||
|
Net revenues |
$ |
263,417 |
100 |
% |
$ |
249,329 |
100 |
% |
$ |
790,488 |
100 |
% |
$ |
743,555 |
100 |
% |
||||||||||||||||
|
Costs and expenses |
||||||||||||||||||||||||||||||||
|
Cost of labor and chemicals |
76,581 |
29 |
% |
73,617 |
30 |
% |
227,460 |
29 |
% |
217,966 |
29 |
% |
||||||||||||||||||||
|
Other store operating expenses |
109,531 |
42 |
% |
102,607 |
41 |
% |
328,048 |
41 |
% |
298,953 |
40 |
% |
||||||||||||||||||||
|
General and administrative |
22,693 |
9 |
% |
25,436 |
10 |
% |
72,465 |
9 |
% |
80,058 |
11 |
% |
||||||||||||||||||||
|
(Gain) loss on sale of assets, net |
2,759 |
1 |
% |
(1,916 |
) |
(1 |
)% |
3,549 |
0 |
% |
(552 |
) |
(0 |
)% |
||||||||||||||||||
|
Total costs and expenses |
211,564 |
80 |
% |
199,744 |
80 |
% |
631,522 |
80 |
% |
596,425 |
80 |
% |
||||||||||||||||||||
|
Operating income |
51,853 |
20 |
% |
49,585 |
20 |
% |
158,966 |
20 |
% |
147,130 |
20 |
% |
||||||||||||||||||||
|
Other (income) expense |
||||||||||||||||||||||||||||||||
|
Interest expense, net |
14,054 |
5 |
% |
20,653 |
8 |
% |
45,249 |
6 |
% |
60,931 |
8 |
% |
||||||||||||||||||||
|
Loss on extinguishment of debt |
- |
0 |
% |
- |
0 |
% |
- |
0 |
% |
1,882 |
0 |
% |
||||||||||||||||||||
|
Other income |
- |
0 |
% |
- |
0 |
% |
(21 |
) |
(0 |
)% |
(5,189 |
) |
(1 |
)% |
||||||||||||||||||
|
Total other expense, net |
14,054 |
5 |
% |
20,653 |
8 |
% |
45,228 |
6 |
% |
57,624 |
8 |
% |
||||||||||||||||||||
|
Income before taxes |
37,799 |
14 |
% |
28,932 |
12 |
% |
113,738 |
14 |
% |
89,506 |
12 |
% |
||||||||||||||||||||
|
Income tax provision |
10,388 |
4 |
% |
6,590 |
3 |
% |
30,732 |
4 |
% |
28,436 |
4 |
% |
||||||||||||||||||||
|
Net income |
$ |
27,411 |
10 |
% |
$ |
22,342 |
9 |
% |
$ |
83,006 |
11 |
% |
$ |
61,070 |
8 |
% |
||||||||||||||||
Net Revenues
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
|
(Dollars in thousands) |
2025 |
2024 |
2025 |
2024 |
||||||||||||
|
Net revenues |
$ |
263,417 |
$ |
249,329 |
$ |
790,488 |
$ |
743,555 |
||||||||
|
Dollar change compared to prior period |
$ |
14,088 |
$ |
46,933 |
||||||||||||
|
Percentage change compared to prior period |
6 |
% |
6 |
% |
||||||||||||
The increase in net revenues for the three months ended September 30, 2025 was primarily attributable to growth in UWC Members, favorable wash package mix, price increases, and the year-over-year addition of 26 locations.
The increase in net revenues for the nine months ended September 30, 2025 was primarily attributable to growth in UWC Members, favorable wash package mix, price increases, and the year-over-year addition of 26 locations.
Cost of Labor and Chemicals
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
|
(Dollars in thousands) |
2025 |
2024 |
2025 |
2024 |
||||||||||||
|
Cost of labor and chemicals |
$ |
76,581 |
$ |
73,617 |
$ |
227,460 |
$ |
217,966 |
||||||||
|
Percentage of net revenues |
29 |
% |
30 |
% |
29 |
% |
29 |
% |
||||||||
|
Dollar change compared to prior period |
$ |
2,964 |
$ |
9,494 |
||||||||||||
|
Percentage change compared to prior period |
4 |
% |
4 |
% |
||||||||||||
The increase in cost of labor and chemicals for the three months ended September 30, 2025 was primarily attributable to an increase in volume and the year-over-year addition of 26 locations, as well as increased store labor rates, partially offset by labor optimization and lower chemical costs due to new formulations and strategic partnerships.
The increase in cost of labor and chemicals for the nine months ended September 30, 2025 was primarily attributable to an increase in volume and the year-over-year addition of 26 locations, as well as increased store labor rates, partially offset by labor optimization and lower chemical costs due to new formulations and strategic partnerships.
Other Store Operating Expenses
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
|
(Dollars in thousands) |
2025 |
2024 |
2025 |
2024 |
||||||||||||
|
Other store operating expenses |
$ |
109,531 |
$ |
102,607 |
$ |
328,048 |
$ |
298,953 |
||||||||
|
Percentage of net revenues |
42 |
% |
41 |
% |
41 |
% |
40 |
% |
||||||||
|
Dollar change compared to prior period |
$ |
6,924 |
$ |
29,095 |
||||||||||||
|
Percentage change compared to prior period |
7 |
% |
10 |
% |
||||||||||||
The increase in other store operating expenses for the three months ended September 30, 2025 was primarily attributable to the year-over-year addition of 26 locations, increased utilities and facilities expenses, as well as additional rent expense for the addition of 30 net new land and building leases between periods.
The increase in other store operating expenses for the nine months ended September 30, 2025 was primarily attributable to the year-over-year addition of 26 locations, increased utilities and maintenance expenses, as well as additional rent expense for the addition of 30 net new land and building leases between periods.
General and Administrative
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
|
(Dollars in thousands) |
2025 |
2024 |
2025 |
2024 |
||||||||||||
|
General and administrative |
$ |
22,693 |
$ |
25,436 |
$ |
72,465 |
$ |
80,058 |
||||||||
|
Percentage of net revenues |
9 |
% |
10 |
% |
9 |
% |
11 |
% |
||||||||
|
Dollar change compared to prior period |
$ |
(2,743 |
) |
$ |
(7,593 |
) |
||||||||||
|
Percentage change compared to prior period |
(11 |
)% |
(9 |
)% |
||||||||||||
The decrease in general and administrative expenses for the three months ended September 30, 2025 was primarily attributable to lower amortization expense due to intangible assets that fully amortized in the prior year and decreases in other expenses.
The decrease in general and administrative expenses for the nine months ended September 30, 2025 was primarily attributable to the debt refinancing costs in the prior year and decreased amortization expense due to intangible assets that fully amortized in the prior year, partially offset by investments in marketing as well as other costs to support strategic growth initiatives.
(Gain) Loss on Sale of Assets, Net
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
|
(Dollars in thousands) |
2025 |
2024 |
2025 |
2024 |
||||||||||||
|
(Gain) loss on sale of assets, net |
$ |
2,759 |
$ |
(1,916 |
) |
$ |
3,549 |
$ |
(552 |
) |
||||||
|
Percentage of net revenues |
1 |
% |
(1 |
)% |
0 |
% |
(0 |
)% |
||||||||
|
Dollar change compared to prior period |
$ |
4,675 |
$ |
4,101 |
||||||||||||
|
Percentage change compared to prior period |
(244 |
)% |
(743 |
)% |
||||||||||||
The change in (gain) loss on sale of assets, net for the three months ended September 30, 2025 was primarily driven by gains associated with sale-leaseback activity in the prior year compared to losses associated with sale-leaseback activity and asset retirements in the current year.
The change in (gain) loss on sale of assets, net for the nine months ended September 30, 2025 was primarily driven by gains associated with sale-leaseback activity in the prior year compared to losses associated with sale-leaseback activity and asset retirements in the current year.
Total Other Expense, Net
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
|
(Dollars in thousands) |
2025 |
2024 |
2025 |
2024 |
||||||||||||
|
Total other expense, net |
$ |
14,054 |
$ |
20,653 |
$ |
45,228 |
$ |
57,624 |
||||||||
|
Percentage of net revenues |
5 |
% |
8 |
% |
6 |
% |
8 |
% |
||||||||
|
Dollar change compared to prior period |
$ |
(6,599 |
) |
$ |
(12,396 |
) |
||||||||||
|
Percentage change compared to prior period |
(32 |
)% |
(22 |
)% |
||||||||||||
The decrease in total other expense, net for the three months ended September 30, 2025 was attributable to a decrease in interest expense, net driven by lower average interest rates, $91.6 million of principal payments on the First Lien Term Loan, effective interest rate swap, and reduction in outstanding borrowings under the Revolving Commitment between periods.
The decrease in total other expense, net for the nine months ended September 30, 2025 was attributable to a decrease in interest expense, net driven by lower average interest rates, and $91.6 million of principal payments on the First Lien Term Loan between periods, as well as $1.9 million loss on extinguishment of debt related to our debt refinancing activity in the prior year, partially offset by the $5.2 million gain related to the recognition of an employee retention credit in the prior year.
Income Tax Provision
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
|
(Dollars in thousands) |
2025 |
2024 |
2025 |
2024 |
||||||||||||
|
Income tax provision |
$ |
10,388 |
$ |
6,590 |
$ |
30,732 |
$ |
28,436 |
||||||||
|
Percentage of net revenues |
4 |
% |
3 |
% |
4 |
% |
4 |
% |
||||||||
|
Dollar change compared to prior period |
$ |
3,798 |
$ |
2,296 |
||||||||||||
|
Percentage change compared to prior period |
58 |
% |
8 |
% |
||||||||||||
The increase in income tax provision for the three months ended September 30, 2025 was primarily driven by the increase in pre-tax income, tax benefits from discrete items in the prior year and unfavorable income tax impact from equity awards activity as compared to the prior year.
The increase in income tax provision for the nine months ended September 30, 2025 was primarily driven by the increase in pre-tax income reduced by the favorable income tax impact from equity awards activity compared to the prior year.
Liquidity and Capital Resources
Funding Requirements
Our primary requirements for liquidity and capital are to fund our investments in our core business, which includes lease payments, pursue greenfield location development and acquisitions of new locations, and to service our indebtedness. Our primary sources of liquidity are cash provided by operations, sale-leaseback transactions, and utilization of our credit facilities.
As of September 30, 2025 and December 31, 2024, we had cash and cash equivalents of $35.7 million and $67.5 million, respectively, and $299.9 million and $299.8 million, respectively, of available borrowing capacity under our Revolving Commitment.
For a description of our credit facilities and our recent debt refinancing, please see Note 7 Debt in the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. As of September 30, 2025, we were in compliance with the covenants under the Credit Agreement.
We believe that our existing sources of liquidity and capital will be sufficient to finance our growth strategy and operations, as well as planned capital expenditures, for at least the next 12 months and for the foreseeable future.
Cash Flows for the Nine Months Ended September 30, 2025 and 2024
Operating Activities. For the nine months ended September 30, 2025, net cash provided by operating activities was $225.7 million and was comprised of net income of $83.0 million, increased by $159.3 million as a result of non-cash adjustments including depreciation and amortization expense, stock-based compensation expense, non-cash lease expense, deferred income taxes, (gain) loss on sale of assets, net, and amortization of debt issuance costs. Changes in working capital balances decreased cash provided by operating activities by $16.6 million and were primarily driven by operating lease payments partially offset by the change in timing of payment and receipt of receivables, payables, and accrued expenses.
For the nine months ended September 30, 2024, net cash provided by operating activities was $198.8 million and was comprised of net income of $61.1 million, increased by $144.5 million as a result of non-cash adjustments comprised primarily of depreciation and amortization expense, stock-based compensation expense, non-cash lease expense, deferred income taxes, a gain on disposal of property and equipment, a loss on extinguishment of debt, and amortization of debt issuance costs. Changes in working capital balances decreased cash provided by operating activities by $6.8 million and were primarily driven by operating lease payments and increases in other receivables, prepaid expenses and other current assets, partially offset by decreases to accounts receivable, net, inventory and other noncurrent assets and liabilities and increases in accounts payable, accrued expenses, and deferred revenue.
Investing Activities. For the nine months ended September 30, 2025, net cash used in investing activities was $171.8 million and was primarily comprised of investments in property and equipment to support our greenfield development and other initiatives, offset by the sale of property and equipment.
For the nine months ended September 30, 2024, net cash used in investing activities was $223.5 million and was primarily comprised of investments in property and equipment to support our greenfield development and other initiatives, offset by the sale of property and equipment.
Financing Activities. For the nine months ended September 30, 2025, net cash used in financing activities was $85.8 million and was primarily comprised of payments for the First Lien Term Loan and finance lease obligations, partially offset by proceeds related to the issuance of common stock under employee plans.
For the nine months ended September 30, 2024, net cash provided by financing activities was $22.1 million and was primarily comprised of proceeds from our refinancing of the First Lien Term Loan and Revolving Commitment, partially offset by payments for payroll tax withholdings to settle cashless stock option exercises, payments on debt borrowings and Revolving Commitment, and payments of deferred financing costs due to our debt refinancing.
Free Cash Flow
Free cash flow and free cash flow excluding growth capital expenditures are non-GAAP liquidity measures used by management as additional cash flow metrics. Free cash flow is defined as net cash provided by operating activities less purchases of property and equipment in a period. Free cash flow excluding growth capital expenditures is defined as operating cash flows less purchases of maintenance property and equipment. Free cash flow includes the impact of capital expenditures, providing a supplemental view of cash generation. Free cash flow excluding growth capital expenditures includes purchases of property and equipment in a period, which are uses of cash that are necessary to maintain the Company's existing business operations, including its washes and support functions. Free cash flow excluding growth capital expenditures provides a supplemental view of cash flow generation before investments in growth capital, which expand future business operations, including the opening or improvement of washes and service capabilities. Free cash flow and free cash flow excluding growth capital expenditures have certain limitations, including that they do
not reflect adjustments for certain non-discretionary cash expenditures, such as mandatory debt repayments or payments made for business acquisitions.
The following is a reconciliation of free cash flow and free cash flow excluding growth capital expenditures to net cash provided by operating activities for the periods presented.
|
Nine Months Ended September 30, |
||||||||
|
2025 |
2024 |
|||||||
|
Net cash provided by operating activities |
$ |
225,733 |
$ |
198,840 |
||||
|
Adjustments: |
||||||||
|
Less: Maintenance capital expenditures |
(23,717 |
) |
(24,624 |
) |
||||
|
Free cash flow excluding growth capital expenditures |
202,016 |
174,216 |
||||||
|
Less: Growth capital expenditures |
(154,937 |
) |
(235,272 |
) |
||||
|
Free cash flow |
$ |
47,079 |
$ |
(61,056 |
) |
|||
Critical Accounting Policies and Estimates
Our consolidated financial statements have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate the continued appropriateness of our accounting policies and estimates based on the facts and circumstances. Actual results could differ from those estimates.
The significant accounting policies and estimates used in preparation of the consolidated financial statements are described in our 2024 Form 10-K. There have been no material changes to our significant accounting policies during the three and nine months ended September 30, 2025.
Recent Accounting Pronouncements
See Note 2 Summary of Significant Accounting Policies to our consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for a discussion of recent accounting pronouncements.
Mister Car Wash Inc. published this content on October 31, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 31, 2025 at 10:08 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]