Joint (NASDAQ:JYNT) lowered its full-year system-wide sales outlook after reporting a third-quarter decline in comparable sales, as pressure on consumer spending and lower monthly spending per patient offset gains in membership and retention.
The chiropractic clinic franchisor reported third-quarter revenue of $13.6 million, up 1% from a year earlier. System-wide sales fell 3.1% to $123.3 million, while comparable sales declined 1.9%, an improvement from declines of 2.8% in the second quarter and 4.2% in the first quarter.
President and CEO Sanjiv Razdan said active membership grew during the quarter as efforts to bring back lapsed patients gained momentum. Members also stayed longer and spent more over their relationships with the company, he said, although fewer new patients and lower average monthly spending weighed on comparable sales.
Sales outlook reduced
Joint now expects 2026 system-wide sales of $508 million to $512 million, down from its previous forecast of $519 million to $552 million. It expects comparable sales to decline 3.5% to 2.5%, compared with its earlier range of a 3% decline to 3% growth.
The company reiterated its forecast for consolidated adjusted earnings before interest, taxes, depreciation and amortization of $12.5 million to $13.5 million. It also expects to end 2026 with approximately 50 fewer clinics than at the end of 2025 as it closes underperforming locations.
“Our priority for 2027 is clear. We are single-mindedly focused on improving comp sales,” Razdan said.
Membership gains and lower monthly spending
Razdan said flexible membership options with lower prices and fewer visits have helped convert new patients and prevent cancellations. Patients on those plans are staying longer, he said, but the plans have diluted average monthly spending per patient by roughly $2, enough to offset the near-term benefit of a larger active membership base.
CFO Scott Bowman said the newer plans provide for one or two visits per month, compared with up to four under the standard membership. Patients on the two-visit plan can purchase additional visits for $25 each. Bowman said the company is still refining its sales process to ensure the newer plans generate mostly incremental sales.
To improve patient acquisition, Joint plans to launch an AI-powered lead management platform in January 2027. Razdan said the platform, supported by six AI agents, is intended to follow up on leads, book appointments and answer frequently asked questions.
Profitability improves as refranchising progresses
Third-quarter net income from continuing operations rose to $1.5 million from $290,000 a year earlier. Adjusted EBITDA from continuing operations increased to $2.3 million from $1.4 million.
Including discontinued operations, Joint reported a consolidated net loss of $117,000, or $0.01 per share, compared with net income of $855,000, or $0.06 per diluted share, a year earlier. Consolidated adjusted EBITDA was $3.3 million, in line with the prior-year quarter.
Bowman said royalty fees rose 2% to $8.3 million, partly because refranchised clinics generated royalties that were not included in the prior-year period. The company said its transition to a capital-light franchisor model is substantially complete, with ownership transfers for its 15 remaining company-owned or managed clinics still progressing.
Operating cash flow was negative $128,000 and free cash flow was negative $509,000 in the quarter, primarily reflecting a $1.5 million payment for a 2024 legal settlement, Bowman said. Unrestricted cash stood at $18.3 million at quarter-end, and the company’s $20 million credit line remained undrawn.
Clinic development and capital allocation
Joint ended the quarter with 930 clinics after opening four, closing 15 and refranchising 26 during the period. Management expects clinic count growth to resume in 2027.
Razdan said newer clinics have benefited from more disciplined site selection, well-capitalized operators and stricter pre-opening marketing protocols. The recent average time to break even for clinics opened in 2026 was approximately three months, compared with roughly 18 months historically, he said.
On Oct. 1, Joint reacquired regional developer rights for Texas, covering 141 franchise clinics, for $8 million in cash at closing and up to $2 million in additional consideration tied to regional gross sales over two years. Including Texas, the company announced five territory buybacks in 2026 covering 189 clinics.
Bowman said those territories are expected to reduce annualized regional developer royalties by approximately $3 million, with about one-third of the benefit offset by internal management costs. Joint also repurchased approximately 461,000 shares for $3.8 million during the quarter, completing a $12 million authorization. Its board subsequently approved an additional $5 million authorization.
About Joint (NASDAQ:JYNT)
The Joint Corp. (NASDAQ: JYNT) is a healthcare services company that operates The Joint Chiropractic, a network of chiropractic clinics in the United States. The company focuses on providing routine chiropractic care intended to support musculoskeletal health, mobility and general wellness.
The Joint Chiropractic clinics offer services such as chiropractic adjustments and related wellness care. The business model is designed to provide convenient, accessible care through walk-in visits, membership plans and prepaid packages, with an emphasis on transparent pricing and extended operating hours.
