Revenue Growth from Continuing Operations
Revenue from continuing operations increased 13% year-over-year to $14.8 million in Q1 2026, reflecting early benefits from transitioning clinics to continuing operations.
Adjusted EBITDA and Profitability Improvement
Adjusted EBITDA from continuing operations rose to $2.2 million in Q1 2026 versus $46 thousand in Q1 2025; consolidated adjusted EBITDA grew 22% to $3.5 million, demonstrating improved operating leverage.
Net Income Turnaround
Net income from continuing operations was $1.1 million in Q1 2026 compared with a net loss of $506 thousand in Q1 2025, marking a return to profitability on continuing operations.
Refranchising Milestone — Near Completion
Agreements signed to sell 45 company-owned/managed clinics for $2.3 million (April) plus earlier deals and a March LOI will reduce company-owned clinics from 135 at the start of the initiative to just three upon close, effectively creating a pure-play franchisor.
Improved Cash Flow and Free Cash Flow Conversion
Operating cash flow improved by $2.2 million year-over-year, driving a $2.3 million improvement in free cash flow; management expects free cash flow conversion (FCF / adjusted EBITDA) of 60%–70% under the go-forward model.
Capital Allocation — Share and RD Buybacks
Repurchased ~137,000 shares for $1.1 million (avg $8.35) in Q1 with $4.5 million remaining under the $12 million authorization; completed three RD territory buybacks and four in the last 12 months recovering ~ $1.3 million in RD royalties, and expect ~$450k in annual RD royalty reduction from recent buybacks.
Marketing & Digital Momentum
National marketing launched in November showing sequential member growth month-over-month; AI visibility score improved to 78–80 (from ~70), exceeding industry benchmark and driving higher organic traffic and lead quality.
Pricing and Product Initiatives
Pricing optimization rolled out ($5–$10 increases across ~300 clinics) with little/no patient pushback and no meaningful conversion impact; $10 increase targeted enterprise-wide by Q3; launched new 3-month minimum term, AlignOne offering, CareCredit nationwide and first B2B partnership to improve conversion, retention and access.
Reiterate 2026 Guidance and Pro-Forma Targets
Reiterated full-year guidance: system-wide sales $519M–$552M, comp sales -3% to +3%, consolidated adjusted EBITDA $12.5M–$13.5M, and 30–35 new franchise clinic openings; pro-forma mid-2026 model targets adjusted EBITDA margin ~19%–21% and net income margin ~13%–15%.