Improved Profitability and Cash Flow
Operating income increased by over $25 million, adjusted EBITDA was $99 million, and free cash flow was over $60 million. These improvements reflect the company's focus on profitability and cash generation.
Services Segment Growth
The services business, including grooming and veterinary services, continues to be the fastest-growing category, indicating a strong competitive moat and high barriers to entry.
Gross Margin Expansion
Gross margin expanded by approximately 75 basis points to 38.9%, driven by disciplined approaches to pricing and cost management.
Strong Cash Position
Free cash flow for the quarter was $61 million, and year-to-date cash flow from operations nearly doubled versus the prior year to $161 million.
Adjusted EBITDA Guidance Raised
For the full year 2025, adjusted EBITDA is expected to be between $395 million and $397 million, indicating an increase of roughly 18% year over year at the midpoint.