The Joint Corp. reported its financial results for the first quarter of 2025, revealing total revenues of $13.1 million, a 7.3% increase from $12.2 million in the same period last year. The growth was primarily driven by higher royalty fees, which rose by 6.4% to $8.1 million, and franchise fees, which surged by 26.3% to $828,519. Advertising fund revenue also saw a 6.5% increase, totaling $2.3 million. Despite the revenue growth, the company reported a net loss from continuing operations of $506,021, compared to a loss of $398,919 in the prior year, reflecting increased selling and marketing expenses and higher costs associated with the expansion of its franchise network.
In terms of operational metrics, The Joint Corp. operated 969 clinics as of March 31, 2025, up from 954 clinics a year earlier. This included 847 franchised clinics, an increase from 819 in the previous year. The company opened five new clinics during the first quarter, a decrease from 23 openings in the same quarter of 2024. The decline in new openings is attributed to the ongoing refranchising strategy, which aims to sell the majority of company-owned clinics to enhance growth and operational efficiency. The company has received significant interest from potential buyers, particularly private equity firms, for its portfolio of clinics.
The filing also highlighted a strategic shift towards refranchising, with plans to sell the full portfolio of company-owned clinics. This strategy is expected to leverage The Joint's strengths in franchising and drive long-term growth. The company has created a framework for this refranchising effort, organizing clinics into clusters for more efficient marketing and sales. As of the end of the first quarter, The Joint had received draft letters of intent for its clinics and was in the final stages of negotiations.
Financially, The Joint's cash and cash equivalents stood at $21.9 million as of March 31, 2025, down from $25.1 million at the end of 2024. The company reported a cash outflow of $3.7 million from operating activities during the quarter, reflecting the impact of increased labor costs and inflation on its operations. The company anticipates that its existing cash resources and anticipated cash flows will be sufficient to meet its operating and investment needs for at least the next 12 months, despite the potential challenges posed by a volatile macroeconomic environment.
Looking ahead, The Joint Corp. remains focused on expanding its franchise network and enhancing its brand recognition in the chiropractic care market. The company believes that the growing consumer interest in affordable wellness solutions positions it well for future growth. However, it also acknowledges the risks associated with labor shortages, inflation, and changing economic conditions, which could impact its operational performance and financial results in the coming quarters.