Driven Brands Holdings Inc.

Previous wording

The following discussion and analysis for Driven Brands Holdings Inc. and Subsidiaries (“Driven Brands,” “the Company,” “we,” “us,” or “our”) should be read in conjunction with our consolidated financial statements and the related notes to our consolidated financial statements included elsewhere in this Quarterly Report. We operate on a 52-or 53-week fiscal year, which ends on the last Saturday in December. The three and nine months ended September 27, 2025 and September 28, 2024 were both 13 and 39 week periods, respectively.

Current wording

The following discussion and analysis for Driven Brands Holdings Inc. and Subsidiaries (“Driven Brands,” “the Company,” “we,” “us,” or “our”) should be read in conjunction with our consolidated financial statements and the related notes to our consolidated financial statements included elsewhere in this Quarterly Report. We operate on a 52-or 53-week fiscal year, which ends on the last Saturday in December. The three months ended March 28, 2026 and March 29, 2025, were both 13 week periods.

Previous wording

Driven Brands is the largest automotive services company in North America with a growing and highly-franchised base of approximately 4,900 locations across 49 states in the U.S. and 13 other countries. Our scaled, diversified platform fulfills an extensive range of core retail and commercial automotive needs, including paint, collision, glass, and repair services, as well as a variety of more frequent services, such as oil changes and car washes. We have continued to grow our base of consistent recurring revenue through same store sales and adding new franchised and company-operated stores. Driven Brands generated net revenue of approximately $536 million and $1.6 billion during the three and nine months ended September 27, 2025, respectively, an increase of 7% and 7% compared to the prior year period, and system-wide sales of approximately $1.6 billion and $4.8 billion during the three and nine months ended September 27, 2025, respectively, a respective increase of 5% and 3% compared to the prior year period.

Current wording

Driven Brands is the largest automotive services company in North America with a growing and highly-franchised base of over 4,200 locations across 49 U.S. states and Canada. Our scaled, diversified platform fulfills an extensive range of core retail and commercial automotive needs, including oil change, paint, collision, glass, and repair services. We have continued to consistently grow our revenue through same store sales growth and adding new franchised and company-operated stores. Driven Brands generated net revenue of approximately $484 million during the three months ended March 28, 2026, an increase of 8% compared to the prior year and system-wide sales of approximately $1.6 billion during the three months ended March 28, 2026, an increase of 6% from the prior year.

Previous wording

We have experienced and expect to continue experiencing softening demand within certain businesses, primarily as a result of inflationary pressures, increased competition, industry and macroeconomic dynamics, tariffs, and negative weather patterns.

Current wording

The broader operating environment in which we conduct our business is subject to a number of macroeconomic and industry-specific factors that may affect our performance. We have experienced softening demand within certain businesses, primarily as a result of inflationary pressures, increased competition, industry and macroeconomic dynamics, possible future tariffs, global conflicts, and negative weather patterns. We believe the impact of inflation on consumer demand and our cost structure could be significant throughout the remainder of 2026.

Previous wording

In the first quarter of 2025, the Company reorganized its operating segments to simplify the reporting structure, align with the Company’s current business model, and increase transparency for our investors, which resulted in a change to the reportable segments. As a result, the Company has the following reportable segments: Take 5, Franchise Brands, and Car Wash. Prior period information has been recast to reflect the current reportable segments.

Current wording

In the fourth quarter of 2025, as a result of the announcement of the sale of its International Car Wash (“ICW”) business and the related results reflected within discontinued operations, the Company re-evaluated its operating segments, which resulted in a change to the reportable segments. The Company now has the following reportable segments: Take 5, Franchise Brands, and Auto Glass Now. Prior period information has been recast to reflect the current reportable segments.

Previous wording

The net assets and operations of the disposal group met the criteria to be classified as “discontinued operations” and are reported as such in all periods. Unless otherwise noted, the discussion throughout Part I Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-Q, including the various metrics cited, excludes the U.S. Car Wash business and pertains only to our continuing operations. For information on discontinued operations, refer to Note 2 and Note 13 to our consolidated financial statements.

Current wording

The net assets and operations of these disposal groups each met the criteria to be classified as discontinued operations and are reported as such in all periods presented. Unless otherwise noted, the discussion throughout Part I Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-Q, including the various metrics cited, excludes the U.S. Car Wash and ICW businesses and pertains only to our continuing operations. For information on discontinued operations, refer to Note 2 and Note 12 to our consolidated financial statements.

Previous wording

Q3 2025 Three Months Ended Highlights and Key Performance Indicators

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Q1 2026 Highlights and Key Performance Indicators

Previous wording

We recognized net income from continuing operations of $90 million, or $0.55 per diluted share, for the nine months ended September 27, 2025, compared to $37 million, or $0.23 per diluted share, for the nine months ended September 28, 2024. The increase of approximately $53 million was primarily due to the following:

Current wording

We recognized net income from continuing operations of $24 million, or $0.14 per diluted share, for the three months ended March 28, 2026, compared to $14 million, or $0.08 per diluted share, for the three months ended March 29, 2025. The increase of approximately $10 million was primarily due to the following:

Previous wording

•reduced share-based compensation expense; and

Current wording

•reduced share-based compensation of $6 million primarily associated with pre-IPO awards that vested in the second quarter of 2025.

Previous wording

Adjusted Net Income was $160 million for the nine months ended September 27, 2025 compared to $138 million for the nine months ended September 28, 2024. This increase of approximately $22 million was primarily due to the following:

Current wording

Adjusted Net Income was $49 million for the three months ended March 28, 2026 compared to $39 million for the three months ended March 29, 2025. This increase of approximately $10 million was primarily due to the following:

Previous wording

•costs directly associated with sales growth in the period; and

Current wording

•increased costs directly associated with sales growth in the period; and

Previous wording

•Consolidated same store sales increased by 1.7%.

Current wording

•Consolidated same store sales increased by 2.1%.

Previous wording

•Consolidated system-wide sales increased $73 million.

Current wording

•Consolidated system-wide sales increased $86 million.

Previous wording

•The Company added 167 net new stores during the trailing twelve months.

Current wording

•The Company added 202 net new stores during the trailing twelve months.

Previous wording

System-wide sales —System-wide sales represent the total of net sales for our franchised, independently-operated, and company-operated stores. This measure allows management to better assess the total size and health of each segment, our overall store performance, and the strength of our market position relative to competitors. Sales at franchised stores are not included as revenue in our results from continuing operations, but rather, we include franchise royalties and fees that are derived from sales at franchised stores.

Current wording

System-wide sales —System-wide sales represent the total of net sales for our franchised and company-operated stores, regardless of ownership. This measure allows management to better assess the total size and health of each segment, our overall store performance, and the strength of our market position relative to competitors. Sales at franchised stores are not included as revenue in our results from continuing operations, but rather, we include franchise royalties and fees that are derived from sales at franchised stores.Mobile units are associated with a parent store, and their sales are reflected in overall system-wide sales.

Previous wording

Store count — Store count reflects the number of franchised, independently-operated, and company-operated stores open at the end of the reporting period. Management reviews the number of new, closed, acquired, and divested stores to assess net unit growth and drivers of trends in system-wide sales, franchise royalties and fees revenue, company-operated store sales, and independently-operated store sales.

Current wording

Store count — Store count reflects the number of franchised and company-operated stores open at the end of the reporting period. Management reviews the number of new, closed, acquired, and divested stores to assess net unit growth and drivers of trends in system-wide sales, franchise royalties and fees revenue and company-operated store sales. Temporary closings remain in the respective store counts.

Previous wording

Same store sales —Same store sales reflect the change in sales year-over-year for the same store base. We define the same store base to include all franchised, independently-operated, and company-operated stores open for comparable weeks during the given fiscal period in both the current and prior year, which may be different from how others define similar terms. This measure highlights the performance of existing stores, while excluding the impact of new store openings and closures and acquisitions and divestitures.

Current wording

Same store sales —Same store sales reflect the change in comparable sales year-over-year for the same store sale base. We define the same store sale base to include all franchised and company-operated stores open for comparable weeks during the given fiscal period in both the current and prior year, which may be different from how others define similar terms. This measure highlights the performance of existing stores, while excluding the impact of new store openings, closures, acquisitions, and divestitures.

Previous wording

Adjusted EBITDA —We define Adjusted EBITDA as earnings from continuing operations before interest expense, net, income tax expense, and depreciation and amortization, with further adjustments for acquisition related costs, equity compensation, loss on debt extinguishment, foreign currency transaction related gains or losses, cloud computing amortization, and certain non-recurring and non-core, infrequent or unusual charges. Adjusted EBITDA is a supplemental measure of operating performance of our segments and may not be comparable to similar measures reported by other companies. Adjusted EBITDA is a performance metric utilized by our Chief Operating Decision Maker to allocate resources to and assess performance of our segments. Refer to Note 4 in our consolidated financial statements for a reconciliation of reportable segment Adjusted EBITDA to income from continuing operations before taxes for the three and nine months ended September 27, 2025 and September 28, 2024.

Current wording

Adjusted EBITDA —We define Adjusted EBITDA as earnings from continuing operations before interest expense, net, income tax expense, and depreciation and amortization, with further adjustments for acquisition related costs, cloud computing amortization, share-based compensation, loss on debt extinguishment, foreign currency transaction related gains or losses, and certain non-recurring and non-core, infrequent or unusual charges. Adjusted EBITDA is a supplemental measure of operating performance of our segments and may not be comparable to similar measures reported by other companies. Adjusted EBITDA is a performance metric utilized by our Chief Operating Decision Maker to allocate resources to and assess performance of our segments. Refer to Note 4 in our consolidated financial statements for a reconciliation of reportable segment Adjusted EBITDA to income from continuing operations before taxes for the three months ended March 28, 2026 and March 29, 2025.

Previous wording

The following table sets forth our key performance indicators for the three and nine months ended September 27, 2025 and September 28, 2024:

Current wording

The following table sets forth our key performance indicators for the three months ended March 28, 2026 and March 29, 2025:

Previous wording

To supplement our consolidated financial statements prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures throughout this Quarterly Report, as described further below, to provide investors with additional useful information about our financial performance, to enhance the overall understanding of our past performance and future prospects and to allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making.

Current wording

To supplement our consolidated financial statements prepared and presented in accordance with U.S. GAAP, we use certain non-GAAP financial measures throughout this Quarterly Report, as described further below, to provide investors with additional useful information about our financial performance, to enhance the overall understanding of our past performance and future prospects and to allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making.

Previous wording

Non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. As a result, non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, our consolidated financial statements prepared and presented in accordance with GAAP.

Current wording

Non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by U.S. GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. As a result, non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, our consolidated financial statements prepared and presented in accordance with U.S. GAAP.

Previous wording

Adjusted Net Income/Adjusted Earnings per Share —We define Adjusted Net Income as net income from continuing operations calculated in accordance with GAAP, adjusted for acquisition related costs, equity compensation, loss on debt extinguishment, cloud computing amortization, and certain non-recurring, non-core, infrequent or unusual charges, amortization related to acquired intangible assets, and the tax effect of the adjustments. Adjusted Earnings Per Share is calculated by dividing Adjusted Net Income by the weighted average shares outstanding. Management believes this non-GAAP financial measure is useful because it is a key measure used by our management team to evaluate our operating performance, generate future operating plans, and make strategic decisions.

Current wording

Adjusted Net Income/Adjusted Earnings per Share —We define Adjusted Net Income as net income from continuing operations calculated in accordance with U.S. GAAP, adjusted for acquisition related costs, equity compensation, loss on debt extinguishment, cloud computing amortization, and certain non-recurring, non-core, infrequent or unusual charges, amortization related to acquired intangible assets, and the tax effect of the adjustments. Adjusted Earnings per Share is calculated by dividing Adjusted Net Income by the weighted average shares outstanding. Management believes this non-GAAP financial measure is useful because it is a key measure used by our management team to evaluate our operating performance, generate future operating plans, and make strategic decisions.

Previous wording

The following table provides a reconciliation of Net Income (Loss) from continuing operations to Adjusted Net Income and Adjusted Earnings per Share:

Current wording

The following table provides a reconciliation of net income from continuing operations to Adjusted Net Income and Adjusted Earnings per Share:

Previous wording

Adjusted EBITDA —We define Adjusted EBITDA as earnings from continuing operations before interest expense, net, income tax expense, and depreciation and amortization, with further adjustments for acquisition related costs, equity compensation, loss on debt extinguishment, foreign currency transaction related gains or losses, cloud computing amortization, and certain non-recurring and non-core, infrequent or unusual charges. Adjusted EBITDA may not be comparable to similarly titled metrics of other companies due to differences in methods of calculation. Management believes this non-GAAP financial measure is useful because it is a key measure used by our management team to evaluate our operating performance, generate future operating plans, and make strategic decisions.

Current wording

Adjusted EBITDA —We define Adjusted EBITDA as earnings from continuing operations before interest expense, net, income tax expense, and depreciation and amortization, with further adjustments for acquisition related costs, cloud computing amortization, share-based compensation, loss on debt extinguishment, foreign currency transaction related gains or losses, and certain non-recurring and non-core, infrequent or unusual charges. Adjusted EBITDA may not be comparable to similarly titled metrics of other companies due to differences in methods of calculation. Management believes this non-GAAP financial measure is useful because it is a key measure used by our management team to evaluate our operating performance, generate future operating plans, and make strategic decisions.

Previous wording

(e)Represents foreign currency transaction (gains) losses, net that primarily related to the remeasurement of our intercompany loans as well as gains and losses on cross currency swaps.

Current wording

(e)Represents foreign currency transaction (gains) losses, net that primarily related to the remeasurement of the intercompany loans as well as gains and losses on cross-currency swaps.

Previous wording

(f)Consists of the following items (i) (gains) losses, net on sale leasebacks, disposal of assets, or sale of business; (ii) net losses (gains) on sale for assets held for sale; (iii) impairment of certain fixed assets and operating lease right-of-use assets related to closed and underperforming locations, lease exit costs and other costs associated with stores that were closed prior to the respective lease termination dates; and (iv) loss on fair value of the Seller Note.

Current wording

(f)Consists of the following items (i) asset impairments, (ii) (gains) losses, net on sale leasebacks, disposal of assets, including assets held for sale, or sale of business; and (iii) closed store expenses.

Previous wording

(h)Consists of amortization related to acquired intangible assets as reflected within depreciation and amortization in the consolidated statement of operations.

Current wording

(h)Consists of amortization related to acquired intangible assets as reflected within depreciation and amortization in the consolidated statements of operations.

Previous wording

(k)Represents the tax impact of adjustments associated with the reconciling items between net income from continuing operations and Adjusted Net Income, excluding the provision for uncertain tax positions and valuation allowance for certain deferred tax assets. To determine the tax impact of the deductible reconciling items, we utilized statutory income tax rates ranging from 9% to 36% depending upon the tax attributes of each adjustment and the applicable jurisdiction.

Current wording

(i)Represents the tax impact of adjustments associated with the reconciling items between net income from continuing operations and Adjusted Net Income, excluding the provision for uncertain tax positions and valuation allowance for certain deferred tax assets. To determine the tax impact of the deductible reconciling items, we utilized statutory income tax rates ranging from 9% to 36% depending upon the tax attributes of each adjustment and the applicable jurisdiction.

Previous wording

Advertising fund contributions increased by $4 million, or 6%, primarily due to increased franchise system-wide sales. Our franchise agreements typically require the franchisee to pay continuing advertising fund fees based on a percentage of franchisee gross sales or a stated fee.

Current wording

Advertising fund contributions increased by $4 million, or 14%, primarily due to increased franchise system-wide sales of $63 million including system-wide sales from 123 net new franchised stores. Our franchise agreements typically require the franchisee to pay continuing advertising fund fees based on a percentage of gross sales or a stated fee.

Previous wording

Company-operated store expenses increased $16 million, or 9%, corresponding to variable costs associated with increased Take 5 company-operated store sales in the current period as well as store related costs associated with 82 net new company-operated stores.

Current wording

Company-operated store expenses increased $8 million, or 4%, primarily related to store-related costs associated with 79 net new Take 5 company-operated stores as well as variable costs associated with increased Take 5 and Auto Glass Now company-operated store sales during the current period.

Previous wording

Advertising fund expenses increased by $4 million, or 6%, which is commensurate with the increase to advertising fund contributions during the period. Advertising fund expenses generally trend consistent with advertising fund contributions.

Current wording

Advertising fund expenses increased by $4 million, or 14%, which is commensurate with the increase to advertising fund contributions during the period. Advertising fund expenses generally trend consistent with advertising fund contributions.

Previous wording

Supply and other expenses increased $4 million, or 4%, primarily due to costs associated with the increased Take 5 supply revenue, partially offset by the absence of supply and other expenses in 2025 from our Canadian distribution business, which was sold in the third quarter of 2024 and decreased supply revenue within Franchise Brands.

Current wording

Supply and other expenses increased $4 million, or 12%, primarily due to costs associated with the increased Take 5 supply revenue.

Previous wording

Depreciation and amortization expense increased $6 million, or 6%, primarily due to 82 net new company-operated stores in the current year compared to the prior year.

Current wording

Depreciation and amortization expense increased $1 million, or 5%, primarily due to 79 net new Take 5 company-operated stores.

Previous wording

Interest expense, net decreased $28 million, or 23%, primarily related to decreased borrowings on the Term Loan Facility and Revolving Credit Facility in the current period as well as the accelerated amortization of the hedge on the 2022-1 Class A-2 Securitization Senior Notes.

Current wording

Interest expense, net decreased $13 million, or 35%, driven by the full repayment of the Company’s Term Loan Facility in the third quarter of 2025, decreased borrowings on the Revolving Credit Facility, and repayments of securitized senior notes.

Previous wording

The foreign currency transaction gain for the three months ended September 27, 2025 was primarily comprised of $4 million on transaction gains in our foreign operations and a gain on foreign currency hedges of $1 million. The foreign currency transaction loss for the three months ended September 28, 2024 was primarily comprised of a loss on foreign currency hedges of $2 million, partially offset by a gain of $1 million on transaction gains in our foreign operations.

Current wording

The foreign currency transaction loss for the three months ended March 28, 2026 was primarily comprised of transaction losses of $4 million in our foreign operations and a loss on foreign currency hedges of $5 million. The foreign currency transaction gain for the three months ended March 29, 2025 was primarily comprised of transaction gains in our foreign operations of less than $1 million and a gain on foreign currency hedges of less than $1 million.

Previous wording

We assess the performance of our segments based on Adjusted EBITDA, which is defined as earnings from continuing operations before interest expense, net, income tax expense, and depreciation and amortization, with further adjustments for acquisition related costs, store closure costs, equity compensation, loss on debt extinguishment, cloud computing amortization, and certain non-recurring, non-core, foreign currency, infrequent or unusual charges. Shared services costs are not allocated to these segments and are included in Corporate and Other. Adjusted EBITDA may not be comparable to similarly titled metrics of other companies due to differences in methods of calculation.

Current wording

We assess the performance of our segments based on Adjusted EBITDA, which is defined as earnings from continuing operations before interest expense, net, income tax expense, and depreciation and amortization, with further adjustments for acquisition related costs, equity compensation, loss on debt extinguishment, foreign currency transaction related gains or losses, cloud computing amortization, and certain non-recurring and non-core, infrequent or unusual charges. Shared services costs are not allocated to these segments and are included in Corporate and Other. Adjusted EBITDA may not be comparable to similarly titled metrics of other companies due to differences in methods of calculation.

Previous wording

Take 5 net revenue increased $114 million, or 14%, driven primarily by a $81 million increase in company-operated store sales from same store sales growth and 85 net new company-operated stores. Supply and other revenue increased by $24 million, or 27%, primarily due to higher system-wide sales. Franchise royalties and fees increased by $10 million, or 52%, primarily due to a $101 million, or 30%, increase in franchised stores system-wide sales from same store sales growth and 77 net new franchised stores.

Current wording

Take 5 net revenue increased $28 million, or 10%, driven primarily by a $21 million increase in company-operated store sales from same store sales growth and 91 net new company-operated stores. In addition, supply and other revenue increased by $5 million, or 14%, primarily due to higher franchise system-wide sales. Franchise royalties and fees increased by $2 million, or 28%, primarily due to a $33 million, or 24%, increase in franchise system-wide sales from same store sales growth and 77 net new franchised stores.

Previous wording

Take 5 Adjusted EBITDA increased $14 million, or 15%, corresponding with net new store growth and same store sales growth, partially offset by variable costs associated with the increased company-operated store sales and store related costs associated with 85 net new company-operated stores in the current period compared to the prior year period.

Current wording

Take 5 Adjusted EBITDA increased $13 million, or 14%, primarily driven by net revenue due to net store growth and same store sales growth, partially offset by variable costs directly associated with the increased company-operated store sales.

Previous wording

Franchise Brands Adjusted EBITDA decreased $12 million, or 8%, primarily due to decreased net revenue in the period.

Current wording

Franchise Brands Adjusted EBITDA decreased $2 million, or 4%, primarily due to increased general and administrative charges and decreased net revenue.

Previous wording

Car Wash Adjusted EBITDA increased by $11 million, or 19%, driven primarily by same store sales growth, partially offset by variable costs associated with increased sales as well as increased rent and utility costs.

Current wording

Auto Glass Now Adjusted EBITDA increased by $1 million, or 12%, driven primarily by same store sales growth, partially offset by variable costs directly associated with increased sales.

Previous wording

Driven Brands Funding, LLC (the “Issuer”), a wholly-owned subsidiary of the Company, and Driven Brands Canada Funding Corporation (along with the Issuer, the “Co-Issuers”) are subject to certain quantitative covenants related to debt service coverage and leverage ratios in connection with our securitization senior notes. Our Revolving Credit Facility also has certain qualitative covenants. As of September 27, 2025, the Co-Issuers and Driven Holdings were in material compliance with all such covenants under their respective credit agreements.

Current wording

Driven Brands Funding, LLC (the “Issuer”), a wholly-owned subsidiary of the Company, and Driven Brands Canada Funding Corporation (along with the Issuer, the “Co-Issuers”) are subject to certain customary qualitative and quantitative covenants related to debt service coverage in connection with our securitization senior notes. Our Revolving Credit Facility also has certain customary qualitative and quantitative covenants. As of the date hereof, the Co-Issuers and Driven Holdings, LLC are in material compliance with all such covenants under their respective credit agreements.