JYNT - NASDAQ

Good day, and welcome to The Joint Corp. Fourth Quarter 2025 Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, to withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Richard Land, Investor Relations. Please go ahead.

Thank you, Operator, and good afternoon, everyone. This is Richard Land of Alliance Advisors Investor Relations. Joining us on the call today are President and CEO, Sanjiv Razdan, and CFO, Scott Bowman. Please note we are using a slide presentation that can be found at ir.thejoint.com/events. This afternoon, The Joint Corp. issued a press release for the fourth quarter and full year ended 12/31/2025. If you do not already have a copy of this press release, it can be found in the Investor Relations section of the company’s website. As provided on Slide 2, please be advised that today’s discussion, including any financial and related guidance to be provided, consists of forward-looking statements as defined by securities laws. These statements are based on information currently available to us and involve risks and uncertainties that could cause actual future results, performance, and business prospects and opportunities to differ materially from those expressed in or implied by these statements. Some important factors that could cause such differences are discussed in the Risk Factors section of The Joint Corp.’s filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date the statements are made, and the company assumes no obligation to update forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. Management uses non-GAAP financial measures such as EBITDA, adjusted EBITDA, and system-wide sales. A description of these non-GAAP financial measures is included in the press release, and reconciliations of these non-GAAP financial measures to their most directly comparable GAAP measures are included in the appendix, both of which are available in the Investors tab of our website. Turning to Slide 3. With that, it is my pleasure now to turn the call over to Sanjiv Razdan. Sanjiv, please go ahead.

Thank you, Richard, and I welcome everyone to the call. Turning to Slide 4. Today, I will review the fourth quarter results and provide an update on the progress we have achieved over the last year. On our 2024 fourth quarter results conference call a year ago, I introduced the key strategies underlying Joint 2.0, the first phase of our transformation journey to reignite growth and improve profitability. I noted at that time that completing this first phase would take 18 to 24 months, and I am pleased to report that we are on track to complete our work on Joint 2.0 on schedule by the end of this year. Among the key progress points we have achieved to date are: we have significantly strengthened our management team with six of our senior leaders having extensive healthcare industry experience, and a number of us having franchise management experience. We have made significant progress with our refranchising efforts as we now have 48 corporate-owned clinics remaining in our portfolio compared to 135 at the start of this process. We are in active conversations with multiple parties about the refranchising of the remaining corporate clinics. As evidenced by the better-than-expected adjusted EBITDA performance in Q4 and for the full year, we are making progress with improving our operating leverage. As we complete the transition to a pure-play franchisor model, our operating leverage will continue to significantly improve, which Scott will review later on this call. We have also focused on strengthening our marketing activities to drive new patient acquisition and strengthen the returns we generate on our marketing investments. Progress on this initiative includes centering our message on chiropractic care for pain relief, to improve mobility, and get patients back to doing the things they love. And finally, we wanted to optimize our capital allocation, which we are achieving through more diligent, return-focused growth investments and opportunistic share repurchases. While the full financial benefit of these strategies will take time, these initiatives are improving the financial position of our franchisees and the stockholders. And as we complete our transformation journey, The Joint Corp. will be a highly efficient, capital-light pure-play franchisor with more consumer touch points and with strong free cash flow generation. Turning to Slide 5 now. I will summarize our Q4 2025 financial results compared to Q4 2024, and our CFO, Scott Bowman, will provide greater detail in a moment. Revenue from continuing operations increased 3.1% and consolidated adjusted EBITDA increased 7.8%. This improvement reflects the benefit of rightsizing our costs. In the fourth quarter, we repurchased 1,100,000 shares for total consideration of $9,000,000. And for 2025, we repurchased 1,300,000 shares for total consideration of $11,300,000. At 12/31/2025, our unrestricted cash and cash equivalents remain strong at $23,600,000. Turning to Slide 6. I will review the progress we have made with refranchising our remaining company-owned clinics. Towards the end of the 2025 fourth quarter, we signed an asset purchase agreement for the sale of 22 corporate-owned or managed clinics for $1,500,000 to three buying groups. The buyers have assumed business operations via management service agreements pending the completion of the lease reassignments, which we expect to be completed in the second quarter. All three of the buying groups are either current franchisees or have several years of experience operating within our system. In March, we entered into a letter of intent for the sale of five corporate-owned or managed clinics. This leaves us with 48 remaining company-owned clinics, or just 5% of our total clinic portfolio, all but two of which are in California. We continue to be in active dialogue with buyers for the sale of our corporate clinics and remain confident we will complete our refranchising initiative and become a pure-play franchisor this year. Given how close we are to completing this process, later on this call, Scott will provide an overview of what our operating and financial model looks like as a pure-play franchisor. Let us review our marketing efforts turning to Slide 7. As we have noted previously, to drive stronger new patient demand and lead generation, we have shifted marketing content from broad, wellness-focused communications to a message centered on chiropractic care for pain relief, so that patients can improve their mobility and get back to doing the things they love to do. While brand awareness initiatives take longer to produce results, we are inclined to attract patients who remain with us for longer. As noted on our Q3 call, we have shifted a portion of our marketing investment to target an earlier stage in the sales funnel. We are shifting from predominantly local spend to one that also leverages our national scale. The goal is to increase awareness of The Joint Corp. so that when individuals first experience discomfort, they are predisposed to think of us to alleviate their pain. This high-impact national media program started in November. We also previously discussed the updates we are making in our digital marketing efforts. These efforts are focused on improving search visibility, including within AI-driven search environments. These are key drivers of organic traffic and leads to our new microsites, or localized clinic pages. All of our clinic microsites have now been migrated to the new template and have returned to growth, with overall traffic and organic traffic continuing to trend up. Importantly, high-intent actions have strengthened, with phone calls and overall submissions both also continuing to increase. At the same time, we launched a redesigned national blog in January with fresh content and digital linkage. Overall traffic and organic traffic are reflecting early benefit from our ongoing SEO work and awareness investment. In addition, updates to national website pages enhance visibility among early awareness audiences searching for topics such as back pain, neck pain, and mobility or lifestyle improvement. As a result of shifting to more national advertising and our improving SEO, we have seen improvement in our new patient acquisition trends each month since program launch, indicating that these efforts are driving consideration and new patients, albeit at a rate that remains lower than last year. Turning to Slide 8. We are making progress with sales-driving initiatives to reignite system-wide sales growth and drive long-term profitability. To recap, we are working to improve comp sales by growing our active member base. This will be accomplished by stronger lead generation, better conversion within our clinics to drive new patients, improved retention of our existing patients, and optimized pricing. For Q4, similar to the last several quarters, we improved our patient attrition rate through the introduction of an offering for low-frequency patients. We are now maintaining patient attrition at a level that provides a solid foundation from which we can drive growth as comp sales begin to improve. That said, Q4 sales comps were lower than expected, largely due to lower new patient count. One of our initiatives targets taking pricing in the near term. To give some perspective on this, we last took meaningful enterprise-wide pricing in 2022. Since November, we have been piloting three different levels of price increases across three diverse demographic areas. We continue to test and optimize pricing in approximately 300 clinics before we roll out adjustments across our system. We expect comp sales trends will improve during the course of the year as our new national brand awareness campaign continues to roll out, as we benefit from improvements to SEO, and implement the optimized pricing structure nationally. Turning to Slide 9. We are focused on elevating our patients’ experience through improved technology. We are continuing to introduce feature updates for our patient-facing mobile app. In addition, more than 23,000 patients have shared app feedback through our survey, giving us an average rating of 4.91 out of 5. Seventy-five percent of patients reported waiting less than five minutes while 17% waited less than ten. Lastly, our intent to recommend is 9.7 on a 10 scale, indicating that patients are having consistently positive experiences. With that, I will turn the call to Scott.

Thanks, Sanjiv. Turning to Slide 11. Let us discuss our operating metrics. In the fourth quarter, system-wide sales were down 3.9% to $140,000,000. Comp sales were down 3.8%, and adjusted EBITDA for consolidated operations grew 7.8% to $3,600,000. For the full year, system-wide sales of $532,000,000 were flat compared to the prior year. Comp sales declined 0.4%, and adjusted EBITDA from consolidated operations rose 13.9% to $13,000,000. Turning to Slide 12. Let us discuss our clinic count and new clinic performance. Our total clinic count of 960 at year-end compares to 967 clinics in the prior year. During 2025, we opened 29 clinics, refranchised 41, and closed 36 clinics for a total clinic count of 885 franchise clinics and 75 company-owned clinics. This includes the 27 clinics that are currently under an asset purchase agreement or letter of intent for their sale. Our efforts to improve new clinic performance through improved preopening protocol have resulted in clinics reaching their breakeven point in half the time compared to prior years. Turning to Slide 13. Let us discuss our financials. I will review continuing operations for the fourth quarter unless otherwise specified. Revenue grew 3% to $15,200,000, mainly due to additional marketing funding for national advertising. Cost of revenues was $2,800,000, down 11%, reflecting lower regional developer loyalty. Selling and marketing expenses were $3,500,000, up 25% due to enhanced national marketing and one-off costs associated with transitioning to a new marketing agency. G&A expenses increased 2% to $7,700,000, mainly due to increased payroll costs and other costs that will decline as we complete refranchising. Consolidated net income was $1,000,000 for the quarter, adjusted EBITDA from consolidated operations improved 8% to $3,600,000, and adjusted EBITDA for continuing operations was $1,600,000 compared to $2,000,000 in the same period last year. Turning to Slide 14. Let us discuss our full year financials compared to the prior year. Revenue was $54,900,000 compared to $52,200,000 in 2024. Consolidated net income increased $8,700,000 to $2,900,000, which compares to a $5,800,000 loss in 2024. Net loss from continuing operations was $268,000 compared to a loss in 2024. Adjusted EBITDA from consolidated operations increased 14% to $13,000,000 while adjusted EBITDA from continuing operations improved to $3,100,000 compared to $2,300,000 in 2024. On to Slide 15, I will review our liquidity and stock repurchase plan. At the end of the fourth quarter, unrestricted cash was $23,600,000 compared to $25,100,000 in the prior year. We maintain our line of credit with JPMorgan Chase for $20,000,000 and had zero funds drawn during the quarter. During the fourth quarter, we repurchased 1,100,000 shares for $9,000,000, averaging $8.45 per share. For the full year, we repurchased 1,300,000 shares for total consideration of $11,300,000, averaging $8.73 per share. At the end of 2025, we had $5,700,000 remaining on our share repurchase plan that was authorized in November 2025. On to Slide 16, we are initiating our full year 2026 guidance as follows: We expect system-wide sales to range from $540,000,000 to $552,000,000. We expect comp sales to be in the range of negative 3% to positive 3%. We expect consolidated adjusted EBITDA to be in the range of $12,500,000 to $13,500,000. And on a net basis, we expect our clinic count at the end of 2026 will be lower than at the end of 2025, as new clinics opened this year will be offset by closures as we reshape our portfolio with a focus on stronger operators and healthier sites. We continue to believe that over time, there is potential for more than 1,800 clinics in the U.S. alone. This short-term optimization of our portfolio leaves us with a stronger foundation to grow from. Due to our refranchising efforts and realignment of corporate costs, we expect 2026 continuing operations to be more profitable than 2025. Given the progress of our refranchising efforts, the next few slides will provide you certain key attributes of our go-forward model as a pure-play franchisor starting in mid-2026. Slide 17 shows that our revenue target as a pure-play franchisor will be approximately 11% of system-wide sales, which compares to 10.3% in 2025. On Slide 18, we are showing our expected run-rate financials once we complete refranchising mid-2026. In this case, gross margin would be between 83% and 85% of revenues, which compares to 90% in 2025. G&A expense would be between 40% and 42% of revenues, which compares to 64% in 2025. CapEx would be approximately 3% of revenues, and free cash flow conversion would be between 60% and 70%. For this purpose, we define free cash flow conversion as free cash flow divided by adjusted EBITDA. These assumptions result in an estimated adjusted EBITDA margin of 19% to 21% compared to 12% in 2025, and net income margin of 13% to 15% compared to 3% in 2025. For CapEx, our internal IRR target for growth projects is 25%. Keep in mind that these estimates are what we believe to be the starting point once refranchising is complete, and we intend to build on these returns over time. To further illustrate how our model works as we generate revenue growth, I will review some assumptions for our run-rate financials in the future based on a couple of growth examples. If we were to generate 5% revenue growth, this would result in an estimated adjusted EBITDA margin of 20% to 22% and an estimated net income margin of 14% to 16%. And if we were to generate 10% revenue growth, this would result in an estimated adjusted EBITDA margin of 22% to 24% and an estimated net income margin of 16% to 18%. Finally, on Slide 19, I will highlight that with the expected strong free cash flow we will generate, we will remain committed to disciplined capital allocation with current priorities being investments in growth initiatives, share repurchases, and the repurchase of RD territories where feasible. And with that, I will turn the call back over to Sanjiv.

Thanks, Scott. Turning to Slide 21. While the full financial benefit of our strategies will take time to come to fruition, we are making consistent progress with improving the financial position of our franchisees and stockholders. Phase one of our transformation journey has us on track to become a pure-play franchisor, with the cost savings initiatives which are beginning to drive improved operating leverage. And our allocation of capital towards stock repurchases highlights our strong conviction that we will achieve our long-term goals of growing system-wide sales, comp sales, net new clinic openings, and adjusted EBITDA. I noted at the top of the call that we are on track to complete the first phase of our transformation journey, The Joint 2.0, by the end of this year. As we move closer to this goal, we are beginning to focus more time and attention on Joint 3.0, the next phase of this journey, which will begin in earnest in 2027. That phase will prioritize growth through expansion of our operations into new channels, B2B, and entering new markets in the U.S. where we are underpenetrated as well as into our first international markets. We are seeing secular trends around longevity, health span, mindfulness, sleep quality, and noninvasive whole body care. Hence, we see significant opportunity to further define and activate our brand promise around the notion of moving better and feeling better. This means deepening our focus on clear, differentiated proof points like creating options for signature integrated treatments, nutrition, orthotics, and finding ways to integrate data from wearable technology to shape treatment plans, while we also establish new ways to measure quantifiable, positive patient outcomes. With that, Operator, we will now open for questions.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. The first question today comes from Jeffrey Van Sinderen with B. Riley Securities. Please go ahead.

Hi, everyone. Wondering if you can share the attrition and new patient ad metrics maybe sequentially and year over year. Any color or any metrics you can share there would be helpful.

Yes, I can start off on that one. We typically do not give the specific metrics, but what I can tell you is what we are focused on is active member growth. And so when you think of active member growth, you have to draw in new patients. You have to convert those new patients to a plan. Then you have to retain them. And so of those three different components of active member growth, new patient flow has been the weakest for us. And so the new marketing that we have out there to create brand awareness as well as improve our SEO is helping. As you can imagine, it does take time to build. But the early signs that we are seeing are positive. When we look at conversion and when we look at attrition, those numbers were actually slightly better than last year. Not to say that there is not room for improvement, but new patients is our largest focus right now.

And then maybe you can touch on how—I know you gave some color in your prepared comments—but any more you can add on how you are evolving marketing initiatives for 2026?

Yes, I am happy to take that one, Jeff. I think the focus continues to remain where we have been. So let us break that down. Number one, we believe that we continue to shift investment from local to national in order to amplify brand awareness, and we are seeing positive outcomes as a result of that. So we will continue to double down on that together with our franchisees. We will continue to evolve creative messaging to make sure that message cuts through, is on point, and is in keeping with the consumer needs. The second thing that has worked well for us that we continue to work on is addressing the shift in search behaviors as a result of AI. We made a massive amount of progress in that in Q4, and made significant investment to do that. And we will continue to work because that is a moving target. So we will continue to focus on making sure that we are relevant when it comes to shifting search behaviors. The third thing that we are working on is then around the whole conversion piece of it. We brought on a new operations leader, Ron Stilwell, who joined us in January. And he is already working with our franchisees on very specific in-clinic training on making sure our wellness coordinators are focused on converting leads. They have the right scripts. They have the right things to say to our patients in terms of what is their benefit, and converting them to a plan. So that is a huge area of focus for us, the whole conversion activity. And last but certainly not the least, we are finding ways of addressing the reasons for attrition. Where we have patients that may be looking for reduced frequency treatment because they are already feeling they are no longer in pain as when they came to us or may feel like they do not have the time, we introduced a package for them called AlignOne, which gets them a minimum of one adjustment per month at the cost of $35 and allows them to add on incremental visits on a flexible and discounted basis. We have also just gone into test with something that we are calling AlignTwo, which is two visits per month. So I think we are recognizing that there may be patients who are not able to afford the time or the cost or need the four visits to one plan, and testing various options. In fact, the AlignOne is already live. So we are attacking the full fulcrum: bringing on new leads, making sure we are visible, right message, converting strongly, and coming up with plans that help our wellness coordinators to prevent attrition when patients feel a whole lot better and are no longer in pain. So, hopefully, that gives you a sense, Jeff, for what we are doing on the marketing front.

Yes, that is really helpful. And then just one last one, if I could squeeze it in. How does the three-tiered pricing pilot go? And then how do you evolve that going forward?

Yes. So we have some pricing out there, as you know, at a $2, $5, and $10 increase. A $2 increase did not really show us much. I do not think it was really big enough to cause a big difference. So we are focused more on the $5 and the $10. And I would say overall, the $10 increases are showing a little bit more benefit, so we are going to continue to test. We just launched some new markets a few weeks ago to get a read on some additional markets, to give this a little bit broader perspective. But overall, we feel pretty good about it. But at the same time, we want to give it a little bit more time before we roll it out further. But we think that will be a component of our growth going forward for sure.

Just in addition to what Scott has shared, I think I would like to add to that perspective. Our patients—70% of our patients—really are in the average household income of somewhere in the range of $60,000 to $110,000 a year. That patient base or that consumer base has felt the impact of the macroeconomic climate probably more significantly than some others. So as we are testing and optimizing for this price increase, we are being very mindful of timing and regional impacts, and that is why we are being very purposeful and thoughtful about this test and reading these results very carefully before we extend it beyond the 300 clinics that it is already in.

Okay. Thanks for taking my questions.

Sure.

The next question comes from Nicholas Sherwood with Maxim Group. Please go ahead.

Thank you for taking my questions. So what specific leading indicators give you confidence that comps will improve in 2026? And when do you think we can expect an inflection point? And then two follow-ups. Can you elaborate on some of those positive early signs that you are seeing? Then looking at comps, you know, it was down this past year. Is that more due to higher rates of attrition from repeat customers or an inability to bring in new customers to replace people that are leaving? And then my last question is, this new AI SEO marketing investment, is this something that costs significantly more than your old marketing, or is this more so just reallocating resources and not actually going to be increasing your marketing spend substantially? Or is there some sort of upfront or higher investment required with this?

Yes. It is a good question. So two things that I think about on that question. Number one, just the initiatives that we are working on right now do take some time. But we are encouraged by some of the early signs that we are seeing that could help us in the coming months. So I think that is number one. And then number two is just the comps that we saw this past year and just the distribution of those comps. We were positive about 2% in the first half of the year last year and negative 3% for the back half of the year. And so we have some easier compares in the back half. So that plus more traction on our initiatives leads us to believe that second half should be quite a bit better. I will answer the last question first. The key issue for us is just fewer new customers coming in. And so that is why our marketing efforts are so important right now—creating brand awareness, improving our SEO, being more visible on AI searches. And so that is the key focus right now. We are still working on conversion and attrition because even though they were slightly better than last year, there is still opportunity there. And so broadly from a marketing standpoint—Sanjiv can tag on as well—what we are seeing is we have been at work for a while now on improving SEO, and that takes some time to actually get traction. And so we expected that, but we are starting to see some good signs in terms of our measurement of SEO effectiveness. It was quite a bit under the average, and now it is at or even slightly above average. And so good progression there. And then as we look at our website activity and our leads coming in, we have seen steady improvement in the leads being generated from that new marketing and from the SEO improvement. Now that has also led to some degree of improved sequential run rate in new patients—still negative, but less negative. But it has been a steady trend over the last few weeks. So we are still relatively cautious there, but those things are lining up for us, saying that it is working to some extent, although it will take time to really show through on inflection in comps. As for the AI SEO marketing investment, it is an incremental spend. And so we are doing that while we are also spending money on brand awareness and more top of funnel. And so we have shifted some of the local marketing being spent by the franchisees to national marketing. And so that has given us more funding to fund more brand awareness campaigns and SEO. And so on balance, we are not spending really any more net dollars because we are getting more NMF funds from the franchisees to spend on these additional initiatives.

Yes, sure, Nick. Just to recap so everybody on the call understands what we are doing because obviously this is an important topic for us. We are going after it in three different ways: generating more leads, converting those leads to active members, and then preventing attrition by improving retention. What are we doing to improve lead generation? Number one, we pivoted our messaging from general wellness to pain. We refreshed all our creative. Eighty-two percent of our patients cite discomfort or pain as a reason for why they come to us, so it becomes a much more compelling reason to use The Joint Corp. Now that we have that message pivoted to pain, we did two things. We shifted some local market dollars to national. The bulk of those dollars were invested behind high-impact media purchases on the demographic that we believe gives us the highest yield and comes to us most often. The benefit of that, what we are seeing, is sequential improvement in lead generation and new patients. SEO to offset search behaviors due to AI was the other investment that that shift went into. And the combined impact of pain-related message, high-impact media, with search optimized for AI is what is giving us that. And the early indicators on the search, as Scott indicated, were that we are actually now able to measure our effectiveness on search against benchmarks, and we are finding that we are slightly ahead of the benchmark after the catch-up that we have had to do. So that is number one. Number two is once the patient is in, how are we getting after converting them to active members, which we are tackling more through operations and training, which we have initiated and expect to see even more traction as time goes by. Our conversion year on year has remained more or less flat. Our attrition—our retention—has actually improved. Retention of patients is improving because we are finding ways to keep those patients longer and are putting in place offers that allow patients whose needs shift and are no longer in pain, require lower frequency, lower cost solutions to stay with us. We have put that in place and are doing more around that. So that is what is giving us confidence that we will see an improvement in our comps and are already seeing sequential underlying metrics improve.

Okay. Our next question comes from George Arthur Kelly with ROTH Capital Partners. Please go ahead.

Hey, everyone. Thanks for taking my questions. First couple for you on your comp guide. I was curious if you could at least directionally help us with what you have seen in January and February—just curious if there has been an improvement there from what you reported in Q4. And then secondly, I am wondering if you included a pricing increase in your guide. And then a question on your capital allocation priorities. The slide—I think it is 19—you list the three different key priorities. On investing in growth initiatives, I am just a little unsure on what that might include. So could you highlight some of the different investments you are contemplating and size of those? And then secondly, on the buyback of RD territories, I was curious if you could give us an update just on the status of those ongoing negotiations. Do you feel like you are getting closer on any RD buybacks? And then one last one for me. The previous slide—I guess it is 18—where you go through the post-refranchising run-rate profitability and everything. Is the margin target there, the 19% to 21% EBITDA margin target, incorporated with your gross margin target and your G&A target? Is there a marketing investment beyond the funds that is incorporated in that 19% to 21% guide, or is there something else that maybe I am missing? Just trying to kind of bridge the different OpEx lines to get there. I guess I am just wondering if you plan to spend more marketing dollars than you are bringing in.

Yes. This is Scott. So what we have seen so far is similar trends to what we saw in Q4. And so, like I said, we are seeing some early signs on the leads and new patients, but still the comps are about where they were. We are rolling over some higher comps from last year, so I think that is part of it. So that is why I said I think the second half of the year we should see more of an inflection in comps, and between now and then, we should see some incremental improvement as well because the traction we see right now will accelerate and we have easier comps in the back half. And no, our guide does not include any pricing increase right now because we were just in test. We did not know for sure what the result of that would be, and so we were a little cautious and did not include that in the guide. On investing in growth initiatives, we want to be prudent in that category but still invest in the business. I mentioned a target of about 3% of revenues for that category, with a target IRR of about 25%. And that is an average. When we look at initiatives like that, we have things in the technology area where we can rework our whole MarTech stack to be more efficient as we capture leads and as we use those leads to fuel the marketing engine that we have. Lots of opportunities there, and we are doing some good work there to improve that platform and to bring it in-house. That is one good example. Another example is where we are making a lot of improvements for the front-facing user interface for each of our wellness coordinators in our clinics. As you can imagine, with each individual customer and all the plans and packages that we have, there are a lot of different options. We are doing some really good work there to consolidate that user interface so it is much easier for the wellness coordinator to communicate the different plans available and to transact with that patient seamlessly. That will be a big win from an operations standpoint in clinic. Those are just two examples, but the major theme here is how can we invest in technology or other areas to grow the business and have a positive ROI for those projects. On the RD territories, we are in active negotiations on some of those RD territories. Some of them are getting fairly close, but we will continue those conversations, making sure that we understand the value in those buybacks and understanding what improvements we can make. Those will be ongoing, and as we make further progress, we will report back on what that is going to look like going forward. On your margin bridge question, that is a good question. Marketing expense is not in G&A. It is a separate line item. We will spend more dollars, but the extra dollars that we are spending are being funded by the franchisees as they shift some of the local dollars into our national campaign.

This concludes our question and answer session. I would like to turn the conference back over to Sanjiv Razdan for any closing remarks.

Thank you for joining us. Have a good day, and know that at The Joint Corp., we always have your back.