The Joint Corp. JYNT is set to report its fourth-quarter 2023 results on Mar 7, after the closing bell. It is expected to have witnessed increased clinic count and patient visits in the December quarter.

Earnings Surprise History

The Joint’s earnings beat the consensus estimate once in the prior four quarters and missed thrice, with the average surprise being 112.2%. This is depicted in the graph below:

The Joint Corp. Price and EPS Surprise

The Joint Corp. price-eps-surprise | The Joint Corp. Quote

In the last reported quarter, the franchisor of chiropractic clinics reported adjusted operating loss per share of 5 cents against the Zacks Consensus Estimate of an earnings of 4 cents due to higher expenses, partially offset by continued organic growth and an increased number of clinics.

Now, let’s see how things have shaped up prior to the fourth-quarter earnings announcement.

Factors to Note

Earlier, JYNT stated that it expects adjusted EBITDA for 2023 to be in the range of $11-12.5 million. It reported adjusted EBITDA of $11.5 million a year ago. It also announced that the company has treated 932,000 new patients in 2023, up 10.3% from the 2022 level. It witnessed 13.6 million patient visits in 2023, 11.5% higher than the year-ago figure.

The Zacks Consensus Estimate for the fourth quarter end total clinic count is pegged at 948, up from 838 in the year-ago period. The consensus mark for franchised clinics is pegged at 812, indicating an increase from 712 a year ago. Similarly, the consensus estimate for company-owned or managed clinics is pegged at 136, up from 126 in the previous-year quarter.

The increase in clinics is expected to have boosted The Joint’s patient visits and top line in the fourth quarter. The Zacks Consensus Estimate for revenues is pegged at $29.6 million, indicating an increase of 6.5% year over year. Higher royalty fees, franchise fees and revenues from company-owned or managed clinics are expected to be major growth drivers.

However, higher franchise and regional development cost of revenues, as well as IT cost of revenues are expected to have pushed the total cost of revenues up in the fourth quarter. Investments in supporting clinic growth and higher payroll costs in a tight labor market are expected to have led to higher general and administrative expenses in the fourth quarter.

Furthermore, increased selling and marketing expenses, as well as general and administrative expenses are likely to have contributed to higher overall expenses, affecting profit margins, making an earnings beat uncertain.