Driven Brands executives outlined the accounting failures that led to the restatement of multiple years of financial results during a recent earnings call.
During a May 19 earnings call, president and CEO Daniel Rivera attributed the issues to rapid expansion and ERP integration problems that outpaced back-office controls.
“During our 2025 year-end closing process, we identified 3 issues requiring further review related to lease accounting, Auto Glass Now cash accounting and expense mischaracterization with Driven Advantage, each related to prior periods,” Rivera said.
Rivera said the review later uncovered “material errors requiring the restatement of prior financial statements.”
Driven Brands disclosed that the accounting review resulted in revenue reductions of US$12 million in 2023, US$4 million in 2024 and US$5 million in 2025. Driven Brands also disclosed reductions in adjusted EBITDA of US$57 million in 2023, US$12 million in 2024 and US$8 million through September 2025.
“The majority of the issues trace back to 2023, 2022 and prior, a period of significant acquisition and integration activity for the company,” Rivera said.
Rivera attributed the accounting failures to two primary causes.
“First, the pace and complexity of growth outstripped the scale and maturity of certain back-office people, processes and controls,” he said.
Rivera also said the company’s transition to Oracle contributed to the issues.
“Second, as the business grew in scale and complexity, we recognized the need for a more integrated and scalable ERP environment, which led to the decision in 2023 to consolidate multiple ERPs to Oracle with the system going live in mid-2024,” Rivera said.
Chief financial officer Michael Diamond said lease accounting errors stemmed from incorrect information inside the company’s lease systems.
“Lease-related right-of-use assets and right-of-use liabilities were understated dating back to at least 2023, primarily driven by incorrect lease details in our lease database,” Diamond said during the investor call.
Diamond also linked accounting problems to the launch of the company’s Driven Advantage digital marketplace.
“When we launched our new digital platform for Driven Advantage, our internal marketplace in 2023, technology integrations between the new ordering platform and our prior ERP were not correctly established,” Diamond said.
Diamond said Driven Brands later identified “incorrect manual journal entries” made in 2023 during the restatement review.
Driven Brands also disclosed that cash and cash equivalents had been overstated dating back to 2022, primarily within Auto Glass Now operations following multiple acquisitions.
“A majority of this overstatement occurred at AGN in 2022 and 2023 and was the result of 12 acquisitions with different ERP systems during a time when our back-office processes did not keep pace with our rapid expansion,” Diamond said.
Rivera said Driven Brands had since strengthened the finance organization and internal controls.
“We identified the issues, restated the financial statements and are strengthening our controls,” Rivera said during the call.
Driven Brands expects approximately US$35 million to US$45 million in non-recurring restatement-related costs during 2026.
