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Dutch Bros Inc. (BROS)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 delivered broad-based strength: revenue up 28% to $415.8M, system same shop sales +6.1% (transactions +3.7%), and Adjusted EBITDA +36.6% to $89.0M, with company-operated gross margin up 60 bps to 24.3% .
  • Clear beats vs consensus: revenue $415.8M vs $403.7M* (+3%); EPS $0.26* vs $0.18*; EBITDA (GAAP) $80.6M vs $74.8M*; driven by transaction growth, paid media, and innovation; dairy deflation offset some coffee pressure .
  • Guidance raised: FY25 revenue to $1.59–$1.60B, same shop sales to ~4.5%, and Adjusted EBITDA to $285–$290M; unit openings (≥160) and capex ($240–$260M) unchanged .
  • Key catalysts: sustained transaction growth (order ahead ~11.5% mix, loyalty ~72%), elevated new shop productivity (31 openings; total shops 1,043), and 2026 food rollout building awareness and frequency; management flagged higher coffee/tariff headwinds in 2H but reiterated confidence .

Values with * are retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Strong comps powered by transactions: system SSS +6.1% (transactions +3.7%) and company-operated SSS +7.8% (transactions +5.9%); management credited paid advertising, innovation, and loyalty segmentation .
    Quote: “Our transaction driving initiatives are working in unison… marking yet another consecutive quarter of transaction growth.” — CEO .
  • Margin and profit execution: company-operated gross margin 24.3% (+60 bps YoY), Adjusted EBITDA up 36.6% to $89.0M; Adjusted SG&A leveraged to 14.1% of revenue (vs 14.6% LY) .
    CFO: “In the quarter, adjusted EBITDA was $89,000,000… an increase of 37%… over last year.” .
  • Strategic progress: 31 openings (30 company-operated) with elevated new shop productivity; order ahead reached ~11.5% of transactions (double in some new markets), while Dutch Rewards penetration hit ~72% .
    Quote: “New shop productivity remained at elevated levels in Q2.” — CEO .

What Went Wrong

  • Cost headwinds ahead: coffee cost/tariff pressure to accelerate in 2H; company expects beverage/food/packaging ~26% of company-operated revenue in back half (vs 25.3% in Q2) .
    CFO: “Coffee accounts for 10% of our total COGS… ~50%… sourced from Brazil.” .
  • Occupancy deleverage from new shops: occupancy & other costs were 15.8% of company-operated revenue (+80 bps YoY), with pre-opening expense expected to rise in 2H on accelerated openings .
  • FY consensus revenue sits slightly above raised guide: Street FY25 revenue mean $1.618B* vs company’s $1.59–$1.60B, implying potential future estimate recalibration despite EBITDA guidance aligning with Street* .

Values with * are retrieved from S&P Global.

Financial Results

Consolidated KPIs and Profitability (chronological: Q4 2024 → Q1 2025 → Q2 2025)

MetricQ4 2024Q1 2025Q2 2025
Total Revenue ($M)$342.8 $355.2 $415.8
Net Income Diluted EPS ($)$0.03 $0.13 $0.20
Adjusted EBITDA ($M)$48.8 $62.9 $89.0
Company-Operated Gross Margin (%)21.4% 21.9% 24.3%
Company-Operated Contribution Margin (%)28.9% 29.4% 31.1%

Q2 2025 vs Consensus (S&P Global)

MetricConsensusReportedΔ vs Cons.
Revenue ($M)403.7*415.8 +12.1
Primary EPS ($)0.177*0.26*+0.083
EBITDA (GAAP) ($M)74.8*80.6 +5.8

Values with * are retrieved from S&P Global.

Segment Revenue (Q2)

SegmentQ2 2024 ($M)Q2 2025 ($M)
Company-Operated Shops$295.3 $380.5
Franchising & Other$29.7 $35.3
Total Revenue$324.9 $415.8

Operating Metrics & Growth Drivers

KPIQ4 2024Q1 2025Q2 2025
System SSS (%)6.9 4.7 6.1
System Transactions (%)2.3 1.3 3.7
Company-Operated SSS (%)9.5 6.9 7.8
Dutch Rewards Penetration (%)70.6 71.8 71.6
Order Ahead Mix (% of txns)~8 ~11 ~11.5
Shops Opened (net)32 30 31
Total Shop Count (EoP)982 1,012 1,043
Systemwide Sales ($M, Qtr)$476.3 $489.7 $571.3

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenuesFY 2025$1.555–$1.575B $1.59–$1.60B Raised
Same Shop Sales GrowthFY 20252%–4% ~4.5% Raised
Adjusted EBITDAFY 2025$265–$275M $285–$290M Raised
Total System Shop OpeningsFY 2025≥160 ≥160 Maintained
Capital ExpendituresFY 2025$240–$260M $240–$260M Maintained

Management Q3 color: expects 3.5%–4% system SSS in Q3 with ~60 bps net price roll-off and more normalized marketing .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24, Q1’25)Current Period (Q2’25)Trend
Order Ahead / Mobile8% mix, morning focus; adoption >2x in some new markets ~11.5% mix; some new markets ~2x system; walk-up window ~15% mix; frequency lift Accelerating
Paid Advertising / AwarenessElevated spend improved awareness and traffic, esp. newer markets Awareness gains continue; maintaining elevated stance; measured cadence to avoid predictability Sustained
Loyalty SegmentationRecord 71%+ penetration; early segmentation efforts ~72% penetration; deeper cohort segmentation; early innings Improving
Food PilotEarly tests (8→32 shops), focus on throughput and Broista satisfaction Expanded pilot to 64 shops; ticket & transaction lift in morning daypart; 2026 broader rollout target Scaling
Costs: Coffee/Tariffs2025 headwind ~110 bps (company shop margin) anticipated Dairy savings offset Q2; coffee/tariffs to increase 2H; coffee ~10% of COGS; ~50% from Brazil Watchlist
Capex / Build-to-SuitQ4 per-unit ~$1.8M; shift to build-to-suit leases Q2 per-unit ~$1.4M (≈15% QoQ decline) Improving efficiency
CPG (2026)Announced long-term strategy 2026 phased rollout in markets with shops; retailers excited Pipeline forming

Management Commentary

  • Strategic focus on people and culture: “Our operator pipeline includes over 450 candidates with an impressive average tenure of over seven years… ready to carry forward and scale the Dutch Bros culture.” — CEO .
  • Growth thesis: “We are well positioned to achieve our goal of 2,029 shops in 2029… the runway ahead is expansive.” — CEO .
  • Transaction engines: “A three-part plan… category-wide innovation, increased paid advertising… and the Dutch rewards program for one-to-one customer connection.” — CEO .
  • Execution and profitability: “Company-operated shop contribution was $118,000,000… margin was 31.1%… dairy savings more than offset increases in coffee costs.” — CFO .

Q&A Highlights

  • CPG rollout (2026): Will prioritize markets with shops, phased according to retailer resets; designed to boost brand awareness .
  • Throughput: Focus on labor deployment vs demand peaks, speed dashboards to drive shop-level action; targeting incremental throughput during peaks .
  • Mobile order: Comfortable with ~11.5% mix; some new markets double; growth paced to protect brand/operations; walk-up ~15% mix; mobile drives frequency and morning daypart .
  • Food pilot: Expanded to 64 shops; early ticket and transaction lift with 8-item assortment; emphasizing training, equipment installs, and supply chain readiness; broader system rollout through 2026 .
  • Cost outlook: Coffee/tariffs up in 2H; coffee ~10% of COGS (≈50% Brazil); dairy provides partial offset; company substantially price-locked for 2025 .
  • Openings cadence/capex: Expect ~40 Q3 and ~60 Q4 openings; average capex per shop down ~15% QoQ to ~$1.4M on shift to build-to-suit .

Estimates Context

  • Q2 beats: Revenue $415.8M vs $403.7M*; EPS $0.26* vs $0.18*; EBITDA (GAAP) $80.6M vs $74.8M* — reflecting outsized transaction growth and strong flow-through .
  • FY25 Street vs guidance: Consensus revenue $1.618B* vs guide $1.59–$1.60B; consensus EBITDA $288.9M* vs guide $285–$290M — Street sits slightly above revenue guide while EBITDA aligns at midpoint; modest estimate fine-tuning likely if management’s conservative pacing persists .

Values with * are retrieved from S&P Global.

Key Takeaways for Investors

  • Momentum is transaction-led and durable: multi-pronged drivers (innovation, paid media, loyalty) plus order ahead penetration support continued traffic growth into 2H .
  • Profitability backdrop improving: shop gross and contribution margins expanded; dairy tailwind offsetting near-term coffee; watch 2H coffee/tariff step-up .
  • Guidance raised across revenue/SSS/EBITDA while unit/Capex unchanged — supports near-term confidence without overreaching .
  • Execution capacity rising: accelerated back-half openings with falling per-unit capex and robust operator bench de-risk the 2025 plan .
  • Medium-term catalysts: 2026 food rollout and CPG launch to amplify morning daypart capture and brand awareness; disciplined pace balances operational quality and growth .
  • Trading lens: Q2’s beat-and-raise plus transaction momentum are positive catalysts; monitor 2H commodity/tariff impact and any divergence between Street revenue expectations and company’s raised (but still conservative) guide .

Values with * are retrieved from S&P Global.

Sources

  • Q2 2025 press release and 8-K: results, metrics, and raised guidance .
  • Q2 2025 earnings call transcript: detailed drivers, 2H cost outlook, order ahead, food test, and Q3 SSS color .
  • Prior quarters for trend analysis: Q1 2025 PR/8-K and call ; Q4 2024 PR and call .
  • Consensus estimates (S&P Global): Q2 2025 revenue, EPS, EBITDA and FY25 revenue, EBITDA means (see tables). Values with * are retrieved from S&P Global.