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Dutch Bros Inc. (BROS)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 was strong: revenue rose 25% year-over-year to $423.6M, system same shop sales grew 5.7% on 4.7% transaction growth, and company-operated same shop sales grew 7.4% on 6.8% transaction growth .
  • Guidance was raised: FY25 total revenue to $1.61–$1.615B and system same shop sales growth to ~5%; adjusted EBITDA, capex, and 160 system openings were maintained; 2026 openings targeted at ~175 .
  • Margins faced headwinds: company-operated gross margin fell 120 bps YoY to 21.0% and contribution margin fell 170 bps to 27.8%, reflecting higher coffee costs, occupancy, and pre-opening expenses as new market expansion accelerates .
  • Digital and food initiatives are scaling: Order Ahead reached 13% mix (double that in some new markets) and hot food in ~160 shops delivered an ~4% comp lift with ~25% from transactions; loyalty mix rose ~500 bps YoY to ~72% .
  • Stock reaction catalysts: raised revenue/comp guidance, five consecutive quarters of transaction growth, strong pipeline (~30 sites added per month) toward 2,029 shops by 2029, tempered by coffee inflation and CA payroll tax headwinds in Q4 .

What Went Well and What Went Wrong

What Went Well

  • Five consecutive quarters of transaction growth and record AUVs, supported by digital (Order Ahead, segmentation in rewards) and strong LTOs; “Q3 marked our fifth consecutive quarter of transaction growth” .
  • Food program rollout showed promising lift (~4% comp), with positive broista and customer feedback, and operational design (oven cycle time below drink make time) to protect throughput .
  • Development pipeline strength and execution: 38 openings in Q3 (34 company-operated), presence expanded to 24 states, pipeline adding 30+ potential sites per month; target ~175 openings in 2026 .

What Went Wrong

  • Margin compression: company-operated gross margin down 120 bps YoY to 21.0% and contribution margin down 170 bps to 27.8% due to coffee inflation, occupancy from build-to-suit leases, and pre-opening costs in new markets .
  • Mix pressure offsetting price: ~2 pts of price largely offset by ~1 pt negative mix (lower items per transaction), linked to more individual Order Ahead occasions .
  • Near-term labor and commodity headwinds: Q4 labor line to be impacted ~50 bps by CA payroll taxes; coffee costs expected to remain elevated into 2026 .

Financial Results

Headline Metrics vs Prior Quarter, Prior Year, and Consensus

MetricQ3 2024Q2 2025Q3 2025Q3 2025 ConsensusBeat/Miss
Revenue ($USD Millions)$338.2 $415.8 $423.6 $413.6*Beat (by ~$10.0M)*
EPS - Diluted GAAP ($)$0.11 $0.20 $0.14 $0.1705*Miss (vs Primary EPS)*
Adjusted EPS (Fully Exchanged) ($)$0.16 $0.26 $0.19 ——
Adjusted EBITDA ($USD Millions)$63.8 $89.0 $78.0 $74.4*Beat (by ~$3.6M)*
Company-Operated Gross Margin %22.2% 24.3% 21.0% ——
Company-Operated Contribution Margin %29.5% 31.1% 27.8% ——

Values with asterisks retrieved from S&P Global.*

Segment Revenue and Profitability

SegmentQ3 2024 Revenue ($M)Q2 2025 Revenue ($M)Q3 2025 Revenue ($M)
Company-Operated Shops$308.3 $380.5 $392.8
Franchising & Other$29.9 $35.3 $30.8
Total Revenue$338.2 $415.8 $423.6
Company-Operated ShopsQ3 2024Q2 2025Q3 2025
Gross Profit ($M)$68.4 $92.6 $82.4
Gross Margin %22.2% 24.3% 21.0%
Contribution ($M)$90.8 $118.2 $109.2
Contribution Margin %29.5% 31.1% 27.8%

KPIs

KPIQ3 2024Q2 2025Q3 2025
System Same Shop Sales YoY2.7% 6.1% 5.7%
System Transactions YoY0.8% 3.7% 4.7%
Company-Op Same Shop Sales YoY4.0% 7.8% 7.4%
Company-Op Transactions YoY2.4% 5.9% 6.8%
Dutch Rewards Mix of Transactions67.2% 71.6% 71.8%
Systemwide Sales ($M)$478.8 $571.3 $576.9
Shops Opened (Quarter)38 Q3’25 31 Q2’25 38 Q3’25
Total Shop Count (End)950 1,043 1,081
Order Ahead Mix——13%
AUV (TTM)Q3 2024 TTMQ2 2025 TTMQ3 2025 TTM
Systemwide AUV ($)$2,004 $2,053 $2,081
Company-Operated AUV ($)$1,921 $1,982 $2,023

Guidance Changes

MetricPeriodPrevious Guidance (Aug 6, 2025)Current Guidance (Nov 5, 2025)Change
Total RevenuesFY 2025$1.59–$1.60B $1.61–$1.615B Raised
System Same Shop Sales GrowthFY 2025~4.5% ~5% Raised
Adjusted EBITDAFY 2025$285–$290M $285–$290M Maintained
Capital ExpendituresFY 2025$240–$260M $240–$260M Maintained
System Shop OpeningsFY 2025At least 160 160 targeted; below-160 incremental to 2026 Clarified/Maintained
System Shop OpeningsFY 2026—~175 New detail
Adjusted SG&A LeverageFY 2025~90 bps (implied prior) ~110 bps Raised leverage assumption

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
Digital/Order Ahead & LoyaltyFoundation in place; momentum building; rewards ~71.8% Strength across Order Ahead & Rewards; rewards ~71.6% Order Ahead reached 13% mix (higher in new markets); rewards ~72% and segmented offers drove transactions; improved pickup timing UX Accelerating adoption and sophistication
Food ProgramEarly testing; path to rollout Food testing ongoing; not quantified ~4% comp lift in food shops; oven cycle < drink time; ~25% of lift from transactions; ~160 shops live; ~25% footprint constraints Scaling with positive KPIs
Coffee Cost InflationElevated costs contemplated in FY25 guidance Coffee costs rising Coffee costs accelerated in Q4 and may remain elevated into 2026 Worsening near term
Labor/RegulatoryOperating leverage improving SG&A leverage and labor investments CA payroll tax adds ~50 bps to Q4 labor line Near-term headwind
New Markets & Pipeline30 openings; national expansion continues 31 openings; 19 states; record pipeline 38 openings; 24 states; 30+ sites/month pipeline; target ~175 openings in 2026 Accelerating scale
Competition——No impact observed from McDonald’s energy/iced coffee pilot in Colorado Neutral to positive
AUVs/Four-wall EconomicsStrong AUVs and returns Record AUVs, improved adj. EBITDA Record AUVs; superior four-wall model reiterated Strong and durable

Management Commentary

  • “Q3 marked our fifth consecutive quarter of transaction growth, making us a clear outlier in the current environment… New shop productivity remains elevated, system-wide AUVs are at record highs” — Christine Barone, CEO .
  • “Early shop results suggest… ~4% comp lift in shops that have food, ~¼ from transaction growth” — Josh Guenser, CFO .
  • “Order Ahead mix reached 13%, with some new markets mixing at nearly double” — Christine Barone .
  • “Coffee costs… expected to accelerate into Q4… may remain elevated into 2026” — Josh Guenser .
  • “We are raising our full-year guidance for total revenues and system same shop sales growth” — Christine Barone .

Q&A Highlights

  • Food rollout: ~4% comp lift with ~25% from transactions; ovens designed to avoid throughput drag; slight COGS pressure expected as rollout scales .
  • Pricing/mix: ~2 pts price offset by ~1 pt negative mix (lower items per transaction), partly due to individual Order Ahead occasions .
  • Competition: No impact seen from the McDonald’s pilot in Colorado; strong October trends .
  • Labor/regulatory: ~50 bps Q4 labor impact from CA payroll tax changes; ongoing run rate lower thereafter .
  • Pipeline/growth: ~30 sites/month added to pipeline; majority translate to openings; supports ~175 2026 openings and path to 2,029 shops by 2029 .

Estimates Context

  • Q3 2025 results vs S&P Global consensus: Revenue $423.6M vs $413.6M (beat); Primary EPS $0.19 vs $0.1705 (beat, on “Primary EPS” basis); EBITDA $73.2M vs $74.4M (slight miss on SPGI-defined EBITDA); company-reported Adjusted EBITDA was $78.0M . Values retrieved from S&P Global.*
  • Q4 2025 consensus: Revenue $422.5M; Primary EPS $0.094; EBITDA $59.9M.*
  • Implications: Street likely raises FY revenue and comp assumptions given guidance raise; margin modeling should incorporate coffee inflation, CA payroll tax headwind (~50 bps), and food rollout COGS impact .
MetricQ3 2025 ConsensusQ3 2025 ActualQ4 2025 Consensus
Revenue ($USD)$413,603,540*$423,584,000 $422,528,360*
Primary EPS ($)$0.17047*$0.19*$0.09403*
EBITDA ($USD)$74,372,550*$73,206,000*$59,852,540*
# of Estimates (EPS)16*—15*
# of Estimates (Revenue)16*—16*

Values with asterisks retrieved from S&P Global.*

Key Takeaways for Investors

  • Transaction momentum is durable: five straight quarters, supported by digital and segmentation; watch Order Ahead mix and rewards penetration as leading indicators .
  • Growth algorithm intact: 38 Q3 openings, ~175 targeted in 2026, pipeline adding 30+ sites/month, reinforcing path to 2,029 shops by 2029 .
  • Near-term margin headwinds: coffee inflation into 2026, occupancy from build-to-suit leases, pre-opening costs, and CA payroll taxes (~50 bps in Q4); model lower company-operated margins near term .
  • Food program is additive: ~4% comp lift with transactional component; expect phased rollout benefits through 2026, with slight COGS pressure offset by ticket/attach .
  • Guidance risk skew: revenue/comp raised; adjusted EBITDA held — a prudent stance given cost pressures; upside if coffee prices moderate or food/digital adoption outperforms .
  • Competitive positioning strong: no observed impact from large-chain pilots; brand portability and customer connection remain differentiators .
  • Liquidity supports growth: ~$706M total liquidity (cash $267M + undrawn revolver ~$440M), average capex per shop ~$1.4M via capital-efficient build-to-suit leases .