Core Insights - Dutch Bros reported revenue of $415.81 million for the quarter ended June 2025, marking a year-over-year increase of 28% and exceeding the Zacks Consensus Estimate of $401.94 million by 3.45% [1] - The company achieved an EPS of $0.26, up from $0.19 a year ago, representing a surprise of 44.44% compared to the consensus estimate of $0.18 [1] Financial Performance Metrics - Dutch Bros' stock has returned -13.1% over the past month, while the Zacks S&P 500 composite has increased by 0.5% [3] - The company currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3] Shop Count and Sales Performance - Total shop count reached 1,043, slightly above the average estimate of 1,042 [4] - Franchised shop count was 318, compared to the estimated 322, while company-operated shops totaled 725, exceeding the estimate of 720 [4] - System same shop sales and transactions increased by 6.1%, surpassing the estimated 4.3% [4] - Company-operated same shop sales and transactions rose by 7.8%, compared to the average estimate of 5.3% [4] New Openings and Revenue Breakdown - Total new shop openings amounted to 31, slightly above the estimate of 30 [4] - Company-operated new openings were 30, exceeding the estimate of 26, while franchised new openings were only 1, below the estimate of 5 [4] - Revenues from franchising and other sources reached $35.31 million, exceeding the estimate of $32.46 million and reflecting a year-over-year increase of 19.1% [4] - Revenues from company-operated shops were $380.5 million, surpassing the estimate of $368.18 million and indicating a year-over-year change of 28.9% [4]

Core Insights - Dutch Bros (BROS) reported quarterly earnings of $0.26 per share, exceeding the Zacks Consensus Estimate of $0.18 per share, and showing an increase from $0.19 per share a year ago, resulting in an earnings surprise of +44.44% [1] - The company achieved revenues of $415.81 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 3.45% and up from $324.92 million year-over-year [2] - Dutch Bros has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Earnings Outlook - The sustainability of the stock's price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.17 on revenues of $407.71 million, and for the current fiscal year, it is $0.59 on revenues of $1.58 billion [7] Industry Context - The Retail - Restaurants industry, to which Dutch Bros belongs, is currently ranked in the bottom 32% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of Dutch Bros may be influenced by the overall outlook of the industry, as top-ranked industries tend to outperform lower-ranked ones significantly [8]

PART I FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=6&type=section&id=ITEM%201.%20Financial%20Statements%20%28Unaudited%29) Unaudited H1 2025 financial statements reflect significant revenue and net income growth, with total assets increasing to $2.81 billion and liabilities rising due to TRAs [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $2.81 billion, while liabilities grew to $1.98 billion, primarily due to tax receivable agreements Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$2,812,247** | **$2,501,085** | | Cash and cash equivalents | $254,415 | $293,354 | | Property and equipment, net | $747,831 | $683,971 | | Deferred income tax assets, net | $955,190 | $742,126 | | **Total Liabilities** | **$1,978,318** | **$1,737,220** | | Long-term debt, net | $196,838 | $219,755 | | Tax receivable agreements liability | $824,447 | $627,834 | | **Total Equity** | **$833,929** | **$763,865** | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 total revenues increased 28.0% to $415.8 million, with net income growing 73.1% to $38.4 million, driven by company-operated shops Statement of Operations Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$415,813** | **$324,918** | **+28.0%** | **$770,965** | **$600,017** | **+28.5%** | | Company-operated shops | $380,500 | $295,268 | +28.9% | $706,921 | $543,353 | +30.1% | | Franchising and other | $35,313 | $29,650 | +19.1% | $64,044 | $56,664 | +13.0% | | **Income from Operations** | **$54,659** | **$32,184** | **+69.8%** | **$85,731** | **$57,800** | **+48.3%** | | **Net Income** | **$38,357** | **$22,156** | **+73.1%** | **$60,837** | **$38,371** | **+58.6%** | | **Diluted EPS** | **$0.20** | **$0.12** | **+66.7%** | **$0.33** | **$0.20** | **+65.0%** | [Condensed Consolidated Statements of Cash Flows](index=17&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 operating cash flow increased to $126.8 million, while financing activities shifted to a $66.0 million outflow due to debt refinancing Cash Flow Summary - Six Months Ended June 30 (in thousands) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $126,781 | $100,729 | | Net cash used in investing activities | $(99,731) | $(113,240) | | Net cash provided by (used in) financing activities | $(65,989) | $139,888 | | **Net (decrease) increase in cash** | **$(38,939)** | **$127,377** | [Notes to Condensed Consolidated Financial Statements](index=19&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail significant accounting policies, including headquarters relocation costs, debt refinancing, and an increase in the Tax Receivable Agreements liability to $824.4 million - The company is undergoing a significant organizational realignment, relocating its headquarters from Grants Pass, Oregon to Phoenix, Arizona, with a new restructuring program approved in May 2025 expected to incur up to **$8.5 million** in charges[66](index=66&type=chunk)[67](index=67&type=chunk) - On May 29, 2025, the company amended and restated its credit facility, establishing a new **$500 million** revolving credit facility and a **$150 million** term loan facility (the '2025 Credit Facility'), which matures in 2030, with all outstanding debt under the previous facility repaid[77](index=77&type=chunk)[78](index=78&type=chunk) - The liability related to the Tax Receivable Agreements (TRAs) increased from **$627.8 million** at year-end 2024 to **$824.4 million** as of June 30, 2025, primarily due to the exchange of Dutch Bros OpCo units[94](index=94&type=chunk) - The company operates two reportable segments: Company-operated shops, which generate revenue from retail sales, and Franchising and other, which includes sales to franchisees, royalties, and fees[117](index=117&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong Q2 2025 performance driven by shop growth and same-shop sales, improved margins, debt refinancing, and addresses macroeconomic risks [Results of Operations](index=40&type=section&id=Results%20of%20Operations) Q2 2025 total revenue grew 28.0% driven by company-operated shops, with gross profit margin expanding due to sales leverage and reduced labor costs Key Performance Indicators - Q2 2025 vs Q2 2024 | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Shop Count | 1,043 | 912 | | Systemwide Same Shop Sales | 6.1% | 4.1% | | - Transactions | 3.7% | (2.0)% | | - Ticket | 2.4% | 6.1% | | Company-operated Same Shop Sales | 7.8% | 5.2% | | - Transactions | 5.9% | (0.8)% | | - Ticket | 1.9% | 6.0% | - Company-operated shop revenue growth in Q2 2025 was driven by **$63.9 million** from new shops and **$21.3 million** from a **7.8%** increase in same-shop sales[140](index=140&type=chunk) - Labor costs as a percentage of company-operated shop revenue decreased by **60 basis points** in Q2 2025 due to the impact of pricing, while beverage, food, and packaging costs decreased by **20 basis points**[145](index=145&type=chunk)[148](index=148&type=chunk) [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) The company ended Q2 2025 with $254.4 million in cash, generated $126.8 million from operations, and refinanced its debt with a new $500 million revolver and $150 million term loan - The company refinanced its debt in May 2025, securing a new facility consisting of a **$500 million** revolving credit facility and a **$150 million** term loan, which expires in May 2030[182](index=182&type=chunk) - As of June 30, 2025, cash and cash equivalents stood at **$254.4 million**, down from **$293.4 million** at the end of 2024[174](index=174&type=chunk) [Non-GAAP Financial Measures](index=50&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP measures show Q2 2025 Adjusted EBITDA increased to $89.0 million (21.4% of revenue), and company-operated shop contribution margin improved to 31.1% Adjusted EBITDA Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income | $38,357 | $22,156 | | Depreciation and amortization | $27,893 | $22,350 | | Interest expense, net | $7,076 | $6,997 | | Income tax expense | $7,243 | $3,860 | | **EBITDA** | **$80,569** | **$55,363** | | Equity-based compensation | $4,671 | $3,326 | | Expenses associated with credit facility refinancing | $2,000 | $— | | Organization realignment and restructurings | $1,763 | $6,694 | | Other adjustments | $— | $(224) | | **Adjusted EBITDA** | **$89,003** | **$65,159** | [Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from commodity price fluctuations, rising labor costs, and interest rate exposure on its floating-rate debt, partially mitigated by hedging - The company faces significant commodity risk from inputs like dairy, coffee, fuel, and sugar, and has been raising menu prices to offset inflation[213](index=213&type=chunk) - Labor costs are pressured by rising minimum wage requirements, notably in California, which increased to **$20/hour** for the industry in April 2024[214](index=214&type=chunk) - The company is exposed to interest rate risk on its **$200 million** of outstanding floating-rate debt as of June 30, 2025, where a **1%** rate increase would raise annual interest expense by approximately **$2.0 million**, excluding swap impacts[215](index=215&type=chunk) [Controls and Procedures](index=55&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - As of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[218](index=218&type=chunk) - No material changes to internal control over financial reporting occurred during the three months ended June 30, 2025[219](index=219&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=56&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is involved in routine legal actions incidental to its business, not currently expected to have a material adverse effect - The company is subject to routine litigation and claims incidental to its ordinary course of business[222](index=222&type=chunk) [Risk Factors](index=56&type=section&id=ITEM%201A.%20Risk%20Factors) Material changes to risk factors include potential impacts from international trade policies and evolving regulations and consumer attitudes regarding health and food additives - A new risk factor highlights that U.S. tariffs and restrictive trade policies could raise costs of imported green coffee beans, reduce margins, and disrupt supply chains[225](index=225&type=chunk)[226](index=226&type=chunk) - The company notes increasing risk from government regulations and consumer attitudes regarding diet and health, including menu labeling laws and potential restrictions on food additives and dyes, which could negatively influence demand[231](index=231&type=chunk)[232](index=232&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) On April 28, 2025, the company issued 1.75 million Class A common shares in an unregistered exchange for Dutch Bros OpCo units, with no proceeds received - On April 28, 2025, the company conducted an unregistered issuance of **1.75 million** shares of Class A common stock in exchange for an equal number of Dutch Bros OpCo units held by the Co-Founder's entities, with no proceeds received[237](index=237&type=chunk) [Defaults Upon Senior Securities](index=58&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the period - There were no defaults upon senior securities[238](index=238&type=chunk) [Mine Safety Disclosure](index=58&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosure) This disclosure item is not applicable to the company's operations - This section is not applicable to the company[239](index=239&type=chunk) [Other Information](index=58&type=section&id=ITEM%205.%20Other%20Information) No other material information is required to be reported under this item - There is no other information to report for this item[240](index=240&type=chunk) [Exhibits](index=59&type=section&id=ITEM%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including the new Credit Agreement and Sarbanes-Oxley certifications - Key exhibits filed include the new Second Amended and Restated Credit Agreement and Sarbanes-Oxley certifications[242](index=242&type=chunk)

Financial Data and Key Metrics Changes - Revenue for Q2 was $416 million, representing a 28% increase or $91 million over the same quarter last year [30] - Adjusted EBITDA for the quarter was $89 million, an increase of 37% or $24 million year-over-year [33] - Adjusted EPS was $0.26, up from $0.19, reflecting a 37% increase from Q2 of the previous year [38] Business Line Data and Key Metrics Changes - Company-operated same shop sales growth was 7.8%, with 5.9% attributed to transaction growth [33] - System same shop sales growth was 6.1%, driven by a 3.7% increase in transactions [31] - The company opened 31 new shops in Q2, bringing the total system shop count to 1,043 [32] Market Data and Key Metrics Changes - System-wide average unit volumes (AUVs) were $2,050,000, consistent with record levels [11] - Approximately 72% of system transactions were attributed to the loyalty program, a five-point increase from the same period last year [21] Company Strategy and Development Direction - The company is focused on a growth strategy, aiming to open at least 160 new shops in 2025, with a long-term goal of 2,029 shops by 2029 [15][14] - A three-part plan for transaction growth includes innovation, increased paid advertising, and emphasis on the Dutch rewards program [16][17] - The company is expanding its competitive advantages through strategic investments in market planning and operational efficiency [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing strong performance and momentum in Q2 [7][28] - The company is well-positioned to capture additional market share, driven by rising demand for cold beverages and energy drinks [29] - Management raised full-year guidance for total revenues, same shop sales growth, and adjusted EBITDA based on strong Q2 results [40] Other Important Information - The company has a robust operator pipeline with over 450 candidates, ensuring a consistent high bar across markets [13] - The company is transitioning the majority of its headquarters staff to Arizona, expecting to incur up to $8.5 million in non-recurring costs [38] Q&A Session Summary Question: CPG strategy for next year - Management plans to roll out CPG in markets where shops exist, with early rollout expected in 2026 [43][44] Question: Update on speed and throughput initiatives - Management is focused on labor deployment and has implemented speed dashboards to improve throughput [49][50] Question: New shop productivity and market specifics - New shop productivity remains elevated, with strong results across different markets [53] Question: Prioritization of investments in beverage and food platforms - Innovation is guided by market trends and customer testing, with a focus on various beverage categories [56][57] Question: Mobile order mix expectations - Mobile order mix is currently at 11.5%, with some newer markets exceeding this average [63] Question: Decision to roll out food program gradually - The gradual rollout of the food program allows for proper training and equipment installation in shops [67][68] Question: Clarification on Q3 guidance and marketing strategy - Management expects Q3 comps of 3.5% to 4%, with strong underlying traffic trends [71][72] Question: Marketing spend efficiency - Marketing spend is currently on the lower end compared to competitors, with a focus on efficiency [91][93]

Financial Data and Key Metrics Changes - The company reported Q2 revenue of $416 million, representing a 28% increase year-over-year, or $91 million more than the same quarter last year [28] - Adjusted EBITDA for the quarter was $89 million, reflecting a 37% increase, or $24 million more than Q2 of the previous year [31] - Adjusted EPS was $0.26, up from $0.19, marking a 37% increase year-over-year [37] Business Line Data and Key Metrics Changes - Company-operated same shop sales growth was 7.8%, with 5.9% attributed to transaction growth [31] - System same shop sales growth was 6.1%, driven by a 3.7% increase in transactions [29] - The company opened 31 new shops in Q2, bringing the total system shop count to 1,043 [30] Market Data and Key Metrics Changes - System-wide average unit volumes (AUVs) were $2,050,000, consistent with record levels [9] - Approximately 72% of system transactions were attributed to the loyalty program, a five-point increase from the same period last year [19] Company Strategy and Development Direction - The company aims to open at least 160 new shops in 2025, with a long-term goal of reaching 2,029 shops by 2029 [14] - A focus on transaction-driving initiatives includes enhancing category-wide innovation, increasing paid advertising, and emphasizing the Dutch rewards program [15] - The company is expanding its competitive advantages through strategic investments in market planning and operational efficiency [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing strong performance and a robust operator pipeline [12][25] - The company is well-positioned to capture additional market share, driven by rising demand for cold beverages and energy drinks [27] - Management raised full-year guidance for total revenues, same shop sales growth, and adjusted EBITDA based on strong Q2 results [39] Other Important Information - The company successfully refinanced its credit facility, securing $650 million in total capacity, enhancing liquidity for long-term growth [37] - Labor costs were 26.6% of company-operated shop revenue, showing a favorable year-over-year change due to sales leverage [34] Q&A Session Summary Question: CPG strategy for next year - Management indicated that the CPG rollout will focus on areas where shops are located, with early rollout expected in 2026 [42][43] Question: Update on speed and throughput initiatives - Management noted ongoing efforts in labor deployment and the introduction of speed dashboards to improve throughput [48][49] Question: Market specifics on new shop productivity - New shop productivity remains elevated, with strong results across various markets, including a new shop in Georgia [51][52] Question: Innovation and resource allocation - Management described innovation as a mix of art and science, focusing on customer testing and market trends to maintain competitive advantage [54][56] Question: Mobile order mix expectations - The mobile order mix is currently at 11.5%, with some newer markets exceeding this average, and management is optimistic about future growth [60][61] Question: Food program rollout decision - The phased rollout of the food program is to ensure proper training and equipment installation in shops [65][66] Question: Q3 performance and marketing strategy - Management confirmed strong underlying traffic trends entering Q3, with plans for a more normalized marketing approach [71][72] Question: Mobile order contribution to transaction growth - Mobile order is driving transaction growth, particularly in the morning daypart, with a focus on enhancing customer experience [78][80] Question: Marketing spend efficiency - Management is currently on the lower end of marketing spend as a percentage of sales but sees potential for increased efficiency [92][95]

Core Insights - Dutch Bros, Inc. reported second-quarter earnings of 26 cents per share, exceeding the analyst consensus estimate of 18 cents, with quarterly revenue of $415.8 million, surpassing the Street estimate of $403.08 million [1][4] Financial Performance - Total revenues grew by 28% to $415.8 million compared to $324.9 million in the same period of 2024 [5] - Company-operated shops revenues increased by 28.9% to $380.5 million compared to $295.3 million in the same period of 2024 [5] - Company-operated shops gross profit was $92.6 million compared to $70 million in the same period of 2024 [5] - Company-operated shops contribution grew by 29.9% to $118.2 million compared to $91.1 million in the same period of 2024 [5] Operational Highlights - Dutch Bros opened 31 new shops, 30 of which were company-operated, across 13 states [5] - Systemwide same shop sales increased by 6.1% and systemwide same shop transactions increased by 3.7% relative to the same period in 2024 [5] Future Outlook - Dutch Bros raised its fiscal 2025 revenue outlook to between $1.59 billion and $1.6 billion, compared to the $1.58 billion analyst estimate [4]

Financial Performance - Total revenue for Q2 2025 reached $415813 million, a 28% increase compared to $324918 million in Q2 2024[11] - Company-operated shop revenue increased to $3805 million in Q2 2025 from $2953 million in Q2 2024[11] - Adjusted EBITDA increased by 37% to $89 million in Q2 2025, compared to $65 million in Q2 2024[13] - Net income attributable to Dutch Bros Inc increased to $25624 million in Q2 2025 from $11940 million in Q2 2024[31] Sales Metrics - Systemwide same shop sales increased by 61% in Q2 2025[17] - Company-operated same shop sales increased by 78% in Q2 2025[17] - Dutch Rewards transactions accounted for 716% of total transactions[36] Shop Expansion - The total shop count reached 1043 in Q2 2025, up from 912 in Q2 2024, representing a 14% increase[10] - Company-operated shops increased to 725 in Q2 2025 from 612 in Q2 2024, an 18% increase[10] Outlook - The company projects total revenue between $159 billion and $160 billion for FY 2025[23] - The company anticipates same shop sales growth of approximately 45% for FY 2025[23]

Exhibit 99.1 Dutch Bros Inc. Reports Second Quarter 2025 Financial Results Achieves 28% Revenue Growth Year-Over-Year Delivers 6.1% Systemwide and 7.8% Company-Operated Same Shop Sales Growth Raises 2025 Guidance on Total Revenues, Same Shop Sales Growth and Adjusted EBITDA TEMPE, Ariz. - August 6, 2025 - Dutch Bros Inc. (NYSE: BROS; "Dutch Bros" or the "Company"), one of the fastest- growing brands in the U.S. quick service beverage industry, today reported financial results for the second quarter ended Ju ...

Company Overview - Dutch Bros Inc. operates approximately 1,000 coffee shops across 18 states in the U.S. market [1] - The company is recognized as a high-growth coffee chain [1] Target Market - Dutch Bros has successfully attracted younger generations by focusing on cold beverages and energy drinks [1]

Key Takeaways Dutch Bros' Q2 revenues likely rose on same shop sales growth and higher transaction volume.Menu innovation and strong loyalty program use may have boosted customer engagement.Higher labor costs and inflationary pressures are likely to have weighed on Q2 profitability.Dutch Bros Inc. (BROS) is scheduled to report second-quarter 2025 results on Aug. 6, after market close. In the last reported quarter, the company delivered an earnings surprise of 40%.    BROS’ earnings beat the Zacks Consensus ...