Core Insights - Happy Belly Food Group Inc. has signed a franchise agreement for a new Heal Wellness location in Calgary's Britannia neighborhood, marking the 7th location in Calgary and the 10th in Alberta, as part of a 15-unit expansion plan across the province [1][3][4] - The new location is expected to open in Q4 of this year, alongside several other stores currently under construction, indicating strong growth momentum for Heal Wellness and the broader Happy Belly portfolio [3][4] - Heal Wellness is positioned as Canada's first national smoothie bowl brand, with increasing brand awareness and loyalty across new markets, supported by a robust franchise system [4][8] Company Expansion - The company has secured 195 units for Heal Wellness under development agreements across Alberta, Ontario, and Prince Edward Island, setting the stage for continued expansion [8] - Happy Belly's portfolio includes 616 retail locations under contract, with a focus on disciplined growth through strategic partnerships and prime real estate selection [9] - The company emphasizes a blend of organic expansion and strategic acquisitions to drive measurable results and reinforce brand scalability [4][9] Market Positioning - The new Britannia location is strategically chosen for its mix of residential and commercial areas, ensuring a steady flow of customers seeking healthy dining options [5] - The community's health-conscious demographic aligns well with Heal Wellness's menu offerings, which include smoothie bowls and superfood ingredients [5][10] - The company's asset-light approach and strong franchise engagement are seen as key factors in unlocking value for stakeholders and signaling long-term growth potential [4][9]

[PART I – Financial Information](index=5&type=section&id=PART%20I%20%E2%80%93%20Financial%20Information) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the quarterly period ended June 30, 2025, including Balance Sheets, Statements of Operations, Comprehensive Income, Shareholders' Equity, and Cash Flows, with detailed notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $25.7 billion from $24.6 billion, driven by intangible assets and goodwill, while total liabilities rose to $20.6 billion and equity to $5.1 billion Condensed Consolidated Balance Sheet Highlights (in millions USD) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $2,788 | $2,282 | | **Total Assets** | **$25,688** | **$24,632** | | **Total Current Liabilities** | $2,754 | $2,364 | | **Long-term Debt, net** | $13,428 | $13,455 | | **Total Liabilities** | **$20,598** | **$19,789** | | **Total Shareholders' Equity** | **$5,090** | **$4,843** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 total revenues increased to $2.41 billion from $2.08 billion, but net income decreased to $189 million from $280 million due to higher costs and a non-recurring prior-year gain Q2 2025 vs Q2 2024 Statement of Operations (in millions USD, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Total Revenues** | $2,410 | $2,080 | | **Income from Operations** | $483 | $663 | | **Net Income** | $263 | $399 | | **Net Income Attributable to Common Shareholders** | $189 | $280 | | **Diluted Net Income per Share** | $0.57 | $0.88 | H1 2025 vs H1 2024 Statement of Operations (in millions USD, except per share data) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | **Total Revenues** | $4,519 | $3,819 | | **Income from Operations** | $918 | $1,207 | | **Net Income** | $484 | $727 | | **Net Income Attributable to Common Shareholders** | $348 | $510 | | **Diluted Net Income per Share** | $1.06 | $1.60 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities increased to $567 million, while investing activities used less cash, and financing activities used more due to higher dividends and lower debt proceeds Six Months Ended June 30 Cash Flows (in millions USD) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $567 | $482 | | **Net cash used for investing activities** | ($202) | ($559) | | **Net cash used for financing activities** | ($555) | ($112) | | **Decrease in cash and cash equivalents** | ($308) | ($197) | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes explain financial statements, covering business description, revenue recognition, segment reporting, recent acquisitions, debt, derivatives, equity, income taxes, and legal contingencies - As of June 30, 2025, RBI franchised or owned **32,229 restaurants** across its four brands: Tim Hortons (**6,075**), Burger King (**19,666**), Popeyes (**5,086**), and Firehouse Subs (**1,402**)[26](index=26&type=chunk) - On February 14, 2025, RBI acquired the remaining equity interests of BK China for approximately **$151 million**. The business is classified as held for sale and reported as discontinued operations, with plans to find a new controlling partner within twelve months[62](index=62&type=chunk) - On May 16, 2024, RBI acquired the remaining 85% of Carrols Restaurant Group for **$9.55 per share** in a cash transaction totaling **$543 million**. This resulted in a **$79 million gain** in Q2 2024 from remeasuring the existing 15% equity interest[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) - The Board of Directors approved a new **$1 billion share repurchase program** effective from September 15, 2025, to September 30, 2027, replacing the prior authorization. No shares were repurchased in the first six months of 2025[116](index=116&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses performance, including the new 'Restaurant Holdings' segment, revenue growth from acquisitions, net income decline due to non-recurring gain and FX losses, and strategic investments - A new operating and reportable segment, Restaurant Holdings (RH), was established to include results from the acquired Carrols Burger King restaurants and PLK China restaurants. This separates the company-owned operations from the core franchisor segments[133](index=133&type=chunk)[134](index=134&type=chunk) Consolidated Key Operating Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | System-wide Sales Growth | 5.3% | 5.0% | | Comparable Sales | 2.4% | 1.9% | | Net Restaurant Growth | 2.9% | 4.0% | - The decrease in Income from Operations in Q2 2025 was primarily driven by the non-recurrence of a **$79 million gain** recognized in Q2 2024 from the Carrols Acquisition and current year net losses on foreign exchange[144](index=144&type=chunk)[151](index=151&type=chunk) - Burger King is executing its multi-year "Reclaim the Flame" plan, investing up to **$700 million** through 2028 in advertising, digital, and restaurant remodels to accelerate sales growth[187](index=187&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes occurred in the company's market risk disclosures during the first six months of 2025 compared to the prior year's annual report - There were **no material changes** to the company's quantitative and qualitative disclosures about market risk during the six months ended June 30, 2025[209](index=209&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of June 30, 2025, and is integrating recently acquired businesses into the internal control framework - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of June 30, 2025[210](index=210&type=chunk) - The company is integrating the acquired Carrols and BK China businesses into its overall internal control over financial reporting process[211](index=211&type=chunk) [PART II – Other Information](index=51&type=section&id=PART%20II%20%E2%80%93%20Other%20Information) [Item 1. Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) This section references Note 17, detailing ongoing litigation, including a class action regarding Burger King's no-hiring clause and a complaint from former Carrols shareholders - The company is defending against a consolidated class action lawsuit alleging that an employee no-solicitation and no-hiring clause in Burger King's standard franchise agreement violated Section 1 of the Sherman Act[127](index=127&type=chunk) - A complaint was filed by purported former shareholders of Carrols alleging breach of fiduciary duty by RBI in connection with the acquisition of Carrols. The court denied RBI's motion to dismiss in July 2025[128](index=128&type=chunk) [Item 5. Other Information](index=51&type=section&id=Item%205.%20Other%20Information) Discloses compensatory arrangements, specifically CFO Mr. Siddiqui's target award of 73,507 performance-based restricted stock units on May 15, 2025 - On May 15, 2025, CFO Sami Siddiqui received a target award of **73,507 performance-based RSUs (PSUs)** to reward his strong performance since assuming the CFO position[220](index=220&type=chunk) [Item 6. Exhibits](index=52&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the Form 10-Q, including the CFO's Performance Award Agreement and Sarbanes-Oxley Act certifications - The report includes several exhibits, such as the CFO's Performance Award Agreement and certifications required under Sections 302 and 906 of the Sarbanes-Oxley Act[221](index=221&type=chunk)

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Core Insights - Restaurant Brands reported revenue of $2.41 billion for the quarter ended June 2025, reflecting a year-over-year increase of 15.9% and a surprise of +2.91% over the Zacks Consensus Estimate of $2.34 billion [1] - The earnings per share (EPS) for the quarter was $0.94, which is an increase from $0.86 in the same quarter last year, but fell short of the consensus estimate of $0.97, resulting in an EPS surprise of -3.09% [1] Financial Performance Metrics - Comparable Sales for Burger King (BK) globally were reported at 1.3%, slightly below the average estimate of 1.6% [4] - Comparable Sales for Popeyes Louisiana Kitchen (PLK) globally were -1.4%, compared to the average estimate of 0.9% [4] - Comparable Sales for Tim Hortons (TH) globally were 3.4%, exceeding the average estimate of 1.8% [4] - Comparable Sales for International (INTL) were 4.2%, surpassing the average estimate of 3.3% [4] Revenue Breakdown - Franchise and property revenues reached $760 million, exceeding the average estimate of $752.61 million, with a year-over-year change of +1.7% [4] - Advertising revenues and other services totaled $318 million, slightly above the estimated $310.54 million, representing a +4.6% change year-over-year [4] - Firehouse Subs (FHS) revenues were $59 million, compared to the average estimate of $56.33 million, marking an 11.3% year-over-year increase [4] System-wide Sales - System-wide sales for Tim Hortons (TH) were $2 billion, exceeding the average estimate of $1.94 billion, with a +2.9% year-over-year change [4] - System-wide sales for Burger King (BK) were $2.95 billion, slightly above the average estimate of $2.93 billion, reflecting a +0.9% year-over-year change [4] - System-wide sales for Popeyes Louisiana Kitchen (PLK) were $1.58 billion, just below the average estimate of $1.59 billion, with a +1.5% year-over-year change [4] - System-wide sales for Firehouse Subs (FHS) were $336 million, in line with the average estimate of $336.83 million, representing a +6.3% year-over-year change [4] - International revenues were $250 million, exceeding the average estimate of $247.19 million, with a +7.8% year-over-year change [4]

Financial Data and Key Metrics Changes - In Q2 2025, the company reported a 2.4% year-over-year increase in comparable sales, with system-wide sales growth of 5.3% and organic adjusted operating income (AOI) growth of 5.7% [6][29] - Adjusted EPS increased to $0.94 per share from $0.86, representing a nominal growth of 9.2% [33] - Free cash flow generated in Q2 was $446 million, with total liquidity at $2.3 billion [34][35] Business Line Data and Key Metrics Changes - Tim Hortons, accounting for about 43% of the business, achieved a 3.6% increase in Canadian comparable sales, marking its seventeenth consecutive quarter of positive sales [9][10] - The International segment, representing 26% of adjusted operating income, delivered nearly 10% system-wide sales growth and 4.2% comparable sales growth [14][15] - Burger King U.S. saw a 1.5% increase in comparable sales, while Popeyes experienced system-wide sales growth of 1.9% [20][27] Market Data and Key Metrics Changes - The international business outperformed many global peers, with strong growth in markets like the U.K., Spain, Australia, and Germany [15][72] - Burger King China reported positive comparable sales in Q2, indicating a turnaround after previous declines [19][75] Company Strategy and Development Direction - The company is focused on returning to a simplified business model, including refranchising efforts for Carrol's restaurants and positioning Burger King China for success with a new partner [9][41] - The strategy emphasizes quality, service, and convenience, with disciplined marketing and operational improvements [8][45] - The company aims for at least 8% organic adjusted operating income growth in 2025 [9][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to build on momentum in the second half of the year, despite a dynamic consumer environment [7][9] - The management highlighted the importance of operational consistency and the positive impact of remodels on performance [20][100] - There is optimism regarding the normalization of commodity prices, particularly for beef and coffee, which could benefit operations [36][37] Other Important Information - The company is actively working with Morgan Stanley to identify a new local partner for Burger King China [20] - The capital allocation priorities include investing in brands, maintaining a healthy dividend, and steady deleveraging [35][39] Q&A Session Summary Question: Performance of Carrols restaurants and refranchising plans - Management noted that the outperformance of Carrols restaurants is due to high operational standards and successful remodels, with refranchising efforts starting ahead of schedule [52][56] Question: QSR market conditions in Canada - Management highlighted Tim Hortons' consistent performance and improvement in consumer confidence, indicating no expected deterioration in trends [60][62] Question: International business momentum - Management emphasized strong growth in international markets, particularly in Spain, Germany, and the U.K., with positive developments in Burger King France and China [68][72] Question: Digital strategy and AI capabilities - Management expressed excitement about leveraging AI to enhance customer experience and operational efficiency, indicating ongoing developments in this area [80][82] Question: Value creation for Burger King in the U.S. - Management confirmed a stable value offering strategy, focusing on core items, premium offerings, and relevant value promotions to sustain momentum [86][90]

Financial Data and Key Metrics Changes - The company reported global comparable sales growth of 2.4% and system-wide sales growth of 5.3% in Q2 2025, with organic adjusted operating income (AOI) growth of 5.7% [28][5][39] - Adjusted EPS increased to $0.94 per share from $0.86 last year, representing nominal growth of 9.2% [28][30] - Free cash flow generated in Q2 was $446 million, with total liquidity at $2.3 billion [32][33] Business Line Data and Key Metrics Changes - Tim Hortons, accounting for about 43% of the business, saw Canadian comparable sales accelerate to 3.6% [7][12] - The International segment, which represents 26% of adjusted operating income, delivered nearly 10% system-wide sales growth and 4.2% comparable sales [13][14] - Burger King U.S. experienced a 1.5% growth in comparable sales, while Popeyes reported system-wide sales growth of 1.9% [19][25] Market Data and Key Metrics Changes - The international business outperformed many global peers, with strong growth in markets like the U.K., Spain, Australia, and Germany [13][14] - Burger King China showed positive comparable sales in Q2, indicating a turnaround after previous struggles [18][48] Company Strategy and Development Direction - The company is focused on returning to a simplified business model, including refranchising efforts for Carrol's restaurants and positioning Burger King China for success [7][40] - The strategy emphasizes quality, service, and convenience, with disciplined marketing and operational improvements [6][45] - The company aims for at least 8% organic adjusted operating income growth in 2025 [7][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to build on momentum in the second half of the year, despite a dynamic consumer environment [5][39] - The company is optimistic about the long-term potential of Burger King China and the international segment, highlighting strong brand awareness and favorable market dynamics [18][14] Other Important Information - The company is actively working with Morgan Stanley to identify a new local partner for Burger King China [19][30] - The capital allocation priorities remain focused on investing in brands, maintaining dividends, and deleveraging over time [33][34] Q&A Session Summary Question: Performance of Carrols restaurants and refranchising plans - Management attributed the outperformance of Carrols restaurants to high operational standards and significant investments in remodels, with refranchising efforts starting earlier than planned [52][56] Question: QSR market conditions in Canada - Management noted Tim Hortons' consistent performance and improvement in consumer confidence, distinguishing it from competitors [60][62] Question: International business momentum - Management highlighted strong growth in international markets, particularly in Spain, Germany, and the U.K., with positive developments in Burger King China [70][74] Question: Digital strategy and AI capabilities - Management expressed excitement about leveraging AI to enhance customer experience and operational efficiency, indicating ongoing developments in this area [81][83] Question: Value platform and franchisee alignment - Management characterized the value offerings as stable and emphasized a balanced approach to core items, premium offerings, and value [88][90]

Core Viewpoint - Restaurant Brands (QSR) reported quarterly earnings of $0.94 per share, missing the Zacks Consensus Estimate of $0.97 per share, but showing an increase from $0.86 per share a year ago [1][2] Financial Performance - The company posted revenues of $2.41 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.91%, compared to $2.08 billion in the same quarter last year [3] - Over the last four quarters, Restaurant Brands has exceeded consensus revenue estimates twice [3] Stock Performance - Restaurant Brands shares have increased by approximately 5.3% since the beginning of the year, while the S&P 500 has gained 7.9% [4] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [7] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.01 on revenues of $2.38 billion, and for the current fiscal year, it is $3.69 on revenues of $9.2 billion [8] - The estimate revisions trend for Restaurant Brands was mixed ahead of the earnings release, which may change following the recent report [7] Industry Context - The Retail - Restaurants industry is currently ranked in the bottom 31% of over 250 Zacks industries, suggesting potential challenges for stock performance [9] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact investor sentiment [6]

Core Insights - Restaurant Brands International reported mixed quarterly results, with net income attributable to shareholders decreasing to $189 million, or 57 cents per share, down from $280 million, or 88 cents per share a year earlier [1][2] Financial Performance - Excluding transaction costs from the acquisition of Burger King China, the company earned 94 cents per share, slightly below the expected 97 cents [5] - Net sales increased by 16% to $2.41 billion, surpassing the expected $2.32 billion [5] - Same-store sales rose by 2.4% during the quarter, with international restaurants showing stronger growth at 4.2% [2][3] Segment Performance - Tim Hortons, which contributes over 40% of total revenue, reported same-store sales growth of 3.4% [3] - Burger King achieved same-store sales growth of 1.3%, with its U.S. division seeing a 1.5% increase [3] - Popeyes experienced a decline in same-store sales of 1.4%, marking it as the underperformer in the portfolio [3] Future Outlook - The company reiterated its full-year forecast, expecting to spend between $400 million and $450 million on capital expenditures and incentives [4] - Restaurant Brands anticipates achieving its long-term growth targets of 3% same-store sales growth and 8% organic adjusted operating income growth on average from 2024 to 2028 [4]

[Restaurant Brands International Inc. Q2 2025 Results](index=1&type=section&id=Restaurant%20Brands%20International%20Inc.%20Q2%202025%20Results) [Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) RBI's Q2 2025 consolidated system-wide sales grew 5.3%, driven by international markets and accelerating comparable sales - CEO Josh Kobza highlighted strong progress in strategic priorities, with improved sales trends led by Tim Hortons and International businesses, expressing confidence in delivering **8%+ organic Adjusted Operating Income growth in 2025**[2](index=2&type=chunk) Q2 2025 Consolidated Financial Highlights (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | System-Wide Sales Growth | 5.3% | 5.0% | +0.3 ppt | | Comparable Sales | 2.4% | 1.9% | +0.5 ppt | | Total Revenues | $2,410M | $2,080M | +15.9% | | Income from Operations | $483M | $663M | -27.2% | | Diluted EPS | $0.58 | $0.88 | -34.1% | | Adjusted Operating Income | $668M | $632M | +5.7% | | Adjusted Diluted EPS | $0.94 | $0.86 | +9.2% | | Net Leverage | 4.6x | 5.0x | -0.4x | [Key Business Updates and Reporting Changes](index=2&type=section&id=Key%20Business%20Updates%20and%20Reporting%20Changes) RBI established a new 'Restaurant Holdings' segment, classified Burger King China as a discontinued operation, and updated its AOI presentation - A new operating and reportable segment, **Restaurant Holdings (RH)**, was established to include results from the newly acquired Carrols Burger King restaurants (May 16, 2024) and Popeyes China restaurants (June 28, 2024)[4](index=4&type=chunk) - On February 14, 2025, RBI acquired the remaining equity in Burger King China, which is now **classified as held for sale** and reported as discontinued operations as the company seeks a new controlling shareholder[7](index=7&type=chunk)[8](index=8&type=chunk) - The presentation of Adjusted Operating Income (AOI) was updated to exclude Franchise Agreement Amortization and Reacquired Franchise Rights Amortization from Segment Franchise and Property Expenses, a change that **does not impact total AOI** or consolidated results[6](index=6&type=chunk) [Segment Performance Analysis](index=3&type=section&id=Segment%20Performance%20Analysis) The International segment led growth, Tim Hortons and Burger King US saw positive comparable sales, while acquisitions boosted Popeyes' results [Tim Hortons (TH) Segment Results](index=3&type=section&id=Tim%20Hortons%20(TH)%20Segment%20Results) The Tim Hortons segment reported 3.9% system-wide sales growth, driven by a 3.6% comparable sales increase in Canada and higher supply chain sales TH Segment Q2 2025 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | System-wide Sales Growth | 3.9% | 5.4% | -1.5 ppt | | Comparable Sales | 3.4% | 4.6% | -1.2 ppt | | Comparable Sales - Canada | 3.6% | 4.9% | -1.3 ppt | | Total Revenues | $1,083M | $1,031M | +5.0% | | Adjusted Operating Income | $278M | $269M | +3.3% | - The increase in Total Revenues was mainly driven by higher Supply Chain Sales, while the rise in Adjusted Operating Income was attributed to revenue growth and lower G&A expenses[12](index=12&type=chunk)[13](index=13&type=chunk) [Burger King (BK) Segment Results](index=4&type=section&id=Burger%20King%20(BK)%20Segment%20Results) The Burger King segment's system-wide sales grew 1.0%, with US comparable sales up 1.5% amid its ongoing "Reclaim the Flame" initiative BK Segment Q2 2025 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | System-wide Sales Growth | 1.0% | -0.7% | +1.7 ppt | | Comparable Sales | 1.3% | -0.1% | +1.4 ppt | | Comparable Sales - US | 1.5% | 0.1% | +1.4 ppt | | Total Revenues | $388M | $364M | +6.6% | | Adjusted Operating Income | $121M | $114M | +6.1% | - The company is executing its multi-year "Reclaim the Flame" plan, investing up to **$700 million through 2028**, with $152 million funded as of June 30, 2025[17](index=17&type=chunk) - The increase in Adjusted Operating Income was primarily due to the **non-recurrence of $6 million in 'Fuel the Flame' expenses** from the prior year and lower compensation-related G&A expenses[19](index=19&type=chunk) [Popeyes (PLK) Segment Results](index=5&type=section&id=Popeyes%20(PLK)%20Segment%20Results) Popeyes' revenue and operating income growth was driven by the acquisition of company restaurants, despite a decline in comparable sales PLK Segment Q2 2025 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | System-wide Sales Growth | 1.6% | 4.6% | -3.0 ppt | | Comparable Sales | -1.4% | 0.5% | -1.9 ppt | | Total Revenues | $210M | $194M | +8.2% | | Adjusted Operating Income | $66M | $62M | +6.5% | - The increases in Total Revenues and Adjusted Operating Income were primarily driven by the **acquisition of company restaurants** as part of the Carrols Acquisition[20](index=20&type=chunk) [Firehouse Subs (FHS) Segment Results](index=5&type=section&id=Firehouse%20Subs%20(FHS)%20Segment%20Results) The Firehouse Subs segment achieved 6.3% system-wide sales growth, which drove increases in both total revenues and operating income FHS Segment Q2 2025 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | System-wide Sales Growth | 6.3% | 3.3% | +3.0 ppt | | Comparable Sales | -0.8% | -0.1% | -0.7 ppt | | Total Revenues | $59M | $53M | +11.3% | | Adjusted Operating Income | $15M | $13M | +15.4% | - The increases in Total Revenues and Adjusted Operating Income were primarily driven by the **increase in System-wide Sales**[21](index=21&type=chunk) [International (INTL) Segment Results](index=6&type=section&id=International%20(INTL)%20Segment%20Results) The International segment demonstrated strong performance with 9.8% system-wide sales growth, fueled by higher royalties from Burger King and Popeyes INTL Segment Q2 2025 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | System-wide Sales Growth | 9.8% | 9.2% | +0.6 ppt | | Comparable Sales | 4.2% | 2.6% | +1.6 ppt | | Total Revenues | $250M | $232M | +7.8% | | Adjusted Operating Income | $172M | $160M | +7.5% | - Revenue and AOI growth was driven by higher royalties from Burger King and Popeyes, partially offset by the **absence of $10 million in revenues from BK China**, which was recognized in the prior year[23](index=23&type=chunk) [Restaurant Holdings (RH) Segment Results](index=7&type=section&id=Restaurant%20Holdings%20(RH)%20Segment%20Results) The new Restaurant Holdings segment reported initial results post-acquisitions, with Burger King restaurants showing 2.9% comparable sales growth RH Segment Q2 2025 Performance | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $469M | $230M | | Company Restaurant Expenses | $406M | $194M | | Adjusted Operating Income | $16M | $14M | | BK Comparable Sales | 2.9% | -1.6% | [Capital Allocation and Shareholder Returns](index=8&type=section&id=Capital%20Allocation%20and%20Shareholder%20Returns) RBI declared a $0.62 per share dividend and approved a new $1 billion share repurchase authorization, while prioritizing debt reduction - A dividend of **$0.62 per common share** was declared for the third quarter of 2025, payable on October 7, 2025[27](index=27&type=chunk) - A new share repurchase authorization for up to **$1 billion of common shares** was approved, valid from September 15, 2025, to September 30, 2027[28](index=28&type=chunk) - While the new share repurchase authorization provides capital allocation flexibility, the company remains committed to **prioritizing debt reduction** in the near term[28](index=28&type=chunk) [Financial Guidance and Outlook](index=8&type=section&id=Financial%20Guidance%20and%20Outlook) RBI reaffirmed its 2025 financial guidance and maintained its long-term algorithm targeting 8%+ organic Adjusted Operating Income growth annually 2025 Financial Guidance | Metric | 2025 Expectation | | :--- | :--- | | Segment G&A (excluding RH) | $600M - $620M | | RH Segment G&A | ~$100M | | Total Capex and Cash Inducements | $400M - $450M | | Adjusted Interest Expense, net | ~$520M | Long-Term Algorithm (2024-2028 Average) | Metric | Long-Term Target | | :--- | :--- | | Comparable Sales | 3%+ | | Organic Adjusted Operating Income Growth | 8%+ | | Net Restaurant Growth | Reaching 5%+ towards end of period | [Consolidated Financial Statements](index=10&type=section&id=Consolidated%20Financial%20Statements) Acquisitions drove a significant revenue increase, but higher operating costs led to a decline in net income despite strong operating cash flow [Condensed Consolidated Statements of Operations](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Total revenues rose to $2.41 billion, but higher operating costs caused income from operations to fall to $483 million from $663 million year-over-year Q2 2025 Statement of Operations Summary | (in millions) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $2,410 | $2,080 | | Total operating costs and expenses | $1,927 | $1,417 | | Income from operations | $483 | $663 | | Net income from continuing operations | $264 | $399 | | Diluted EPS from continuing operations | $0.58 | $0.88 | [Condensed Consolidated Balance Sheets](index=11&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $25.69 billion as of June 30, 2025, driven by growth in intangible assets, goodwill, and assets held for sale Balance Sheet Summary | (in millions) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total current assets | $2,788 | $2,282 | | Total assets | $25,688 | $24,632 | | Total current liabilities | $2,754 | $2,364 | | Long-term debt, net | $13,428 | $13,455 | | Total liabilities | $20,598 | $19,789 | | Total shareholders' equity | $5,090 | $4,843 | [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, net cash from operating activities was $567 million, while financing activities were primarily used for dividend payments Six Months 2025 Cash Flow Summary | (in millions) | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $567 | $482 | | Net cash used for investing activities | ($202) | ($559) | | Net cash used for financing activities | ($555) | ($112) | | Decrease in cash and cash equivalents | ($308) | ($197) | | Cash and cash equivalents at end of period | $1,026 | $942 | [Non-GAAP Financial Measures and Reconciliations](index=13&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) RBI uses non-GAAP metrics like AOI and Organic Growth to clarify underlying performance, reporting 5.7% organic AOI growth and improved Net Leverage of 4.6x - The company uses non-GAAP measures to provide investors with a consistent comparison of operating results, excluding items that may cause volatility unrelated to core business performance[45](index=45&type=chunk)[46](index=46&type=chunk)[49](index=49&type=chunk) - Organic growth metrics for revenue, AOI, and Adjusted Diluted EPS are calculated to exclude the impact of foreign exchange movements and the results of the new RH segment[56](index=56&type=chunk) Net Leverage Reconciliation | (in millions, except ratio) | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total debt | $14,035 | $14,137 | | Cash and cash equivalents | $1,026 | $942 | | Net debt | $13,009 | $13,195 | | LTM Adjusted EBITDA | $2,840 | $2,649 | | **Net Leverage** | **4.6x** | **5.0x** | Q2 2025 Organic Growth Summary | Metric | Reported Growth | Organic Growth | | :--- | :--- | :--- | | Total Revenues | 15.9% | 6.6% | | Income from Operations | -27.2% | -27.4% | | Adjusted Operating Income | 5.7% | 5.7% | | Adjusted Diluted EPS | 9.2% | 10.3% |

Core Insights - Restaurant Brands International Inc. (RBI) reported a consolidated system-wide sales growth of 5.3% year-over-year, with international sales growing by 9.8% [1][2] - Comparable sales increased by 2.4%, with Burger King International and Tim Hortons Canada showing growth rates of 4.1% and 3.6% respectively [1][2] - The company is on track to achieve over 8% organic Adjusted Operating Income growth by 2025 [1] Financial Performance - Total revenues for Q2 2025 reached $2,410 million, up from $2,080 million in Q2 2024, marking a year-over-year increase of 15.9% [2][39] - Adjusted Operating Income (AOI) for Q2 2025 was $668 million, compared to $632 million in Q2 2024, reflecting a growth of 5.7% [2][39] - Net income from continuing operations was $264 million for Q2 2025, down from $399 million in Q2 2024, indicating a decline of 33.8% [2][39] Segment Performance - Tim Hortons reported system-wide sales growth of 3.9% in Q2 2025, with comparable sales growth of 3.4% [10][11] - Burger King experienced a system-wide sales growth of 1.0% in Q2 2025, with comparable sales growth of 1.3% [15][17] - Popeyes saw a system-wide sales growth of 1.6% in Q2 2025, with comparable sales declining by 1.4% [21][22] - Firehouse Subs achieved a notable system-wide sales growth of 6.3% in Q2 2025 [22][23] - The International segment reported a robust system-wide sales growth of 9.8% in Q2 2025 [24][25] Strategic Initiatives - RBI is executing a multi-year "Reclaim the Flame" plan for Burger King, which includes investments of up to $700 million through 2028 for advertising and restaurant enhancements [18][19] - The company completed acquisitions of Carrols Restaurant Group and Popeyes China, establishing a new segment called Restaurant Holdings [3][4] - RBI plans to maintain franchisor dynamics across its segments while refranchising the majority of the Carrols Burger King restaurants [4][5] Future Outlook - RBI expects to achieve over 8% organic Adjusted Operating Income growth and 5%+ net restaurant growth by the end of its algorithm period [31][33] - The company has declared a dividend of $0.62 per common share for Q3 2025, payable on October 7, 2025 [28] - A share repurchase authorization of up to $1 billion has been approved, effective from September 15, 2025 [29]