Dutch Bros(BROS) - 2025 Q1 - Quarterly Report

Financial Performance - Total revenues for Q1 2025 reached $355.152 million, a 29.1% increase from $275.099 million in Q1 2024[25] - Net income attributable to Dutch Bros Inc. for Q1 2025 was $15.353 million, compared to $7.062 million in Q1 2024, representing a 117.4% increase[25] - Company-operated shops generated revenues of $326.421 million in Q1 2025, up from $248.085 million in Q1 2024, reflecting a 31.6% growth[25] - Net income for the three months ended March 31, 2025, was $22,480,000, compared to $16,215,000 for the same period in 2024, representing a year-over-year increase of 38.5%[37] - Total revenues for the three months ended March 31, 2025, were $355.152 million, a 29.1% increase from $275.099 million in the same period of 2024[55] - Basic net income per share attributable to common stockholders increased to $0.13 in Q1 2025 from $0.08 in Q1 2024[101] - Company-operated shops segment revenue reached $326.4 million in Q1 2025, up 31.6% from $248.1 million in Q1 2024[115] - For the three months ended March 31, 2025, net income was $22,480,000, representing a 6.3% margin compared to $16,215,000 and a 5.9% margin for the same period in 2024[194] Assets and Liabilities - Total assets increased to $2.765 billion as of March 31, 2025, compared to $2.501 billion at the end of 2024, marking a 10.6% rise[23] - Current liabilities decreased to $196.745 million from $203.071 million at the end of 2024, a reduction of 3.5%[21] - Total stockholders' equity attributable to Dutch Bros Inc. increased to $599.058 million as of March 31, 2025, from $537.369 million at the end of 2024, a growth of 11.5%[23] - The company’s deferred income tax assets increased to $930.155 million as of March 31, 2025, compared to $742.126 million at the end of 2024, a 25.4% increase[21] - As of March 31, 2025, total long-term debt was $284.229 million, up from $238.009 million as of December 31, 2024, representing a 19.4% increase[76] - Total liabilities related to Tax Receivable Agreements (TRAs) were $799.5 million as of March 31, 2025, up from $627.834 million at the end of 2024[88] Expenses - Selling, general and administrative expenses increased to $58.921 million in Q1 2025, up from $46.194 million in Q1 2024, a rise of 27.5%[25] - Depreciation and amortization expenses for the three months ended March 31, 2025, were $26,430,000, compared to $21,253,000 in 2024, marking an increase of 24.4%[37] - The company incurred equity-based compensation expenses of $4,194,000 in Q1 2025, up from $1,933,000 in Q1 2024, reflecting a significant increase of 117.5%[37] - Total stock-based compensation expense for Q1 2025 was $4.2 million, compared to $1.9 million in Q1 2024, indicating a significant increase in equity-based compensation[93] - Selling, General, and Administrative expenses increased by $12.7 million, or 27.6%, to $58.9 million, primarily due to higher performance-based compensation and professional fees[1] Cash Flow - Cash and cash equivalents rose to $316.441 million, up from $293.354 million at the end of 2024, indicating an 7.9% increase[21] - Net cash provided by operating activities was $36,884,000, a decrease from $41,193,000 in the prior year, indicating a decline of 10.6%[37] - Cash and cash equivalents at the end of the period increased to $316,441,000 from $262,719,000, reflecting a growth of 20.4%[39] Operational Metrics - The company held 100% of the voting interest and 70.5% of the economic interest in Dutch Bros OpCo as of March 31, 2025[44] - As of March 31, 2025, Dutch Bros had 1,012 company-operated and franchised shops, a 15.5% increase from the previous year[124] - Systemwide same shop sales increased by 4.7%, while company-operated same shop sales rose by 6.9%[127] - Labor costs increased by 36.7% to $89.4 million, representing 27.4% of company-operated shops revenues, up 100 basis points from the previous year[138] - The average unit volume (AUV) for company-operated shops was $1,950, compared to $1,915 in the previous year[127] Future Outlook - The company expects to fund its capital requirements through operating cash flows and additional proceeds from its 2022 Credit Facility, which was amended to increase borrowing capacity by $150 million[1] - The company plans to continue expanding by opening additional company-operated shops and potentially reacquiring existing franchised shops[1] - The company has taken measures to gradually increase menu prices to offset inflationary pressures and maintain profitability[198] - The company anticipates that ongoing inflationary pressures, particularly in commodity and supply costs, will continue to affect operating results in the foreseeable future[198] Risks and Challenges - The company has experienced upward pressure on labor costs due to minimum wage increases in several states, including California, which will take effect in April 2024[196] - There is a potential risk of allergic reactions to products due to unidentified allergens, which could harm the company's business and operations[216] - The company has no control over "secret menu" style drinks created by customers, which may negatively impact public perception and health perceptions[218]