First Watch Restaurant (FWRG) - 2025 Q2 - Quarterly Results

Q2 2025 Financial and Operational Highlights This section provides an overview of the company's financial performance and operational achievements for the second quarter of fiscal year 2025, including revenue growth, profitability, and expansion Second Quarter 2025 Performance The company reported a 19.1% increase in total revenues to $307.9 million and a 3.5% growth in same-restaurant sales for Q2 2025, though net income decreased significantly to $2.1 million from $8.9 million year-over-year, and Adjusted EBITDA also declined to $30.4 million, while expanding its footprint by opening 17 new system-wide restaurants, reaching a milestone of 600 total locations - CEO Chris Tomasso highlighted three consecutive quarters of sequential improvement in same-restaurant traffic and sales growth, expressing confidence in the company's momentum for the remainder of 2025[4] Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $307.9M | $258.6M | +19.1% | | System-wide Sales | $346.2M | $299.0M | +15.8% | | Same-Restaurant Sales Growth | 3.5% | N/A | - | | Same-Restaurant Traffic Growth | 2.0% | N/A | - | | Net Income | $2.1M | $8.9M | -76.4% | | Adjusted EBITDA* | $30.4M | $35.3M | -13.9% | | Restaurant Level Operating Profit Margin* | 18.6% | 21.9% | -3.3pp | - The company opened 17 new system-wide restaurants across 8 states, reaching a total of 600 restaurants (531 company-owned and 69 franchise-owned)[2][6] Fiscal Year 2025 Outlook First Watch raised its full-year 2025 Adjusted EBITDA guidance to a range of $119.0 million to $123.0 million, while confirming its outlook for total revenue growth of approximately 20.0%, positive low-single-digit same-restaurant sales growth, and the opening of 59 to 64 new system-wide restaurants Updated & Confirmed FY 2025 Guidance | Guidance Metric | 2025 Outlook | Status | | :--- | :--- | :--- | | Adjusted EBITDA | $119.0M - $123.0M | Raised | | Total Revenue Growth | ~20.0% | Confirmed | | Same-Restaurant Sales Growth | Positive low-single digits | Confirmed | | Same-Restaurant Traffic Growth | Flat-to-slightly positive | Confirmed | | New System-Wide Restaurants (Net) | 59 to 64 | Confirmed | | Capital Expenditures | $148.0M - $152.0M | Confirmed | | Blended Tax Rate | 35.0% - 40.0% | Confirmed | - The guidance for total revenue growth and Adjusted EBITDA includes the net impact of completed acquisitions, contributing approximately 4% to revenue growth and $7 million to Adjusted EBITDA[7][8] Financial Statements and Non-GAAP Reconciliations This section presents consolidated financial statements and reconciles non-GAAP measures, offering a comprehensive view of performance Consolidated Statements of Operations The Consolidated Statement of Operations for Q2 2025 shows total revenues of $307.9 million, up from $258.6 million in Q2 2024, but increased operating costs, particularly in labor and food, led to a decrease in income from operations to $7.3 million from $16.4 million, resulting in a net income of $2.1 million, or $0.03 per diluted share Q2 2025 vs Q2 2024 Statement of Operations (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $307,887 | $258,561 | | Total Operating Costs & Expenses | $300,574 | $242,114 | | Income from Operations | $7,313 | $16,447 | | Net Income | $2,106 | $8,900 | | Diluted EPS | $0.03 | $0.14 | YTD 2025 vs YTD 2024 Statement of Operations (in thousands) | Line Item | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | Total Revenues | $590,127 | $501,010 | | Total Operating Costs & Expenses | $581,701 | $472,277 | | Income from Operations | $8,426 | $28,733 | | Net Income | $1,277 | $16,114 | | Diluted EPS | $0.02 | $0.26 | Non-GAAP Financial Measures The company utilizes non-GAAP measures such as Adjusted EBITDA and Restaurant Level Operating Profit to supplement its GAAP financial statements, believing these metrics provide better visibility into core operating performance by excluding non-recurring items or those not indicative of ongoing operations, and are used for internal evaluation and decision-making - Management uses non-GAAP measures to provide investors with additional visibility, facilitate analysis of ongoing business operations, and identify operational trends[21] - Adjusted EBITDA is used internally to evaluate management's performance for incentive compensation and to benchmark against competitors[22] - Restaurant Level Operating Profit is used to evaluate the performance and profitability of each restaurant, informing decisions on future spending and operations[29] Reconciliation of Net Income to Adjusted EBITDA This section provides a detailed reconciliation from the GAAP measure of Net Income to the non-GAAP measure of Adjusted EBITDA, where for Q2 2025, Net Income of $2.1 million was adjusted for items like depreciation ($18.1M), interest ($4.0M), and taxes ($1.5M), among others, to arrive at an Adjusted EBITDA of $30.4 million Reconciliation to Adjusted EBITDA (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income | $2,106 | $8,900 | | Depreciation and amortization | $18,136 | $14,536 | | Interest expense | $4,003 | $3,381 | | Income tax expense | $1,470 | $4,879 | | Stock-based compensation | $2,790 | $2,452 | | Other Adjustments | $1,874 | $1,178 | | Adjusted EBITDA | $30,379 | $35,325 | Reconciliation of Income from Operations to Restaurant Level Operating Profit This section reconciles the GAAP measure of Income from Operations to the non-GAAP measure of Restaurant Level Operating Profit, where for Q2 2025, Income from Operations of $7.3 million was adjusted for items such as General & Administrative expenses ($33.2M) and depreciation ($18.1M) to calculate a Restaurant Level Operating Profit of $56.8 million Reconciliation to Restaurant Level Operating Profit (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Income from operations | $7,313 | $16,447 | | Less: Franchise revenues | ($2,904) | ($3,104) | | Add: General and administrative | $33,185 | $27,189 | | Add: Depreciation and amortization | $18,136 | $14,536 | | Add: Other Adjustments | $1,046 | $878 | | Restaurant level operating profit | $56,776 | $55,946 | Supporting Information This section provides essential context, including key metric definitions, forward-looking statements, and conference call details Definitions of Key Metrics This section defines key performance indicators used throughout the report, clarifying terms such as "System-wide sales," "Same-restaurant sales growth" (based on restaurants open for 18+ months), "Same-restaurant traffic growth," and the non-GAAP measures "Adjusted EBITDA" and "Restaurant level operating profit" - Same-restaurant sales growth is defined as the percentage change in year-over-year sales for company-owned restaurants open for 18 months or longer The comparable base for Q2 2025 consisted of 382 restaurants[11] - Same-restaurant traffic growth measures the percentage change in customer counts compared to the prior year for the same comparable restaurant base[12] - Non-GAAP definitions are provided for Adjusted EBITDA, Restaurant level operating profit, and their respective margins[13][14][15] Forward-Looking Statements This section contains a standard safe harbor statement, warning that the press release includes forward-looking statements subject to risks and uncertainties, and lists numerous potential risk factors, such as changes in consumer preferences, economic conditions, and competition, that could cause actual results to differ from projections - The report contains forward-looking statements that are subject to known and unknown risks and uncertainties[18] - Key risk factors include vulnerability to changes in consumer preferences, economic conditions like inflation, inability to successfully open new restaurants, changes in food costs, and competition[18] Conference Call and Webcast Information The company announced it will host a conference call and webcast on August 5, 2025, at 8:00 AM ET to discuss the Q2 2025 financial results, with the call hosted by CEO Chris Tomasso and CFO Mel Hope - A conference call and webcast to discuss Q2 2025 financial results will be hosted by CEO Chris Tomasso and CFO Mel Hope on August 5, 2025, at 8:00 AM ET[9]