markdown [Executive Summary & Business Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Highlights) The ONE Group reported strong Q2 2025 revenue growth, driven by Benihana integration, alongside strategic expansion [Q2 2025 Performance Overview](index=1&type=section&id=Q2%202025%20Performance%20Overview) The ONE Group reported strong top-line growth in Q2 2025, with total GAAP revenues increasing 20.2% to $207.4 million, despite a 4.1% decrease in consolidated comparable sales and a GAAP net loss of $10.1 million | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----------------------------------- | :------ | :------ | :----------- | | Total GAAP revenues | $207.4 million | $172.5 million | +20.2% | | Consolidated comparable sales | -4.1% | N/A | -4.1 pp | | Operating income | $0.7 million | $1.1 million | -36.4% | | Restaurant EBITDA | $31.9 million | $29.6 million | +8.0% | | GAAP net loss | $10.1 million | $7.3 million | +38.4% (increased loss) | | Adjusted EBITDA attributable to The ONE Group Hospitality, Inc. | $23.4 million | $21.8 million | +7.3% | - Operating income and GAAP net loss were impacted by **$5.6 million** of lease termination and exit expenses related to the exit of five grill locations[6](index=6&type=chunk) [CEO Commentary & Strategic Initiatives](index=1&type=section&id=CEO%20Commentary%20%26%20Strategic%20Initiatives) CEO Emanuel Hilario expressed satisfaction with meeting expectations and achieving 20% top-line growth, attributing it to successful Benihana acquisition integration and strategic execution - Strong top-line growth of **20%** driven by the successful integration of the Benihana acquisition and continued execution of key strategic initiatives[3](index=3&type=chunk) - Benihana delivered positive same store sales and STK achieved positive traffic for the second and third consecutive quarters, respectively, indicating consumer engagement and brand strength[3](index=3&type=chunk) - Focus on accelerating same store sales growth and pursuing asset-light and low-cost expansion strategies to enhance capital efficiency and balance sheet strength[4](index=4&type=chunk) - On track to open **five to seven new venues** in 2025 while optimizing operations across the expanded portfolio[4](index=4&type=chunk) [Restaurant Development & Expansion](index=1&type=section&id=Restaurant%20Development%20%26%20Expansion) The company plans to open five to seven new venues in 2025, having already opened several locations and with two company-owned restaurants currently under construction - Company plans to open **five to seven new venues** in 2025[5](index=5&type=chunk) - Opened Owned Benihana restaurant in San Mateo, California (March 2025) - Opened Owned STK restaurant in Topanga, California (April 2025) - Opened Owned STK restaurant in Los Angeles, California (May 2025 - relocation) - Opened Franchised Benihana Express restaurant in Miami, Florida (June 2025) - One Company-owned Benihana restaurant under construction in Seattle, Washington - One Company-owned Kona Grill restaurant under construction in San Antonio, Texas (relocation) [Liquidity & Share Repurchase Program](index=2&type=section&id=Liquidity%20%26%20Share%20Repurchase%20Program) As of June 29, 2025, the company held $15.1 million in cash and short-term credit card receivables and had $33.6 million available under its revolving credit facility, having repurchased 0.2 million shares for $0.6 million in Q2 2025 | Metric (as of June 29, 2025) | Amount (in millions) | | :----------------------------------- | :----- | | Cash and short-term credit card receivables | $15.1 | | Available under revolving credit facility | $33.6 | - Board of Directors authorized a **$5 million** share repurchase program in March 2024[8](index=8&type=chunk) - During Q2 2025, the Company purchased **0.2 million shares** for an aggregate consideration of **$0.6 million**[8](index=8&type=chunk) [Financial Results](index=6&type=section&id=Financial%20Results) Q2 2025 financial results show increased revenues but a wider net loss, with decreased total assets and stockholders' equity [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company's Q2 2025 financial statements show a significant increase in total revenues to $207.4 million, up from $172.5 million in Q2 2024, but operating income decreased and net loss widened to $10.1 million [Revenue and Operating Expenses](index=6&type=section&id=Revenue%20and%20Operating%20Expenses) Q2 2025 owned restaurant net revenue increased by 20.6% to $203.9 million, with total owned operating expenses up 23.7% | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (YoY) | | :----------------------------------- | :-------------------- | :-------------------- | :----------- | | Owned restaurant net revenue | $203.9 | $169.0 | +20.6% | | Management, license, franchise and incentive fee revenue | $3.5 | $3.5 | -0.03% | | **Total revenues** | **$207.4** | **$172.5** | **+20.2%** | | Owned restaurant cost of sales | $43.2 | $35.9 | +20.4% | | Owned restaurant operating expenses | $129.5 | $103.8 | +24.8% | | Total owned operating expenses | $172.7 | $139.6 | +23.7% | | General and administrative | $11.7 | $10.6 | +9.7% | | Lease termination and exit expenses | $5.6 | $0.3 | +1735% | [Profitability and Net Loss](index=6&type=section&id=Profitability%20and%20Net%20Loss) Operating income decreased by 36.9% to $0.7 million, and net loss widened to $10.1 million due to higher interest expense | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (YoY) | | :----------------------------------- | :-------------------- | :-------------------- | :----------- | | Operating income | $0.7 | $1.1 | -36.9% | | Interest expense, net | $10.3 | $7.9 | +30.9% | | Loss on early debt extinguishment | $0.0 | $4.1 | -100% | | Net loss attributable to The ONE Group Hospitality, Inc. | $(10.1) | $(7.3) | +37.6% (increased loss) | | Basic Net loss per common share | $(0.59) | $(0.38) | +55.3% (increased loss) | [Statements of Operations as Percentage of Revenue](index=7&type=section&id=Statements%20of%20Operations%20as%20Percentage%20of%20Revenue) Owned restaurant operating expenses as a percentage of net revenue increased to 63.5% in Q2 2025 | Metric (as % of Total Revenues) | Q2 2025 | Q2 2024 | | :----------------------------------- | :------ | :------ | | Owned restaurant net revenue | 98.3% | 98.0% | | Management, license, franchise and incentive fee revenue | 1.7% | 2.0% | | Owned restaurant cost of sales (as % of owned restaurant net revenue) | 21.2% | 21.2% | | Owned restaurant operating expenses (as % of owned restaurant net revenue) | 63.5% | 61.4% | | Total owned operating expenses (as % of owned restaurant net revenue) | 84.7% | 82.6% | | General and administrative | 5.6% | 6.2% | | Depreciation and amortization | 5.2% | 4.7% | | Lease termination and exit expenses | 2.7% | 0.2% | | Operating income | 0.3% | 0.6% | | Net loss attributable to The ONE Group Hospitality, Inc. | (4.9)% | (4.3)% | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 29, 2025, total assets decreased to $935.7 million from $960.1 million, while total liabilities also decreased, and stockholders' equity saw a notable reduction to $23.0 million | Metric | June 29, 2025 (in millions) | December 31, 2024 (in millions) | Change (in millions) | | :----------------------------------- | :---------------------------- | :---------------------------- | :------------------- | | Cash and cash equivalents | $4.7 | $27.6 | -$22.9 | | Total current assets | $42.7 | $69.3 | -$26.6 | | Total assets | $935.7 | $960.1 | -$24.4 | | Total current liabilities | $121.1 | $131.4 | -$10.3 | | Long-term debt, net | $327.5 | $328.1 | -$0.6 | | Total liabilities | $742.0 | $758.7 | -$16.7 | | Series A preferred stock | $173.8 | $158.1 | +$15.7 | | Total stockholders' equity | $23.0 | $45.9 | -$22.8 | [Non-GAAP Financial Measures & Reconciliations](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section defines and reconciles key non-GAAP financial measures, including Adjusted EBITDA and Adjusted Net Income, for performance insights [Non-GAAP Definitions](index=4&type=section&id=Non-GAAP%20Definitions) The company uses several non-GAAP financial measures, including Total food and beverage sales at owned and managed units, Adjusted EBITDA, and Adjusted Net Income/(Loss), to provide additional insights into operating performance - Non-GAAP financial measures used include total food and beverage sales at owned and managed units, Adjusted EBITDA, Restaurant Operating Profit, Restaurant EBITDA, adjusted net income, and adjusted net income / (loss) per share[14](index=14&type=chunk)[15](index=15&type=chunk)[28](index=28&type=chunk) - These measures exclude items management does not consider in the evaluation of its ongoing core operating performance, such as non-cash rent, non-recurring gains and losses, stock-based compensation, transaction and exit costs, transition and integration expenses, and lease termination and exit expenses[15](index=15&type=chunk)[18](index=18&type=chunk) - Starting in Q3 2024, pre-opening expenses are no longer deducted from Adjusted EBITDA[15](index=15&type=chunk)[18](index=18&type=chunk) [Total Food and Beverage Sales at Owned and Managed Units](index=9&type=section&id=Total%20Food%20and%20Beverage%20Sales%20at%20Owned%20and%20Managed%20Units) This non-GAAP measure represents total revenue from owned operations plus revenue from managed locations, providing a comprehensive view of sales associated with the company's brands and hospitality services | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (YoY) | | :----------------------------------- | :-------------------- | :-------------------- | :----------- | | GAAP revenues | $207.4 | $172.5 | +20.2% | | Food and beverage sales from managed units | $31.2 | $32.1 | -2.8% | | **Total food and beverage sales at owned and managed units** | **$235.1** | **$201.1** | **+16.9%** | [Same Store Sales](index=9&type=section&id=Same%20Store%20Sales) Consolidated comparable sales decreased by 4.1% in Q2 2025, with Benihana Owned Restaurants showing positive growth while US STK Total Restaurants and Grill Concept Owned Restaurants experienced declines | Segment | Q2 2025 vs. 2024 | Q2 2024 vs. 2023 | | :-------------------------- | :--------------- | :--------------- | | US STK Owned Restaurants | (4.9)% | (11.9)% | | US STK Managed Restaurants | (9.5)% | (7.4)% | | US STK Total Restaurants | (6.0)% | (10.6)% | | Benihana Owned Restaurants | 0.4% | (1.0)% | | Grill Concept Owned Restaurants | (14.6)% | (13.0)% | | **Combined Same Store Sales** | **(4.1)%** | **(7.0)%** | [Adjusted EBITDA](index=10&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA attributable to The ONE Group Hospitality, Inc. increased by 7.3% to $23.4 million in Q2 2025, excluding various non-cash and non-recurring items for a clearer view of operational performance | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (YoY) | | :----------------------------------- | :-------------------- | :-------------------- | :----------- | | Net loss attributable to The ONE Group Hospitality, Inc. | $(10.1) | $(7.3) | +37.6% (increased loss) | | EBITDA | $11.5 | $4.9 | +134.1% | | Adjusted EBITDA | $23.2 | $21.7 | +6.9% | | **Adjusted EBITDA attributable to The ONE Group Hospitality, Inc.** | **$23.4** | **$21.8** | **+7.3%** | [Restaurant Operating Profit and Restaurant EBITDA](index=10&type=section&id=Restaurant%20Operating%20Profit%20and%20Restaurant%20EBITDA) Restaurant Operating Profit increased to $31.2 million and Restaurant EBITDA to $31.9 million in Q2 2025, though as a percentage of owned restaurant net revenue, both decreased | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (YoY) | | :----------------------------------- | :-------------------- | :-------------------- | :----------- | | Restaurant Operating Profit | $31.2 | $29.4 | +6.3% | | Restaurant Operating Profit as a percentage of owned restaurant net revenue | 15.3% | 17.4% | -2.1 pp | | Restaurant EBITDA | $31.9 | $29.6 | +7.9% | | Restaurant EBITDA as a percentage of owned restaurant net revenue | 15.7% | 17.5% | -1.8 pp | | Segment (Company owned) | Q2 2025 Restaurant Operating Profit (in millions) | Q2 2024 Restaurant Operating Profit (in millions) | Q2 2025 Restaurant EBITDA (in millions) | Q2 2024 Restaurant EBITDA (in millions) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------------------------- | :-------------------------------------- | | STK | $9.1 | $8.3 | $8.1 | $8.9 | | Benihana | $16.2 | $20.8 | $21.3 | $16.5 | | Core Grill Concepts | $4.2 | $2.3 | $2.7 | $4.3 | | Non-core Grill Concepts | $(0.2) | $(0.1) | $(0.3) | $(0.3) | [Adjusted Net Income / (Loss)](index=11&type=section&id=Adjusted%20Net%20Income%20%2F%20(Loss)) Adjusted net income (non-GAAP) for Q2 2025 decreased to $1.7 million from $6.3 million in Q2 2024, with adjusted net income per share also declining | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (YoY) | | :----------------------------------- | :-------------------- | :-------------------- | :----------- | | Net income (loss) available to common stockholders (GAAP) | $(18.2) | $(11.9) | +53.5% (increased loss) | | **Adjusted net income (loss) (non-GAAP)** | **$1.7** | **$6.3** | **-73.5%** | | Adjusted net income (loss) per share: Basic | $0.05 | $0.20 | -75% | | Adjusted net income (loss) per share: Diluted | $0.05 | $0.19 | -73.7% | [2025 Financial Targets & Outlook](index=2&type=section&id=2025%20Financial%20Targets%20%26%20Outlook) The company provided guidance for Q3 2025 and the full year 2025, projecting total GAAP revenues of $835 to $870 million and consolidated Adjusted EBITDA between $95 to $115 million | Metric | Q3 2025 Guidance (in millions) | 2025 Guidance (Full Year, in millions) | | :----------------------------------- | :----------------------------- | :------------------------------------- | | Total GAAP revenues | $190 to $195 | $835 to $870 | | Consolidated comparable sales | -4% to -2% | -3% to 1% | | Managed, license and franchise fee revenues | $3 to $4 | $15 to $16 | | Total owned operating expenses as a percentage of owned restaurant net revenue | Approx. 86% | 83.5% to 82.2% | | Consolidated total G&A, excluding stock-based compensation | Approx $11 | Approx. $47 | | Consolidated Adjusted EBITDA | $15 to $18 | $95 to $115 | | Consolidated restaurant pre-opening expenses | $1 to $2 | $7 to $8 | | Consolidated effective income tax rate | | Approx. 7.5% | | Consolidated total capital expenditures, net of allowances received by landlords | | $45 to $50 | | Consolidated number of new system-wide venues | None | 5-7 new venues | [Company Information & Disclosures](index=2&type=section&id=Company%20Information%20%26%20Disclosures) This section provides company overview, conference call details, forward-looking statement cautions, and investor contact information [About The ONE Group](index=4&type=section&id=About%20The%20ONE%20Group) The ONE Group Hospitality, Inc. is an international restaurant company focused on "Vibe Dining," developing and operating upscale restaurants and providing hospitality management services - The ONE Group Hospitality, Inc. is an international restaurant company that develops and operates upscale and polished casual, high-energy restaurants and lounges and provides hospitality management services for hotels, casinos and other high-end venues[12](index=12&type=chunk) - The ONE Group's focus is to be the global leader in Vibe Dining[12](index=12&type=chunk) - STK: Modern American steakhouse concept - Benihana: Interactive dining destination with skilled chefs - Benihana Express: Small footprint casual concept without teppanyaki tables or bar - Kona Grill: Polished casual, bar-centric grill concept - RA Sushi: Japanese cuisine concept with a fun-filled, bar-forward atmosphere - Salt Water Social: Features an array of signature and unique fresh seafood items - ONE Hospitality: Food and beverage hospitality services business for high-end hotels and casinos [Conference Call and Webcast](index=2&type=section&id=Conference%20Call%20and%20Webcast) The company hosted a conference call and webcast on August 5, 2025, at 4:30 PM Eastern Time to discuss financial results, with a replay available until August 19, 2025 - Emanuel "Manny" Hilario, President and CEO, and Tyler Loy, CFO, hosted a conference call and webcast on August 5, 2025, at 4:30 PM Eastern Time[11](index=11&type=chunk) - A replay was available until Tuesday, August 19, 2025, accessible by phone or from the Investor Relations tab of The ONE Group's website[11](index=11&type=chunk)[12](index=12&type=chunk) [Cautionary Statement on Forward-Looking Statements](index=4&type=section&id=Cautionary%20Statement%20on%20Forward-Looking%20Statements) The press release contains forward-looking statements regarding future events like restaurant openings and financial targets, subject to risks and uncertainties, and investors are cautioned not to place undue reliance on them - The press release includes "forward-looking statements" regarding the impact of the Benihana Inc. acquisition, restaurant openings, and 2025 financial targets[19](index=19&type=chunk) - These statements are subject to a number of factors that could cause actual results or outcomes to differ materially, including integration challenges, ability to open new restaurants, economic downturns, and changes in regulations[19](index=19&type=chunk) - Investors are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made, and the company undertakes no obligation to update or revise them[20](index=20&type=chunk) [Contact Information](index=5&type=section&id=Contact%20Information) Contact information for investor relations and media inquiries is provided through ICR - Investors: Michelle Michalski or Raphael Gross at ICR, (646) 277-1224, Michelle.Michalski@icrinc.com - Media: Seth Grugle at ICR, (646) 277-1272, seth.grugle@icrinc.com
The ONE Group Hospitality(STKS) - 2025 Q2 - Quarterly Results