Financial Performance and Key Metrics - In Q1 2025, net revenue was $375.2 million, reflecting a decline of 1% in organic revenue due to consumer softness in a challenging macro environment [22][27] - Adjusted EBITDA was $24 million with a margin of 6.4%, impacted by the sale of Insomnia Cookies and costs associated with U.S. nationwide expansion [22][26] - Adjusted earnings per share were negative $0.05, a decline from the prior year driven by lower revenue and EBITDA [26] Business Line Performance - U.S. segment organic revenue declined by 2.6%, with adjusted EBITDA dropping to $15.9 million due to softness in the retail segment and operational inefficiencies related to a cybersecurity incident [23][24] - International markets saw organic revenue growth of 1.5%, led by strong results in Canada, while the Market Development segment grew organic revenue by 2.7% [24][25] Market Data and Key Metrics - Average revenue per door per week (APD) was $587, down from the previous year, reflecting a shift in customer mix due to the introduction of McDonald's [24] - Points of Access grew by 6.3%, indicating expansion efforts in Australia and Canada [24] Company Strategy and Industry Competition - The company is focused on profitable U.S. expansion and capital-light international franchise growth, aiming for 100,000 points of access [6][17] - A strategic shift includes prioritizing debt reduction, generating positive cash flow, and pursuing only profitable growth based on sustainable revenue streams [6][28] - The partnership with McDonald's is being reassessed to ensure a profitable business model before further expansion [12][13] Management Commentary on Operating Environment and Future Outlook - Management acknowledged the challenging macro environment and the need to focus on profitable growth while simplifying operations [6][31] - The company has withdrawn its prior full-year outlook due to macroeconomic softness and uncertainty around the McDonald's partnership, but expects Q2 revenue between $370 million and $385 million [30][31] Other Important Information - The decision to discontinue the quarterly dividend was made to allocate capital towards debt reduction [28] - The company is actively pursuing refranchising opportunities in international markets to strengthen its balance sheet [17][28] Q&A Session Summary Question: How is the company thinking about CapEx given the current changes? - The company is becoming more disciplined in capital allocation, focusing on strengthening the balance sheet and investing in high-return projects [34][35] Question: Was the decision to pause McDonald's expansion made by the company or McDonald's? - The decision was made collaboratively with McDonald's, focusing on ensuring profitable growth before further expansion [37][38] Question: How aggressive will the company be in pruning underperforming locations? - The company could exit 5% to 10% of doors in the U.S. network as part of its focus on driving profitable growth [40][41] Question: What is the process for refranchising international markets? - The company is looking for the right partners to grow the business in a capital-efficient way, with proceeds used to pay down debt [42][43] Question: Was the $5 million inefficiency related to cybersecurity expected? - This was anticipated in the guidance, and the company is now operating more efficiently post-incident [53] Question: What is the status of sales per hub being down 2%? - The decline is attributed to consumer softness in retail channels and a planned reduction in discount days [56][57] Question: Was the pause in McDonald's expansion a quick decision? - The company believes in making decisive actions to ensure profitable growth, working closely with McDonald's to improve sales and simplify operations [62][63]