Core Insights - Dutch Bros is a founder-led company that has successfully turned its passion into profit, positioning itself as a notable growth story in the beverage industry [1][2] - The long-term investment thesis is built on three main pillars: a unique brand identity, significant expansion potential, and improving profitability [2][16] Brand Identity - Dutch Bros offers more than just coffee; it promotes energy, friendliness, and a sense of community, distinguishing itself in a competitive market [3] - Over 80% of sales come from cold and energy drinks, making the brand relevant throughout the day, not limited to morning coffee [4] - The company emphasizes a people-first culture, with "broistas" trained to create connections with customers, enhancing brand loyalty [5][6] Growth Potential - Dutch Bros operates approximately 1,043 stores, with a target market of over 7,000 locations, indicating a substantial growth runway [8] - The drive-thru-only model provides cost advantages, with lower build-out costs and higher throughput, aligning with modern consumer preferences for convenience [9] - The company aims for a 45% cash-on-cash return on new stores, highlighting attractive investment returns [9] Financial Performance - In Q2 2025, revenue grew by 28% year-over-year, and same-store sales increased by 6.1%, reflecting strong financial health as the company expands [10] - Shop-level contribution margins reached approximately 31%, showing improvement despite inflationary pressures [13] - Dutch Bros has become free-cash-flow-positive in 2024, allowing it to self-fund new store openings, which is a critical milestone for sustainable growth [14][15] Investment Outlook - The combination of a unique brand, significant growth opportunities, and improving profitability positions Dutch Bros as a compelling investment in the coffee chain sector [17]

Core Insights - Dutch Bros is an emerging consumer brand in America with a strong growth narrative, characterized by a beloved brand, significant expansion potential, and an experienced management team [1] - The company faces challenges in scaling its operations while maintaining its unique culture and customer experience [2][3] - Investors should monitor key performance indicators such as same-store sales growth and customer satisfaction as the company expands [3] Group 1: Execution Risk - Dutch Bros has built its success on a service-oriented culture that may be difficult to maintain across a rapidly growing number of locations, currently at 1,043 [2] - The company must navigate new demographics and operational challenges as it expands, risking dilution of its brand authenticity [2] - Any decline in execution quality, such as slower service or inconsistent product quality, could negatively impact the brand's reputation [3] Group 2: Economic Sensitivity - Approximately 80% of Dutch Bros' sales come from cold drinks and energy beverages, making it vulnerable to economic downturns as consumers may cut back on discretionary spending [5][6] - The limited food offerings restrict opportunities for increasing average ticket size compared to competitors with broader menus [7] - The company is testing new food products to complement its beverage offerings, but must proceed cautiously to avoid operational inefficiencies [7] Group 3: Financial Considerations - Dutch Bros is a capital-intensive business, with an average upfront investment of $1.7 million per new store and cash payback periods typically exceeding two years [9] - Shop-level contribution margins are around 31%, leaving little room for error amid rising labor and commodity costs [10] - The company's net income was 9.2% in Q2 2025, indicating that even a modest increase in costs could significantly impact profitability [11] Group 4: Growth Potential - Dutch Bros became free-cash-flow-positive in 2024, allowing it to self-fund most new store openings, which is a positive sign for investors [13] - The company must balance its growth ambitions with financial discipline to mitigate balance sheet risks associated with rapid expansion [13] - If management can maintain brand integrity while achieving strong returns on new locations, Dutch Bros has the potential to become a long-term growth stock [15]

Core Insights - Dutch Bros Inc. is a rapidly expanding drive-thru coffee chain competing with major players like Starbucks and Dunkin' [1] - The company has consistently exceeded earnings expectations for 11 consecutive quarters, indicating strong operational performance [2][5] - Morgan Stanley analyst Brian Harbour set a price target of $84 for BROS, suggesting a potential upside of approximately 56.04% from its current trading price of $53.83 [2][5] Financial Performance - As of the latest report, BROS was trading at $53.61, reflecting a decrease of 3.51% or $1.95 [3] - The stock has shown significant volatility, with a yearly high of $86.88 and a low of $43.50 [3][5] - The trading volume for BROS is 3,812,116 shares, indicating active investor interest [4] Market Position - Dutch Bros has a market capitalization of approximately $8.68 billion, highlighting its substantial presence in the market [4]

Core Insights - Dutch Bros Inc. reported strong third-quarter 2025 results, with earnings and revenues exceeding the Zacks Consensus Estimate, reflecting a year-over-year increase in both metrics [1][4][9] Financial Performance - Adjusted earnings per share (EPS) for Q3 2025 were 19 cents, surpassing the consensus estimate of 17 cents, marking an 18.6% year-over-year increase [4] - Total revenues reached $423.6 million, exceeding the consensus mark of $411.1 million, and showing a 25.2% year-over-year growth [4] - Company-operated shop revenues were $392.8 million, up 27.4% year over year, while franchising and other revenues amounted to $30.8 million, increasing by 2.8% year over year [5] Sales and Transactions - Systemwide same-shop sales rose by 5.7%, compared to 2.7% in the prior-year quarter, while systemwide same-shop transactions increased by 4.7%, up from 0.8% in the same period last year [6] - Company-operated same-shop sales advanced 7.4%, compared to 4% in the year-ago quarter, with transactions improving by 6.8%, up from 2.4% in the prior-year period [6] Operational Highlights - Total costs and expenses for the quarter were $382.1 million, reflecting a 25% year-over-year increase [7] - Adjusted selling, general, and administrative expenses as a percentage of revenues decreased to 13.6%, down 130 basis points from 14.9% in the prior-year quarter [7] - Adjusted net income totaled $33.5 million, representing a 20.9% year-over-year increase [7] Balance Sheet - As of September 30, 2025, cash and cash equivalents were $267.2 million, down from $293.3 million as of December 31, 2024 [8] - Long-term debt at the end of Q3 totaled $196 million, compared to $219.8 million reported as of December 31, 2024 [8] Growth Strategy and Outlook - The company opened 38 new shops in Q3 2025, with a total of 160 system shop openings targeted for the year, and plans to open approximately 175 total system shops in 2026 [10] - Management raised its full-year revenue outlook to a range of $1.61-$1.615 billion, up from the previous expectation of $1.59-$1.6 billion, with same-shop sales growth now expected to be around 5% [11]

Core Insights - Dutch Bros reported revenue of $423.58 million for the quarter ended September 2025, reflecting a 25.2% increase year-over-year and a surprise of +3.03% over the Zacks Consensus Estimate of $411.13 million [1] - The earnings per share (EPS) for the quarter was $0.19, up from $0.16 in the same quarter last year, with an EPS surprise of +11.76% compared to the consensus estimate of $0.17 [1] Financial Performance Metrics - Dutch Bros' shares have returned +15.8% over the past month, outperforming the Zacks S&P 500 composite's +1% change, and the stock currently holds a Zacks Rank 2 (Buy) [3] - The total shop count at the end of the period was 1,081, slightly below the five-analyst average estimate of 1,084 [4] - Company-operated shops generated revenues of $392.83 million, exceeding the average estimate of $378.56 million by five analysts, representing a +27.4% change year-over-year [4] - System same shop sales and transactions increased by 5.7%, surpassing the average estimate of 4.2% by four analysts [4] - Franchising and other revenues were reported at $30.75 million, below the average estimate of $32.68 million, but still reflecting a +2.8% change compared to the year-ago quarter [4]

Financial Performance - Total revenues for Q3 2025 reached $423.6 million, a 25.2% increase from $338.2 million in Q3 2024[25] - Net income for Q3 2025 was $27.3 million, compared to $21.7 million in Q3 2024, reflecting a 25.5% year-over-year growth[25] - Company-operated shops generated revenues of $392.8 million in Q3 2025, up from $308.3 million in Q3 2024, marking a 27.4% increase[25] - The company reported a basic net income per share of $0.14 for Q3 2025, compared to $0.11 for Q3 2024, reflecting a 27.3% increase[25] - The net income for the nine months ended September 30, 2025, was $88,120,000, compared to $58,472,000 for the same period in the previous year, indicating a year-over-year increase of approximately 50.8%[34] - Net income for the three months ended September 30, 2025, was $27.3 million, compared to $21.7 million for the same period in 2024, representing a 25.5% increase[106] - Diluted net income per share attributable to common stockholders for the nine months ended September 30, 2025, was $0.47, compared to $0.32 in 2024, representing a 46.9% increase[108] Revenue and Growth - Total revenues for the three months ended September 30, 2025, were $423.6 million, a 25.3% increase from $338.2 million in the same period of 2024[63] - Company-operated shops generated revenues of $392.8 million for the three months ended September 30, 2025, compared to $308.3 million in 2024, reflecting a 27.4% year-over-year growth[63] - The company-operated shops segment generated revenues of $1.1 billion for the nine months ended September 30, 2025, compared to $851.6 million in 2024, a 29.1% increase[125] - Total segment contribution for the nine months ended September 30, 2025, was $398.1 million, up from $318.8 million in 2024, reflecting a 24.9% increase[125] Assets and Liabilities - Total assets increased to $2.92 billion as of September 30, 2025, compared to $2.50 billion at the end of 2024, representing a 16.8% growth[21] - Total liabilities rose to $2.06 billion as of September 30, 2025, up from $1.74 billion at the end of 2024, indicating a 18.5% increase[21] - As of September 30, 2025, Dutch Bros Inc. reported total stockholders' equity of $865,029,000, an increase from $763,865,000 as of December 31, 2024, representing a growth of approximately 13.3%[34] Cash and Cash Equivalents - Cash and cash equivalents decreased to $267.2 million as of September 30, 2025, down from $293.4 million at the end of 2024, a decline of 8.9%[21] - Cash and cash equivalents at the end of the period for September 30, 2025, were $267,195,000, compared to $281,134,000 for the same period in 2024[42] Expenses - The cost of sales for Q3 2025 was $316.8 million, up from $248.2 million in Q3 2024, representing a 27.7% increase[25] - Selling, general, and administrative expenses increased by 13.5% for the three months ended September 30, 2025, amounting to $65,289,000[165] - The company reported a depreciation and amortization expense of $83,389,000 for the nine months ended September 30, 2025, compared to $67,484,000 for the same period in 2024[42] - Labor costs for company-operated shops were $108.1 million, representing 27.5% of revenues for the three months ended September 30, 2025[141] Tax and Compliance - The income tax expense for the three months ended September 30, 2025, was $7,661,000, compared to $4,698,000 for the same period in 2024, reflecting an effective tax rate increase to 21.9% from 17.8%[91] - The effective tax rate for the nine months ended September 30, 2025, was 15.7%, down from 22.4% in the same period of 2024, primarily due to tax deductions related to stock-based compensation[93] Operational Metrics - The company operated 1,081 shops across 24 U.S. states as of September 30, 2025, with 759 being company-operated and 322 franchised[49] - Systemwide same shop sales increased by 5.7% for the three months ended September 30, 2025, compared to 2.7% in the previous year[138] - Dutch Rewards transactions accounted for 71.8% of total transactions for the three months ended September 30, 2025, up from 67.2% in the previous year[138] Future Outlook - Dutch Bros Inc. plans to continue expanding its market presence and investing in new product development to drive future growth[25] - The company expects continued pressure from minimum wage increases, particularly with California's minimum wage rising to $20 per hour in April 2024[132] - Future labor cost increases may not be fully offset by operational efficiencies or menu price adjustments, impacting profitability[219]

Financial Data and Key Metrics Changes - In Q3 2025, the company reported revenue of $424 million, a 25% increase or $85 million compared to the same quarter last year [22][24] - Adjusted EBITDA for the quarter was $78 million, reflecting a 22% increase or $14 million year-over-year [24][25] - Adjusted EPS rose to $0.19, up from $0.16, marking a 19% increase from Q3 of the previous year [28] Business Line Data and Key Metrics Changes - Company-operated revenue reached $393 million, a 27% increase or $85 million year-over-year, with same shop sales growth of 7.4% driven by 6.8% transaction growth [25][26] - System-wide same shop sales growth was 5.7%, supported by a 4.7% increase in system transaction growth [22][23] Market Data and Key Metrics Changes - The company successfully expanded into six new states in 2025, bringing its total presence to 24 states [5][6] - The average unit volumes (AUVs) across the system reached record highs, indicating strong customer demand and brand appeal [5][19] Company Strategy and Development Direction - The company aims to open approximately 175 new system shops in 2026, with a long-term goal of 2,029 shops by 2029 [6][30] - The strategic focus includes enhancing the food program to drive breakfast and morning day part occasions, with plans to complete the rollout by the end of 2026 [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term durability of the business model and the effectiveness of transaction-driving initiatives, raising full-year guidance for total revenues and same shop sales growth [7][30] - The company noted that transaction growth has been consistent, marking the fifth consecutive quarter of growth, and highlighted the importance of culture and customer experience in driving sales [21][22] Other Important Information - The company has invested in advanced analytics and tools to maintain momentum as it scales, reinforcing its long-term financial model [20][30] - Coffee costs are expected to remain elevated into 2026, impacting margins, while labor costs are anticipated to be affected by regulatory changes in California [26][45] Q&A Session Summary Question: What are the key levers for traffic growth and future innovations? - Management believes there is significant runway in innovation, paid advertising, and the Dutch Rewards program, with ongoing efforts to segment customer offers [32][33] Question: How is the company performing among younger consumers? - The company reported strong performance among younger cohorts, with 75% of transactions coming from Dutch Rewards, indicating brand loyalty despite economic challenges [35] Question: Can you provide insights on customer feedback regarding the food program? - Customer and employee feedback has been positive, with improvements noted as the food program rolls out in new markets [36][37] Question: What is the impact of food on ticket dynamics? - The company noted a 4% comp lift in shops that have food, with a significant portion coming from transaction growth [40] Question: How has competition affected sales in new markets? - Management reported no negative impact from competitors in new markets, maintaining strong sales momentum [41] Question: What are the dynamics of the paid advertising efforts? - The company plans to continue ramping up paid advertising to build brand awareness and drive transactions through the Dutch Rewards program [54][55] Question: How is the mobile order and pay feature performing? - The mobile order mix reached 13%, with expectations for growth as new shops are rolled out [56][57] Question: What operational changes are needed for the food rollout? - The company is adding new equipment and training to ensure that food offerings do not slow down service, with positive throughput metrics observed [58][59]

Core Insights - Dutch Bros (NASDAQ: BROS) reported a strong performance in the third quarter, exceeding both earnings and revenue expectations [1] Financial Performance - The company posted an adjusted earnings per share (EPS) of $0.19, surpassing the expected $0.17 [1] - Revenue for the quarter reached $423.58 million, exceeding the consensus estimate of $413.60 million [1]

1 Supplemental Earnings Slides Q3 2025 DISCLAIMER Forward-Looking Statements. Statements in this presentation and the accompanying oral presentation that are not statements of historical fact are forward-looking statements. Such forward-looking statements include, without limitation, statements regarding the Company's future results of operations or financial condition, including guidance for 2025, new shop openings, business strategy and plans, objectives of management for future operations, and potential ...

Revenue Growth - Total revenues increased by 25.2% to $423.6 million compared to $338.2 million in Q3 2024[4] - Company-operated shops revenue rose by 27.4% to $392.8 million from $308.3 million in the same period of 2024[4] - Systemwide sales for the nine months ended September 30, 2025, were $1.64 billion, a 21.9% increase from $1.34 billion in the same period of 2024[26] - Full-year revenue guidance is raised to between approximately $1.61 billion and $1.615 billion[7] Same Shop Sales - Systemwide same shop sales grew by 5.7%, with company-operated same shop sales increasing by 7.4% year-over-year[4] - Same shop sales growth is now expected to be approximately 5% for the full year[7] - Same shop sales for company-operated shops increased by 7.4% in Q3 2025 compared to a 4.0% increase in Q3 2024[26] Net Income and Profitability - Net income reached $27.3 million, up from $21.7 million in Q3 2024[7] - Net income for the nine months ended September 30, 2025, was $88.1 million, compared to $60.1 million for the same period in 2024, reflecting a 46.6% year-over-year increase[27] - For the three months ended September 30, 2025, net income was $27,283,000, compared to $21,712,000 for the same period in 2024, representing a year-over-year increase of 25.5%[60] EBITDA - Adjusted EBITDA grew by 22.3% to $78.0 million compared to $63.8 million in the same period of 2024[7] - Adjusted EBITDA for the nine months ended September 30, 2025, was $229,912,000, or 19.2% of revenue, up from $181,461,000 and 19.3% in the same period of 2024[59] - The company expects continued growth in adjusted EBITDA and net income margins in the upcoming quarters, driven by operational efficiencies and market expansion strategies[58] Shop Openings and Growth - The company opened 38 new shops, 34 of which were company-operated, across 17 states[4] - Total system shop openings for 2025 are targeted to be 160, with an additional 175 planned for 2026[6] - The total number of company-operated shops increased to 759 by the end of Q3 2025, up from 645 at the end of Q3 2024, marking a 17.6% growth[26] Cash Flow and Financial Position - The company reported a net cash provided by operating activities of $215.9 million for the nine months ended September 30, 2025, compared to $184.2 million in 2024[21] - Cash and cash equivalents at the end of Q3 2025 were $267.2 million, down from $293.4 million at the beginning of the period[21] Cost Management - Selling, general, and administrative expenses for the three months ended September 30, 2025, were $65,289,000, which is 15.4% of total revenue, compared to $57,536,000 or 17.0% in 2024[60] - Adjusted selling, general, and administrative expenses were $57,639,000 for the three months ended September 30, 2025, representing 13.6% of total revenue, down from 14.9% in 2024[60] - Total organization realignment and restructuring costs for Q3 2025 amounted to $2,650,000, or 0.6% of revenue, down from $4,191,000 and 1.3% in Q3 2024[59] Shareholder Metrics - The weighted-average shares of Class A and Class D common stock outstanding - diluted increased to 127,379,000 in Q3 2025 from 114,252,000 in Q3 2024[61] - Adjusted net income per fully exchanged share of diluted common stock was $0.19 for the three months ended September 30, 2025, compared to $0.16 in 2024, indicating a 18.8% increase[61] Customer Engagement - Dutch Rewards transactions accounted for 71.8% of total transactions in Q3 2025, up from 67.2% in Q3 2024, indicating increased customer loyalty[26]