Thank you for standing by, and welcome to the Dutch Bros, Inc. Fourth Quarter 2025 Earnings Conference Call and Webcast. This conference call and webcast is being recorded today, February 12, 2026, at 05:00 p.m. Eastern Time and will be available for replay shortly after it's concluded. [Operator Instructions] I would now like to turn the call over to Neil Patel, Dutch Bros Senior Manager, Investor Relations. Please go ahead.

Good afternoon, and welcome. I'm joined by Christine Barone, CEO and President; and Josh Guenser, CFO. We issued our earnings press release for the quarter and year ended December 31, 2025, after the market closed today. The earnings press release, along with a supplemental information deck have been posted to our Investor Relations website at investors.dutchbros.com. Please be aware that all statements in our prepared remarks and in response to your questions other than those of historical fact are forward-looking statements and are subject to risks, uncertainties and assumptions that may cause actual results to differ materially. They are qualified by the cautionary statements in our earnings press release and the risk factors in our latest SEC filings, including our most recent annual report on Form 10-K and quarterly report on Form 10-Q. We assume no obligation to update any forward-looking statements. We will also reference non-GAAP financial measures on today's call. As a reminder, non-GAAP measures are neither substitutes for nor superior to measures that are prepared under GAAP. Please review the reconciliation of non-GAAP measures to comparable GAAP results in our earnings press release. During the question-and-answer portion of today's call, please limit yourself to one question. With that, I would like to turn the call over to Christine.

Thank you, Neil, and good afternoon, everyone. Dutch Bros remains a powerful growth engine. And as we enter our fifth full year as a public company, our growth story is exceptional, both in terms of the results we are delivering and the expansive future potential that lies ahead. Our fourth quarter and full year 2025 results demonstrate the strong momentum we have in delivering our long-term strategy and were primarily driven by standout transaction growth of 5.4% in Q4. 2025 revenues grew an outstanding 28%, reaching $1.64 billion and have more than doubled since the end of 2022. Our stellar 2025 performance was driven by 16% new shop growth from 154 new shop openings, along with system same-shop sales growth of 5.6% for the year. 2025 new shop productivity remains elevated as the refinements we undertook in our development process over the course of the past couple of years are clearly evident in our results. Throughout the year, new shop openings were consistently strong in both existing and in newer markets, showing our ability to successfully densify and become the routine while still fostering the brand love to welcome long lines of customers. 2025 adjusted EBITDA grew 31%, reaching $303 million and outpaced revenue growth, fueled by exceptional transaction growth and new shop performance, compelling 4-wall economics with company-operated contribution margin at 28.9%, representing over 400 basis points of margin expansion since 2022. And over the same time period, adjusted EBITDA has grown more than threefold to over $300 million, marking a significant milestone over my 3 years at Dutch Bros. This meaningful achievement underscores the strength of our durable model, reinforcing the confidence I have in the long-term opportunity ahead. Focusing on Q4, our results maintained the strength of the prior 3 quarters with broad-based outperformance across the business,…

Thanks, Christine. I'll provide a recap of our fourth quarter and full year 2025 results, along with an outlook for 2026. Our fourth quarter performance reinforces the confidence we have in our underlying transaction strength and our strong 4-wall shop economics. For 2025, total revenues were $1.64 billion, representing an impressive growth of 28%. System-wide AUVs reached a record $2.1 million. Adjusted EBITDA climbed to $303 million, outpacing total revenue growth with an exceptional increase of 31%. System same-shop sales growth was 5.6% with impressive transaction growth of 3.2%. And despite commodity cost headwinds, our 2025 company-operated contribution margin landed at approximately 29%, a testament to our persistence in balancing near-term pressures and strategic investments while continuing to build long-term customer value. Looking forward, as we expect coffee costs to normalize, we remain extremely confident in our ability to deliver our long-term contribution margin goal of approximately 30%. During the year, we opened 154 new shops, bringing our total system shop count to 1,136. For the fourth quarter, total revenues were $444 million, an increase of 29% or $101 million over the fourth quarter of last year. System same-shop sales growth was 7.7%, driven by standout transaction growth of 5.4%. In Q4, we saw broad-based strength throughout the quarter, with momentum driven from exciting innovation and Dutch Rewards. Additionally, we're beginning to see the impact of our new food program on comp, including both ticket and transaction lift, which is consistent with our prior commentary on the program. Looking ahead to 2026, we expect full year system same-shop sales growth of approximately 3% to 5%, which assumes taking around 1 point of incremental price during 2026 as we continue to strengthen our relative value proposition, the impact of cycling strong transaction growth that strengthened over the course of 2025, the…

[Operator Instructions] And our first question comes from Andrew Charles with TD Cowen.

Christine, investors are focused on your same-store sales resiliency this spring as larger limited service restaurants either launch energy and iced coffee beverages or revamp their platforms. And I'm guessing you're not providing specifics, but can you talk about the levers at your disposal to protect traffic during this time? For instance, is there an opportunity to accelerate the food rollout before '26 end given the success you're seeing there? Do you expect to raise marketing spend in '26 to promote more awareness of Dutch? Are you open-minded to increase points offers with Dutch Rewards members? Just some texture on how you're thinking about this and how you maintain your traffic strength.

Yes. Thanks for the question, Andrew. Our business is performing incredibly well. Look at the 7.7% same-shop sales in Q4, and this has been a competitive market since 1992. We have an incredible value proposition. I think the combination of our service, the quality of our beverages, everything that our Broistas provide. We're also right in the sweet spot of where the growth in this market is. It's about convenience. It's about energy. It's about iced, innovation, and we have the best teams and service in this industry. We started the year strong this year, and we're incredibly confident with where the business stands.

And our next question comes from Chris O'Cull with Stifel.

Congrats on another great quarter. Christine, AUVs have reached record levels, yet you've also noted that the company is still in the basic blocking and tackling phase of labor deployment. I'm just wondering, as Jen takes over shop operations, what's her mandate? And how much additional transaction capacity is she looking maybe to unlock during peak periods?

Yes. So Jen is new on board. She just completed her shop training and is getting to know all of our teams. And as we look at her priorities, it's really about how do we serve our Broistas better. So how do we prioritize the initiatives that are coming at our shops and how do we support them to continue to roll-out the food program, to continue to roll-out mobile order and have enhancements in that program. So she'll be very focused on the same initiatives that we're focused on really across the system.

Moving next to Andy Barish with Jefferies.

I think you kind of tied a couple of things together that you may be doing a little bit differently on new store openings in addition to the kind of work that went on, on the pipeline and things like that. Can you unwrap that a little bit more in terms of trading and things like that?

Yes. So as far as our new shop openings go, we continue to focus on making sure that the shop opens with the right teams, with the right support from our MOB team and that we're aware of where are their shops close by so we can train in those shops. So we're very thoughtful now that we have such a large network of shops and such a large network of Broistas who can support the opening of these shops that we can really support them in the best way. I think the other example of that is as our real estate modeling has gotten tighter, we can really think through what those AUVs are going to be in those new markets. Is this a first-to-market shop? What will those AUVs look like so that we can really send that support to ensure that the shop really opens in the best way possible.

And our next question comes from Christine Cho with Goldman Sachs.

Congrats on a great quarter. You mentioned the 4% comp lift in your food private stores with kind of roughly 1/4 coming from transactions previously. As you scale the food program, are there any kind of metrics you could share to help us track the progress, attach rate or mix shift daypart growth? And additionally, while your hot food is positioned primarily as a lever to drive incremental beverage occasions, how are you thinking about potentially broadening the offering to capture additional dayparts and occasions now that all the equipment is already in place?

Yes. So as we look at the food program, we haven't shared additional statistics. But within the company, we're tracking lots of different things. So we're tracking our Broistas satisfaction. We're looking at how the customers are loving the food platform. We're looking at how each successive rollout, the training is going. We're looking at operational metrics within the shop of what our deliveries look like, what our waste percentages look like. So all of those things are being tracked. And we're incredibly pleased with everything that we're seeing as we continue to rollout this program. And then as far as the long term, we really are building a long-term food platform and capability here. And we'll continue to look for opportunities where we could grow attach or grow new occasions at different parts of the day.

Our next question comes from Dennis Geiger with UBS.

Congrats on the results. Just as it relates to '26 guidance, wondering if I could ask a bit more on 2 parts of the guide, Josh. One, including the revenue guide. And if anything more that you could add on sort of what you're embedding from a new store productivity standpoint, at least directionally, it sounds like still elevated. Just wanted to get a sense, is it similar to what you saw last year or anything different embedded there? And just on the EBITDA margin side of things, if anything else additional to unpack there, I know you gave the COGS piece. Could you break out the food menu launch impact specifically, if possible?

Yes. Thanks for the question. So as we think about the -- I guess, our overall shape -- our margin for the year, we are expecting continued coffee headwinds, as I mentioned in my prepared remarks, where coffee costs are really remaining elevated throughout 2025, mostly impacting in Q1 of year '26. So we're expecting about 200 basis points of margin headwind in Q1. That is primarily coffee, but also is driven partially by the impact of the food rollout. We did also highlight that we would continue to expect elevated occupancy and other costs. I haven't given the specifics on that, but you can imagine that, that will remain elevated as we continue our shift to build-to-suit leases. Other important factor as you think about the year is that while we continue to drive leverage in adjusted SG&A, we are expecting a continued flattening of the SG&A dollars quarter-by-quarter relative to prior quarters. So all in, we're expecting full year about 60 basis points of EBITDA margin pressure from all those various pieces. Then -- sorry, back to you -- in the first part of your question on new shop productivity. Certainly, we did see very strong performance coming from new shops really across the board, really exceeding our expectations throughout the year. We have a lot of that being the result of the market planning work and then certainly some geographic openings that just performed really strong. We are expecting that we will have some great openings going into next year, but remain very confident with that $1.8 million target that we are typically underwriting at and feel really good about the returns we see at those levels.

And moving on to David Tarantino with Baird.

Christine, I was wondering if maybe we could revisit the topic on competitive product launches. And I guess there's 2 parts to the question. If you could maybe comment again on how your stores in Colorado performed when McDonald's was running their big energy drink test, that might be helpful. And then I guess, bigger picture, I mean, you've been around the category for a really long time. And I was just wondering your thoughts on kind of what the broader push on advertising of the category might mean for the category growth and how Dutch Bros might be able to take advantage of that?

Yes. So on the first question on the energy test, as we shared last quarter, we really didn't see anything in our business. I think we are the category creator of customized energy. And I think anything that's being shared about the category that creates new customers and new customer interest, I would guess that we would likely benefit from that. And so we do feel really confident about what we're doing from an energy perspective. We've been in the energy business for a very long time and really know what customers want in this space. I think big picture on this broader push on advertising and things like that, I think that this is a category that continues to grow. I think with our very strong growth rate, we're clearly taking share in the category. And I think that anything around the category maybe continues to benefit us. We're seeing incredibly strong results right now.

We'll go next to Sara Senatore with Bank of America.

I have a question about the Clutch acquisition and then just maybe a clarification on Josh's comments on the food impact on margin. Maybe I'll start with that straightforward. Just want to clarify, so food addition should be accretive to shop margins even if they're dilutive to food margins. Is that the right way to think about it? And then the question about the acquisition is, as you think about growth, would you anticipate doing more of these type -- real estate type acquisitions? Is the philosophy that being first mover really matters? Is it that the scale that you can achieve quickly is important? I'm just thinking $20 million to buy 20 shops seems roughly about what it would cost for you to build, I think, on a -- or a little bit maybe more on a build-to-suit basis. So I'm trying to understand maybe the economics or what the impetus was as you think about doing these kinds of things going forward.

Yes, Sara, thanks for the question. So on the food question, so we are expecting pressure on COGS and certainly expect it to be dollar accretive as we're adding overall new occasions to the business, but I would expect it to put a bit of pressure on margin overall. In terms of Clutch, the way we are looking at this, we certainly, to your point on the economics of this, view this as a very productive way of using our capital, deploying capital in acquiring those sites and then converting them being that their existing coffee stands, relatively low investment to be able to convert these to Dutch Bros. As we've done and looked at our portfolio over time, we are always looking for either ground-up builds or conversion opportunities. Clutch provided us a great opportunity to grab a hold of 20 sites in a market that we were just moving into, to be able to enter that market relatively rapidly at a very capital-efficient way. So as we think forward, we'll always be looking for conversion opportunities. Certainly, like I said, a coffee stand is quite easy then to convert to a Dutch Bros, but we'll look for conversion opportunities of those ground-up builds as we continue to expand.

And Brian Harbour with Morgan Stanley has our next question.

With food, what have you seen? Do it open quite strong and perhaps settle out? Does it sort of build steadily? Do you find that some of the markets that have it in more shops have seen higher food mix as that happens? And then I guess, are you contemplating marketing this year? Or is it more of like a '27 onward thing?

Yes. So we continue to be very pleased with what we're seeing from the food rollout. And what we're seeing is very consistent with what we shared last quarter. I think we've gotten it to enough shops that we knew what we were going to see. And we do roll this out. And pretty quickly, our customers are finding it and ordering it and enjoying it. So we actually see that lift pretty quickly after rollout, which has given us that great confidence to continue rolling out this food program. We are seeing both a transaction and a ticket lift, so seeing attach, but we also believe that our existing customers are maybe coming in for that extra beverage occasion because we now have that great morning food for them. We also have great feedback from our Broistas. So all that we're seeing is very strong. I would say on the marketing question that we are still building our brand overall, and we will be a beverage-first brand. We'll remain a beverage-first brand. So I would expect to just continue to see us focusing on beverage as we look at external marketing and that food is that attach when you come into the shop.

And moving on to Jeff Farmer with Gordon Haskett.

Just following up on Sara's question about collection. I'm curious if you guys are -- you alluded to it, but if you're actually sort of actively seeking sort of opportunities like that or just how you're sort of generally viewing the pursuit of small-scale acquisition to potentially accelerate unit growth?

Yes, this is something we've continued to do. So last year, we -- a number of the shops we opened were conversions of other different types of concepts. So this is something that's been in our portfolio for a while, being able to take attractive real estate and turn it into a Dutch Bros. So we'll just continue to look for the best real estate opportunities. What I would say was something like a Clutch, we want it from a CapEx perspective to really fall in line with what we're doing in opening the rest of our shops. So that's something important as we do look for these opportunities, but are certainly open to looking for more.

We'll go next to Jon Tower with Citi.

Maybe on the development side, a number of -- or at least one large coffee player is thinking about moving more aggressively into your markets. And I know there's a number of smaller growing chains that have also been expanding across a lot of your markets. And I'm just curious, I know your model is shifting from ground up to build-to-suit or more of them. But are you seeing any pressures on site availability in markets? Or are you seeing any cost pressures starting to build with respect to competition coming in and perhaps driving up the cost of new locations?

No, that's not what we're seeing. We're really seeing great real estate availability. And I think as our brand continues to grow, we're just an incredibly attractive tenant for folks out there. So we're actually seeing lots of different [Technical Difficulty]. As far as build costs go, we're seeing a steadiness there. But with our shift to build-to-suit, we have been able to lower our CapEx from $1.8 million in Q4 of '24 to $1.3 million in Q4 of '25. So our capital outlay by per shop has really reduced over the last year.

And Chris Carril with KeyBanc Capital Markets has our next question.

Congrats on the really strong results. And thanks for the update on order ahead and walk-up mix. I was wondering if you could maybe expand a little bit more on these channels or order methods, perhaps the incrementality that you're seeing from these channels? And then how are you thinking about the pace of growth of these channels for this year and how much upside you're seeing from them long term?

Yes. So on mobile order, it hit 14% of transactions in Q4. So we're very pleased with that level. Internally, we don't have something that we're telling the shops we need to get to a certain level because we're really driven by what does the customer want to do. And we want to have the channels that the customer wants to approach us with. And so I think that is the most important part. So we're very pleased. It's clearly something that's incredibly popular with our customers. And it is something that's allowed us to balance all of that demand across the shop. And so when we started with mobile order, the window that's not the drive-thru window, the one on the other side, is actually right around 10%. And so that move up to 18% really allows us to balance that demand across the shop in a nicer way.

We'll go next to Jeffrey Bernstein with Barclays.

Great. Christine, I was hoping to get more color on that, the walk-up store you mentioned that I think you opened in November in L.A.. Obviously, it's very early, but new -- seems like a potential new channel. So I'm wondering your learnings. It seems like it would give you a potential for more urban expansion. So how do you think about next steps or what that does for the TAM opportunity or what you need to do to change the box? Any kind of learnings or initial thoughts on how you could perhaps accelerate this opportunity?

Thanks, Jeff. Yes, we're really pleased by what we're seeing. Again, this is very early in looking at this type of model. But I do think the investments that we've made over time. So having that mobile order channel has allowed us to open this up. So the way that we open the shop is we still have a walk-up window and then we have a mobile order window. And so we still have 2 windows even though it is a non-drive-thru shop. And we've got a line buster outside taking your order when you come in and you're coming to that walk-up window. And so a lot of the things that work in our drive-thru shops are working really well in the shop in L.A. As a reminder, our TAM of 7,000 includes drive-thru locations like the locations we have. We still very much believe in that 7,000-unit TAM. And this is a potential additional channel that we're very pleased has just kicked off in a really strong way.

Next, we have Logan Reich with RBC Capital Markets.

Most of mine got asked already, so I'll ask a follow-up on the Clutch acquisition. I appreciate the clarity around the $20 million purchase price, about $1 million per location. I'm just wondering if you can give any additional color on what the additional investment is required to transition those locations over to Dutch Bros and timeline for openings for those 20 stores?

Yes. Thanks for the question. So you could just think about these as an all-in cost, not too inconsistent from how we've been building costs overall or building shops overall. So these are existing coffee stands. Actually, where the founder of the company was a former Dutch employee. So look and feel a lot like a Dutch Bros as they are. So we have some equipment to do, obviously, signage and look and feel to make them look like a Dutch Bros, relatively light capital lift that would put us right in the range of our cost of building shops today. In terms of timeline of opening, we're obviously working through the process of converting them, expect them to open during the year here in Q2 and Q3.

We'll go next to Nick Setyan with Mizuho.

Congrats on a great quarter. Obviously, the company-owned growth is, by far, the primary driver of fundamentals. So just so we can all kind of be on the same page, would it be possible to maybe tell us what the 3% to 5% comp for the year and the 4% to 6% system comp for Q1, what that bakes in for company-owned comp?

Yes, Nick, thanks for the question. We're not providing the decomposition of that on an outlook basis. So obviously, we feel very pleased with the performance we've seen out of both the company and the system during Q4. I feel like both will be contributing to our growth as we head into '26. So both will be contributing to the Q1 guide we gave as well as the full year of the 3% to 5%.

We'll take our next question from Gregory Francfort with Guggenheim Partners.

Just one clarification. Is the $20 million of Clutch acquisition, is that included in the CapEx guide? And then my question, I guess, is for Christine. This walk-up stores opportunity that you guys are unlocking right now, do you think this is going to be a meaningful part of development in either '26 -- I guess, not '26, but '27 or '28? I guess, do you think we could turn that on from a kind of growth channel perspective that quickly?

Yes, Greg, thanks for the question. I'll take the first one quickly here. That $20 million is included in our guide. So that's a part of the full CapEx guide we provided.

Yes. And then on the walk-up location, we'll continue to learn. So very early days, and we'll continue to learn before we understand how -- what this opportunity might look like for us.

Moving on to John Ivankoe with JPMorgan.

So the question is really on competition. And I do think that you've addressed competition for real estate very well. But I do want to ask, and this is really a hyper-local market question because certainly, it's not in the consolidated results around competition that might be happening in very specific trade areas where you've gone from you being in a market to maybe having 2 new entrants or 3 new entrants that have kind of come in around you, both from a customer perspective and also an employee perspective, just if there's anything because certainly, we kind of hear not any actual damage or concern, but people are worried that competition could begin to affect you locally before we would see something nationally. So what I'm really looking for in this call is, if you've seen anything locally that has happened from competition, how deep that may have been or even -- or the duration of that time, if there's been any impact at all that you've noticed just looking on a more micro basis across your chain?

Thanks for the question, John. Yes, we're not really seeing anything on a local level. What we go into every market, there's lots of competition already. There's lots of local players. There's big national players. There's sometimes other growing -- fast-growing chains. So we see all types and lots of different markets and feel incredibly great about our value proposition and feel very good about our ability to compete among many different circumstances. I think the strength of the brand, the strength of our people just sets us up in an incredible way. And we're seeing great performance in our new shops, across geographies, across dayparts. The business is just in a really strong place.

This now concludes our question-and-answer session. I would like to turn the floor back over to Christine Barone for closing comments.

Thanks for your questions. 2025 was a monumental year that significantly built on the multiyear runway since our IPO. Since 1992, it's always been about our people, our culture and investing back into the communities we serve. We continue to give back in 2025, supporting nearly 700 local organizations across the country and hosting more than 1,600 local givebacks. Thank you again to our teams for making 2025 a resounding success. I am grateful for the opportunity to lead this team and look forward to 2026 and beyond.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.