Arcos Dorados Holdings Inc.

Good morning, and thank you for joining Arcos Dorado's first quarter 2026 earnings webcast. With us today are Luis Aranato, our chief executive officer, and Mariano Cronenbaum, our chief financial officer. Today's webcast, which is being recorded, will consist of prepared remarks from our leadership team, which will be accompanied by a slide presentation that is also available in the investor section of our website, ir.arcosdorado.com. To better follow the presentation, please note that you can set your view to full screen on the webcast platform. Additionally, you can submit your questions at any time during the presentation using the Q&A function on the bottom of the screen. After we conclude our opening remarks, we will answer your questions. Today's call will contain forward-looking statements, and I refer you to the forward-looking statements section of our earnings release and recent filings with the FCC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances. In addition to reporting financial results in accordance with generally accepted accounting principles, we report certain non-GAAP financial results. Investors are encouraged to review the reconciliation of these non-GAAP financial results as compared with GAAP results, which can be found in today's earnings press release and conference call presentation, as well as the unaudited financial statements filed today with the SEC on Form 6K. I will now turn the call over to Luis.

Thank you, Dan, and good morning, everyone. Over the last several years, we consistently added to our dominant market share position and elevated brand attributes to historical highs across our comprados operating footprint. As a result, for the six years ended in 2025, total revenue grew almost 60%, giving them nearly double, and net income was up more than 2.5 times in U.S. dollars. Moving forward, our objective is to build on this incredible foundation and capitalize on the significant competitive advantages we built over the period. With that in mind, 2026 is off to a good start. Frank Water 2026 highlights included some important milestones within the context of a challenging consumer environment. Total revenue grew about 13% and surpassed $1.2 billion for the first time in the first quarter, overcoming relatively soft consumption in certain markets. This included 16% growth in system-wide comparable sales, which was driven mainly by average check. But we also saw improvements in guest traffic in several markets. Similar to total revenue, we generated the highest adjusted EBITDA for the first quarter in U.S. dollars. The $119 million result was driven mainly by strong top-line growth combined with very solid market expansion, especially in Brazilian slats. We have pursued strategies that capitalize on the brand to monetize the significant market share advantage we hold in the region. This, together with very strong EBITDA growth, is adding to cash flow performance as well. Along these lines, in a few minutes, Mariana will take you through how we measure adjusted free cash flow to drive shareholder buy-in. Marketing campaigns focused on offering value platforms that appeal to lower income consumers and core menu items that drive brand love, as well as licenses and partnerships that keep McDonald's culturally relevant. The brand experience continued to expand beyond our restaurants, bolstered by the region's most comprehensive digital platform and loyalty program. As much as digitalization has and will change the business, 55% of sales continue to be generated inside our restaurants. During the quarter, we added 19 new restaurants to the footprint, including 13 freestanding units with a more efficient capital growth. Not all markets are in the same phase of the economic cycle. so our local teams have deployed specific strategies to adapt to the specific operating environment. In Brazil, marketing campaigns during the quarter span core menu affordability and partnerships. For example, the introduction of West Burger, leveraging limited time offers through Economeki, the first promotions associated with the FIFA World Cup, and a strong presence and Lollapalooza, Brazil. In MOLAD, marketing initiatives draw sales performance across the division. Mexico, Panama, and Costa Rica continue to leverage affordability platforms and localized offerings. Across markets, family-focused initiatives, six-man venue, and license activations, such as the Friends Menu, complemented core and value execution, reinforcing brand affinity and relevance. In fact, menu innovation was a key growth driver. For example, in the beef category, we introduced the tasty feed cuarto in Chile and Uruguay, blending the popular tasty sauce with the core favorite quarter pounder with cheese to delight guests. In Argentina, we leveraged this successful premium sandwich platform by introducing a limited-time-only, one-feet clubhouse featuring Franco Colapinto, the well-known Formula One driver and local hero. Within the chicken platform, Colombia introduced Busque Stress and the Pozo Mix shareable option, with an encouraging guest response. Finally, we reinforced the brand's cultural relevance in Argentina, Chile, and Colombia through music, a key consumer passion point, a Lollapalooza, and a pale picnic. Digital channels including mobile app, delivery, and self-order kiosks, grew 21% versus the prior year, and contributed about 64% of system-wide sales. Sales growth in delivery remained strong, boosted by promotional activity by new 3PO partners in Brazil. Of course, with an increasingly modernized restaurant base, self-operative sales also grew at an accelerated rate. The loyalty program topped 30 million registered members at the end of the quarter, and we expect the program to grow quickly with more active members to visit us more often now that the rollout phase is nearly complete. U.S. dollar revenue performance was strong in all three divisions. Brazil delivered the highest growth, thanks mainly to contributions from new restaurants, a higher average check, and the appreciation of the Brazilian real. The first six weeks of 2026 were ahead of expectations, but we experienced an important slowdown in restaurant volume in the weeks following Carnival. Our team in Brazil responded with initiatives designed to recover volume without sacrificing profitability. By the end of the first quarter, we saw a promising reversal in guest volume trends while also delivering better margins versus the prior year period. In other words, we took a balanced approach to monetize our significant market share advantage in Brazil. The second quarter is off to a very strong start with positive guest traffic and solid average growth in April and the first half of May. Notice comparable sales rose due to higher guest traffic in a couple of key markets. The result was supported by disciplined pricing, targeted mix optimization, and continued momentum in Mexico. Panamá and Costa Rica also achieved early progress toward rebalancing traffic and average check. The appreciation of the Mexican peso and Costa Rican colon helped contribute to revenue growth in the period as well. SLAT sustained strong momentum, with internal research pointing to either maintained or expanded visit and value share in each SLAT market within the respective QSR industries. This performance underscores our ability to consistently gain market share. The currency environment in SLAT was mixed. most local currencies appreciated versus the primary year, with the exceptions of Argentina and Venezuela. Elevated inflation in these two countries partly offset the currency devaluations, and it helps to generate US dollar revenue growth in the quarter. Over to you, Moreno.

Thanks, Luis. And good morning, everyone. As you just heard, we were able to monetize brand and market share advantages in several key markets during the first quarter of 2026. Adjusted EBITDA totalled $118 million at almost 30% in US dollars year over year. The consolidated margin expanded by 120 basis points with a very encouraging 60 basis point contribution from food and paper and 60 basis points from G&A as well. Modest pressure in payroll and occupancy and other operating expenses was fully offset by income from certain sub-franchisee restaurant transactions in NOLA and SLEP. Even without these transactions, consolidated EBITDA margin expanded by 70 basis points versus the first quarter of 2025. Going back to food and paper, both Brazil and SLAD were able to generate margin improvements versus last year, when LONAD was stable as a percentage of revenue, despite accumulated food inflation globally. Federal expenses were up as a percentage of revenue in Brazil and no less, mainly due to higher hourly crew wages. This was partly offset by federal expense leverage in SLAD. Occupancy and other operating expenses included modest pressure in each division, whereas G&A was lower, partly reflecting the benefits of last year's restructuring process. First quarter adjusted EBITDA included $5.8 million from sub-franchisee restaurant transactions in FLAR and NOBLE, which added $2.7 million and $3.1 million, respectively. In Brazil, adjusted EBITDA was up more than 20% in U.S. dollars. Improved food and paper was the main driver of the quarter's 30 basis point margin expansion. NOLA has had a more challenging time generating margin improvement in recent quarters. Excluding the income from the restaurant transaction, IBIKA margin was down about 40 basis points in the quarter. We're working with the leaders in each market to implement strategies that better balance guest volume and profitability. SLAT continued generating strongest dollar growth and margin expansion in the first quarter, Even without the income from the restaurant transaction with the local sub-franchisee, SLAD's EBITDA margin rose by about 120 basis points in the period. Moving ahead, we remain optimistic that SLAD is on track to deliver another positive performance this year, navigating the short-term while building on the successes of 2025. Starting with today's earnings release, we will be publishing our adjusted free cash flow for the last 12 months. We believe this calculation over a full business cycle provides a clear picture of our ability to service our debt and fund our capex plans. Additionally, this is in line with the three pillars of focus that Luis introduced last year, targeting greater operational efficiency and cash flow generation, to create long-term shareholder value. For the 12 months ended March 31st, adjusted free cash flow generation reached almost $110 million versus a negative $3 million in the previous period. As a reminder, during the first quarter, we also completed the liability management transaction we described on our last call. As of the end of the first quarter, net debt to adjusted EBITDA was unchanged compared with year-end 2025. We continue to have a healthy cash balance and are combining improved profitability and cash flow generation with other initiatives to strengthen our balance sheet and support future growth and modernization. With that in mind, during the first quarter, we invested $36.8 million, including $16.7 million for new restaurants. Growth continues to be a priority for capital allocation as long as the returns on investment are strong. With all the uncertainty currently influencing local economies and consumer behavior, we continue to focus on the factors we control to drive profitable sales growth and generate value through the investments we make inside and outside our restaurants. I am encouraged by the progress achieved during the first quarter and our objective remains to deliver improved underlying margin performance throughout the year. Back to you, Luis.