Dutch Bros Inc.

we will open up the lines for questions and instructions to queue up will be provided at that time. I would now like to turn the call over to Patty Warren, Dutch Bros. Senior Director, Investor Relations and Capital Markets. Please go ahead.

Good afternoon and welcome. I'm joined by Christine Barone, CEO and President, and Josh Gunzir, CFO. We issued our earnings press release for the quarter ended June 30th, 2025, after the market closed today. The earnings press release, along with a supplemental information deck, have been posted to our Investor Relations website. 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 our actual results to differ materially. They are qualified by the cautionary statements in our earnings press release and the risk our most recent annual report on Form 10-K and our 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. With that, I now like to turn the call over to Christine.

Thank you, Patty, and good afternoon, everyone. Dutch Bros continues to fire on all cylinders, guided by a focused strategy, strong execution and our amazing people. Our second quarter performance underscored our continued momentum and reaffirmed the strength of our brand. We are encouraged by our significant multi-year runway and the opportunities we have to deliver sustained results and continue scaling this company with our tenured and passionate team. In Q2, once again, we delivered on our mission to be a fun-loving, mind-blowing company that makes a massive difference one cup at a time. Our business momentum remained strong and our second quarter results were outstanding across multiple fronts. We delivered revenue growth of 28%, system same-shop sales growth of 6.1%, and company operated same-shop sales growth of 7.8%. Our transaction driving initiatives are working. As system comp was primarily driven by transaction growth of 3.7%, marking yet another consecutive quarter of transaction growth. This growth was fueled by a coordinated effort of our long-term, multi-year transaction drivers. Our new shop opening cadence is on track and we remain confident in our ability to open at least 160 system shops in 2025. New shop productivity is at elevated levels and in Q2 we opened 31 new shops and entered Indiana, our 19th state. Our confidence in this year's trajectory continues to grow, reinforced by the strong performance we have seen so far this year. It is very clear that our efforts are working in unison to propel us forward. These efforts translated into strong financial results in the second quarter. Systemwide AUBs were $2.05 million in the quarter, in line with record levels. Revenue grew at 28%, with exceptional flow through generating an impressive 37% adjusted EBITDA growth for the quarter. Based on these outstanding results across the board, I am very pleased to announce that we are raising our full-year guidance for total revenues, same-shop sales growth, and adjusted EBITDA. Josh will share additional details in a few minutes. Let's begin today's business update by spotlighting our greatest force multiplier, our exceptional people. Since 1992, we have been trailblazing a category-defining people-first culture within the drive-through beverage industry. When combined with our relentless focus on speed, quality, and service, our people-first culture is not only our differentiator, but it is our most powerful competitive advantage. Every senior leader in our business has passed their flow checks, and every new broista begins their journey grounded in our culture before learning to handcraft beverages. This approach ensures our leaders are fully immersed in the heart of our business, building empathy, strengthening connection to the field, and enabling more informed people-first strategic decisions. Our commitment to culture is also reflected internally with ongoing field surveys. We consistently score high on overall job satisfaction and our values of radiate kindness, get up early, stay up late, and change the world. When we recently expanded into Indiana, our opening mob team was on the ground, delivering a track record of consistency and service to jumpstart the Dutch Bros brand in the state. This approach ensures every new market, every new shop, and every new future in the field reflects the culture that has defined us for over 30 years. Our current operator pipeline includes over 450 candidates, with an impressive average tenure of over seven years, each one ready to carry forward and scale the Dutch Bros culture. This homegrown pipeline, built over time with intention, ensures a consistent high bar across markets that is difficult to replicate. Our operator pipeline is central to scaling our shops, and more importantly to scaling the Dutch Bros culture consistently. These individuals are deeply aligned with our values and bring a strong foundation of experience, positioning us for long-term, people-driven growth. Shifting to development, we opened 31 system shops in the second quarter, and are energized by the accelerating momentum into the back half of the year to open at least 160 shops in 2025. Thanks to the robust tools, streamlined processes, and exceptional talent we've invested in thus far, we are well positioned to achieve our goal of 2,029 shops in 2029. If there's one takeaway from today's call, it is this. Dutch Bros is in growth mode, and we are just getting started. With a long-term addressable market of 7,000 shops nationwide, and just north of 1,000 shops today, the runway ahead is expansive. We continue to broaden our real estate capabilities by making key hires who will execute on our long-term pipeline. With refined systems and a disciplined market planning approach in place, we continue to scale our presence nationally and accelerate an ambitious growth strategy. New shop productivity remained at elevated levels in Q2, driven by our refined approach to market planning. With new locations opening in the right areas, in the right sequence, customers are lining up from day one. These strategic investments in planning, tools, and processes have improved system-wide AUVs and new shop productivity, positioning us for long-term success. Now let me share how we're expanding our competitive advantages through a focused set of clear and well-defined transaction driving initiatives. We are delivering transaction growth through a three-part plan, which includes an enhanced focus on category-wide innovation, an increase in paid advertising efforts designed to build brand awareness, and an emphasis on the Dutch Rewards Program for -to-one customer connection. We saw steady progress across each of these initiatives during the quarter, with clear signs that our efforts are working, evidenced by a sequential improvement in transaction growth. We are only beginning to unlock our full potential, with significant runway ahead. Here is an update on each. First, innovation. Innovation has been a cornerstone of our brand for over three decades, and it will continue to play a pivotal role going forward. This quarter, we responded to strong customer demand by bringing back lavender, and we We also introduced dulce de leche using ingredients from our existing pantry. We also introduced sour berry and matcha, showcasing how we simultaneously innovate across our menu categories. These launches reinforce our commitment to delivering bold, exciting flavors that resonate with our customers. In May, we elevated the customer experience with a thoughtful touch, returning the Friendship bracelets from 2024 that highlight our engaging customer-first approach in a fun way. Then in June, we kept the excitement going with the Dutch Cousi, bringing something fresh, relevant, and most importantly, fun for our customers. Second, paid advertising. During the quarter, we continued to step up execution of our paid advertising strategy, and the results have been clear. As we highlighted during our investor day, the strong performance of newer ventages has been driven in part by our laser focus on paid media and brand awareness. We are proud to share that based on recent survey data, both our aided and unaided awareness have shown significant improvement when compared to last year. We are seeing clear momentum, and we're energized by the positive trajectory. This progress reflects the strength of our brand and the impact of our continued efforts. Looking ahead, we see a clear and compelling runway to further close the awareness gap in new and existing markets, both in relative and absolute terms, unlocking even greater potential for our brand. As we scale and maintain a higher elevated paid advertising stance, the benefits of our awareness driving initiatives are clear to us. Additionally, we believe the planned launch of our CPG line in 2026 can provide a meaningful tailwind to brand awareness, providing an expansive runway for our brand to grow. And finally, Dutch rewards. In Q2, approximately 72% of system transactions were attributed to our loyalty program, representing a five point expansion versus the same period last year. We are just starting to tap into the full potential of this data to enhance our segmentation strategies. Recently, we have become more precise in the way in which we tailor communication to specific customer cohorts based on their rewards behaviors. This streamlined approach helps us build stronger, more personalized relationships across each segment. In addition to these foundational transaction driving initiatives, we see a clear path forward with our strategic growth drivers, order ahead, throughput, and food. We remain enthusiastic about order ahead as we believe it is contributing to our transaction growth. As of the end of the second quarter, order ahead accounted for approximately .5% of transaction mix. In select new markets, we are seeing transaction mix more than double the overall average. Order ahead awareness has been driven primarily by customer exposure to the program through shop signage and our mobile app. This deliberate steady approach remains our focus as we continue to prioritize driving the business forward while ensuring that our bro-easters are set up to deliver fantastic service. We are seeing our strategy come to fruition as order ahead gains momentum in the morning day part. We are focused on eliminating structural barriers, driving better throughput outcomes, and opening up the underutilized walk-up window channel. These results reinforce our confidence in our multi-year journey. We remain focused on increasing transaction potential at our shops by increasing speed and capacity through a series of throughput-based initiatives. Transaction growth continues to be healthy in Q2, and our shops are intentionally designed to support high volumes, aiding our throughput efforts. This enables us to meet rising demand while consistently delivering an exceptional customer experience. Recently, we introduced enhanced dashboards, which provide shop management greater visibility into speed-based KPIs. We know that when our field clearly understands and easily sees measurable goals, they take meaningful action to improve throughput. We are also continuing to refine our labor deployment model, ensuring that staffing better matches demand expectations during the day. While it is still early innings, these initial low-hanging fruit wins represent a strong We remain excited about the progress of our food pilot and look forward to continuing to test and refine throughout 2025. Early results suggest that an expanded food offering is driving incremental growth in the morning-day part, much like our Order Ahead initiative. During the quarter, we expanded the pilot to 64 company-operated shops. Extending beyond Arizona into select markets in Kansas, Missouri, and Oklahoma. The initial results from our pilot test are exceeding expectations and reinforcing the potential of this initiative to drive AUVs. We are seeing encouraging signs of both ticket and transaction lift within the test group. Early performance in new markets has been especially strong, adding to our confidence to continue testing, ensuring we scale thoughtfully over time. We are pleased with customer and Broista survey data as well, particularly around feedback from customers on quality and likelihood to recommend, and are encouraged by early results indicating our ability to maintain high throughput levels. We're well positioned to expand this test in 2025 and pursue a broader system rollout throughout 2026. This expansion will enable Dutch Bros to capture additional white space in the morning-day part, which is a routinized, high-value occasion with strong growth potential. In closing, momentum in our business is strong, and we remain confident in the multi-year growth runway ahead. We have the most passionate people who are deeply engaged in the business. Our Broistas energize every interaction with the customer, fueling momentum across our brand and our operator pipeline is ready to grow with us. We have clear visibility on our growth drivers. In Q2, we achieved 28% -over-year revenue growth and .1% system same-shop sales growth, reflecting the strength of our business. We are clearly resonating with our customers, as demonstrated by healthy transaction growth. With over 30 years of brand love behind us, we continue to open shops with lines that stretch well beyond our drive-throughs, underscoring the strength of our strong demand. We are operating at the intersection of a powerful set of secular trends which are shaping our industry. From the rising demand for cold beverages, energy drinks, and enhanced customization, we are exceptionally well positioned to continue the pursuit of our strategic vision. Our new shop productivity remains elevated, and we're excited about the cadence of openings throughout the remainder of the year. To be over 1,000 shops in with the amazing love we see for our brand gives me so much optimism in our future, our team, and the strength of this amazing company. I'll now turn it over to Josh, who will discuss our financial performance and updates on guidance.