Dutch Bros Inc.

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 12th, 2026 at 5 p.m. Eastern time and will be available for replay shortly after it's concluded. Following the company's presentation, 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 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 Gunzer, CFO. We issued our earnings press release for the quarter and year-ended December 31st, 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 we're 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 four-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 three 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 maintain the strength of the prior three quarters, with broad-based outperformance across the business, across geographies, and across day parts, with our brand continuing to resonate with customers. Q4 total revenues grew 29%, driven by healthy new shop performance, system same-shop sales growth of 7.7%, and company-operated same-shop sales growth of 9.7%, with both of these metrics led by strong transaction growth. System-wide AUBs reached a record $2.1 million, reflecting the strength of our people pipeline, the love for our brand, and the superior development execution engine we've refined and built over the past few years. Against this backdrop of impressive growth, we are transitioning smoothly into the next chapter of the brand's journey with a clear rallying goal to reach 2,029 shops in 2029. The progress the team made throughout 2025, including the acceleration of our shop pipeline and investments in our capabilities, leaves me with tremendous confidence in this brand and this team's ability to drive share-taking growth for many years to come. As we leave a very successful 2025 behind and enter 2026 at full speed, I wanted to recognize and sincerely thank our teams. for making this past year a resounding success. Our people, the heart of our brand, remain the foundation of our differentiated shop experience. They've been our shining strength for more than 30 years and our people will continue to drive us forward for years to come. Our BroEast's ability to deliver a unique experience has been central to our growth and mission of being a fun-loving, mind-blowing company that makes a massive difference one cup at a time. That commitment continues to be a defining driver of our success. In 2025, we began the year with approximately 400 regional operator candidates in our pipeline and ended with approximately 475, a figure that has nearly doubled since the end of 2022. During that period, we have nearly doubled our system shop count and more than doubled our company operated shop count, which now represents over 70% of our system shop base. We believe this pace of expansion and our goal of reaching 2,029 shops in 2029 is only possible with the depth and readiness of our people who continue to scale our shop footprint with love, energy, and kindness. Turning to shop growth 2025 was a landmark year, setting the foundation for what's ahead. We expanded into seven contiguous states, including our entry into North Carolina in Q4, bringing our system shop footprint to 25 states and 1,136 system-wide shops. In 2025, we accelerated the growth of our shop pipeline while significantly lowering our average capex per shop. providing improved visibility and confidence for shop openings in future years. During the year, the number of shops in our pipeline accelerated substantially, with shop approvals more than doubling versus 2024. Given this improved visibility, the road to 2,029 shops in 2029 remains very clear. In Q4, we opened a walk-up shop in downtown Los Angeles. This shop provides a valuable platform for insights into urban dense quarters where drive throughs are harder to build. Since opening in late November this non drive through location has been our top performing shop and has an order ahead mix at over three times the system average. While still early these insights position us to be confident on the types of locations, where we can be successful. Looking to 2026, momentum is expected to continue. We now expect to open at least 181 new system shops, which includes the recently completed acquisition of 20 clutch coffee bar locations across North and South Carolina. This conversion opportunity accelerates our presence in the Carolinas and allows us to introduce Dutch love to these communities beginning later this year. Now, let me share how we are strengthening our competitive advantage through a focused set of foundational transaction driving initiatives, along with our strategic growth drivers to broaden access to a wider set of customers and occasions. In 2023, we made a deliberate shift to build a foundational top of the funnel paid advertising engine. The results have been clear. Aided and unaided awareness have meaningfully expanded. while still leaving substantial headroom for growth. And now in its third year, our brand awareness strategy is being deliberately amplified through the rollout of the Dutch Bros CPG platform. Creamers, coffee pods, ground coffee, and ready to drink offerings are now available in many retail outlets. We are very pleased with the initial customer reception and see meaningful potential to continue building this over time. Paired together, paid media and CPG form a scalable high ROI awareness engine, extending the brand beyond our shops, reinforcing daily relevance, while converting awareness into incremental shop visits. We continue to believe brand awareness remains a significant opportunity, making CPG one of our most efficient levers to continue driving durable long-term growth. Our innovations empower our broistas, unlocking near-infinite beverage customizations and deepening the emotional connection we have with our customers. This innovation momentum clearly showed up in Q4 with a highly successful holiday LTO launch, which demonstrated our ability to drive strong customer engagement in the quarter. In November and December, we reinforced our strategy of driving innovation beyond beverages through impactful merch drops. including the Passenger Princess car magnets and the Little Bros mini figurines, which cleared out within hours of launch. And alongside innovation, our loyalty program continues to scale. Dutch Rewards turns five years old this month, having just surpassed 15 million members at the end of 2025. In 2025, approximately 72% of system transactions were attributed to Dutch Rewards. representing four points of improvement versus 2024. Looking ahead to 2026, we expect to continue expanding our customer targeting capabilities, reaching the right customer at the right moment, improving lifetime value, and driving high ROI transaction growth. Together, these foundational initiatives form a long-term engine of innovation, personalization, and loyalty that expands our competitive moat. Beginning in late 2024 and into 2025, we built on our foundational drivers by layering in additional multi-year capabilities, order ahead, improvement and throughput, and our new food program. Together, these initiatives are designed to meaningfully reduce friction, unlock our shop capabilities, and expand our customer base and visit frequency over time. Our order ahead program ended 2025 with approximately 14% mix in Q4. The program has activated an underutilized channel, the walk-up window, which was approximately 18% of channel mix in Q4. Order ahead has also proven to be a powerful catalyst for our loyalty program, driving Dutch Rewards penetration higher to 70% plus each full quarter since launch. Even with continued growth in Dutch Rewards membership, we continue to see registrations per shop and active users per shop trend higher, an indicator of sound shop loyalty and customer engagement. 2025 was also a pivotal year in establishing the foundation for sustainable throughput improvement. We implemented a new training model for our field teams and refined labor deployment by aligning labor to better match customer demand patterns. These efforts are delivering results, enabling us to support continued transaction growth, while protecting the customer and Broista experience. To further build on our momentum, we welcome Jen Summers as Chief Shops Officer last month. She brings deep experience in scaling high growth restaurant brands, while elevating operational excellence and customer experience. We are equally encouraged with the progress of our new food program. which continues to perform exceptionally well as we expand its rollout across the broader system. This represents another meaningful step toward lowering structural barriers to visiting Dutch Bros and expanding the set of beverage occasions. It's worth noting that one year ago, this program was limited to four shops in the greater Phoenix market, and by the end of 2025, we had thoughtfully expanded this program to over 300 shops across 11 states, with plans for the rollout to be complete by the end of 2026. Collectively, these initiatives strengthen our scalable shop operating system, one designed to increase speed, provide greater convenience, and drive share-taking growth. In closing, Dutch Bros remains exceptionally well-positioned with a very clear strategy strong fundamentals, and a long runway ahead. We are intentionally building this business with a long-term mindset, focused on growing through our people and investing in our brand. We have the largest and most experienced pipeline of regional operators in our history, providing a clear line of sight to 2,029 shops in 2029. System-wide AUVs are at record levels, reinforcing strong shop-level economics and giving us confidence to pursue our long-term opportunity of 7,000 shops. New shop productivity continues to exceed historical levels, reflecting disciplined market planning, targeted strategic investments in our real estate capabilities, and increased paid marketing to build brand awareness. We continue to have top-tier growth. Over the last three years, we have more than doubled total revenues while also tripling adjusted EBITDA, demonstrating the strength and scalability of our model. We have ignited transaction growth in 2025 with a much larger comp base, delivering sequential year-over-year improvement in transaction growth, driven by impactful innovation, the expansion of Dutch rewards, and continued adoption of order ahead. We have built a highly scalable and profitable model that quickly resonates with our customers and a value proposition that has been carefully unlocked over 30 years. And our fundamentals remain sound as we've delivered 19 consecutive years of positive same shop sales growth. Our approach is designed for winning in the long run, operating with discipline, focusing on long-term execution, and growing through our exceptional people. With that, I'll pass it to Josh.