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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________

FORM 10-Q

______________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended September 30, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number 001-40798

______________________________

DUTCH BROS INC.

(Exact name of Registrant as specified in its charter)

______________________________

Delaware

87-1041305

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer Identification No.)

1930 W. Rio Salado Pkwy

Tempe,

Arizona

85281

(Address of Principal Executive Offices)

(Zip Code)

(877) 899-2767

(Registrant's telephone number, including area code)

______________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of Exchange on which Registered
Class A Common Stock, par value $0.00001 per share	BROS	The New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

As of October 31, 2025, the registrant’s outstanding shares of common stock were as follows:


Class A common stock			127,031,344
Class B common stock			35,210,946
Class C common stock			2,279,846

DUTCH BROS INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS


		Page

Glossary		1
Forward-Looking Statements		2

PART I	FINANCIAL INFORMATION	3



ITEM 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Comprehensive Income	6
	Condensed Consolidated Statements of Stockholders’ Equity	7
	Condensed Consolidated Statements of Cash Flows	11
	Notes to Condensed Consolidated Financial Statements	13
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	49
ITEM 4.	Controls and Procedures	50

PART II	OTHER INFORMATION	51



ITEM 1.	Legal Proceedings	51
ITEM 1A.	Risk Factors	51
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	53
ITEM 3.	Defaults Upon Senior Securities	54
ITEM 4.	Mine Safety Disclosure	54
ITEM 5.	Other Information	54
ITEM 6.	Exhibits	55

SIGNATURES		56

GLOSSARY

As used in this Quarterly Report on Form 10-Q (this Form 10-Q), the terms identified below have the meanings specified below unless otherwise noted or the context requires otherwise. References in this Form 10-Q to “Dutch Bros,” the “Company,” “we,” “us” and “our” refer to Dutch Bros Inc. and its consolidated subsidiaries unless the context indicates otherwise.


Term						Definition
2022 Credit Facility						Has the meaning set forth in NOTE 9 — Debt to the condensed consolidated financial statements, included elsewhere in this Form 10-Q
2025 Credit Facility						Has the meaning set forth in NOTE 9 — Debt to the condensed consolidated financial statements, included elsewhere in this Form 10-Q
AOCI						Accumulated Other Comprehensive Income
ASU						Accounting Standards Update
AUV						Average Unit Volume

BPS or bps						Basis points, which is used to express differences in rates. One basis point is the equivalent of 1/100 of one percent
CEO						Chief Executive Officer
CODM						Chief Operating Decision Maker
Co-Founder						Travis Boersma, our Executive Chairman and Co-Founder, and affiliated entities over which he maintains voting control

Continuing Members						The Co-Founder and the Sponsor
Dutch Bros OpCo						Dutch Mafia, LLC, a Delaware limited liability company and direct subsidiary of Dutch Bros Inc.
Dutch Bros Inc.						A Delaware corporation, the Class A common stock of which is publicly traded on the New York Stock Exchange under the symbol “BROS”

EBITDAR						Earnings before interest, taxes, depreciation, amortization, and rent costs
FASB						Financial Accounting Standards Board
GAAP						U.S. Generally Accepted Accounting Principles
IPO						Initial Public Offering

N/A						Not applicable
N/M						Not meaningful
OpCo LLC Agreement						The Fifth Amended and Restated Limited Liability Company Agreement of Dutch Bros OpCo
OpCo Units						Class A common units, Class B voting units and Class C voting units of Dutch Bros OpCo, each as further defined in the OpCo LLC Agreement, collectively



PSU						Performance-Based Stock Units


RSA						Restricted Stock Awards
RSU						Restricted Stock Units
Same Shop Sales						The estimated percentage change in year-over-year sales, for the comparable shop base, which we define as shops open for 15 complete months or longer as of the first day of the reporting period
SEC						Securities and Exchange Commission
SOFR						Secured Overnight Financing Rate
Sponsor						TSG Consumer Partners, L.P. and certain of its affiliates
Tax Receivable Agreements (TRAs)						The Tax Receivable Agreement (Exchanges) that Dutch Bros Inc. entered into with the Continuing Members and the Tax Receivable Agreement (Reorganization) that Dutch Bros Inc. entered into with TSG7 A AIV VI Holdings-A, L.P. and DG Coinvestor Blocker Aggregator, L.P. or their assignees or successors, in connection with the IPO

Dutch Bros, our Windmill logo (

), Dutch Bros Blue Rebel, and our other registered and common law trade names, trademarks and service marks are the property of Dutch Bros Inc. All other trademarks, trade names, and service marks appearing in this Form 10-Q are the property of their respective owners. Solely for convenience, the trademarks and trade names in this Form 10-Q may be referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert their rights thereto.

Dutch Bros Inc.| Form 10-Q | 1

Table of Contents

Forward-Looking Statements

Certain statements in this Form 10-Q, including those in the section titled “Management’s Discussion and Analysis,” that are not historical facts, including those regarding the impact of inflation, increased minimum wages, interest rate risk, and general macroeconomic conditions on our results of operations, supply chain, or liquidity, the potential impact of actions we have taken to mitigate the impact of unforeseen circumstances, taxes and tax rates, our expectations regarding the number of new shops we may open, anticipated future revenues and earnings, consumer demand, and our expectations to generate positive cash flow in the foreseeable future are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. We use words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “predict,” “project,” “should,” “target,” and similar terms and phrases, including references to assumptions, to identify forward-looking statements. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These forward-looking statements are based on information available to us as of the date of this Form 10-Q, and we assume no obligation to update these forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements. You should not place undue reliance on forward-looking statements, which speak only as of the date of this Form 10-Q.

You should read the following unaudited condensed consolidated financial statements and the related notes in this Form 10-Q together with our analysis and discussion of our financial condition and results of operations and other financial information included elsewhere in this Form 10-Q. You should also read our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 13, 2025 (2024 Form 10-K).

While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect actual results. You should evaluate all forward-looking statements made in this report in the context of the factors that could cause outcomes to differ materially from expectations. These factors include, but are not limited to, those listed under the “Risk Factors” section of this Form 10-Q, and in our 2024 Form 10-K, as such risk factors may be amended, supplemented or superseded from time to time by other reports we file with the SEC.

Website Disclosure

We use our website as a distribution channel of material company information. Financial and other important information regarding our company is routinely posted on and accessible through our website at https://investors.dutchbros.com. In addition, you may automatically receive email alerts and other information about our company when you subscribe your email address by visiting the “Investor Email Alerts” section of our investor relations page at https://investors.dutchbros.com/resources. The information on our website is not incorporated herein or otherwise a part of this Form 10-Q.

Dutch Bros Inc.| Form 10-Q | 2

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DUTCH BROS INC.

Condensed Consolidated Balance Sheets



(in thousands, except per share amounts; unaudited)	September 30, 2025		December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	267,195	$	293,354
Accounts receivable, net	14,303		10,598
Inventories, net	45,295		36,488
Prepaid expenses and other current assets	14,345		17,501
Total current assets	341,138		357,941
Property and equipment, net	789,333		683,971
Finance lease right-of-use assets, net	393,406		374,623
Operating lease right-of-use assets, net	415,021		315,256
Intangibles, net	1,762		2,947
Goodwill	21,629		21,629
Deferred income tax assets, net	949,663		742,126
Other long-term assets	10,045		2,592
Total assets	$	2,921,997	$	2,501,085
Liabilities and Equity
Current liabilities:
Accounts payable	$	38,242	$	32,225
Accrued compensation and benefits	49,256		49,778
Other accrued liabilities	39,946		26,516
Other current liabilities	14,421		7,067
Deferred revenue	45,606		42,868

Current portion of tax receivable agreements liability	514		71
Current portion of finance lease liabilities	15,364		13,256
Current portion of operating lease liabilities	17,228		13,979
Current portion of long-term debt	3,879		17,311
Total current liabilities	224,456		203,071
Deferred revenue, net of current portion	7,104		8,015
Finance lease liabilities, net of current portion	390,707		369,297
Operating lease liabilities, net of current portion	413,402		309,311

Long-term debt, net of current portion	195,997		219,755
Tax receivable agreements liability, net of current portion	825,302		627,763
Other long-term liabilities	—		8
Total liabilities	2,056,968		1,737,220
Commitments and contingencies (Note 15)

Dutch Bros Inc.| Form 10-Q | 3

Table of Contents

DUTCH BROS INC.

Condensed Consolidated Balance Sheets (continued)



(in thousands, except per share amounts; unaudited)	September 30, 2025		December 31, 2024
Preferred stock, $0.00001 par value per share - 20,000 shares authorized; zero shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively	—		—
Class A common stock, $0.00001 par value per share - 400,000 shares authorized; 127,031 and 115,432 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively	1		1
Class B common stock, $0.00001 par value per share - 144,000 shares authorized; 35,211 and 35,227 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively	—		—
Class C common stock, $0.00001 par value per share - 105,000 shares authorized; 2,280 and 3,545 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively	—		—

Additional paid-in capital	578,256		517,074
Accumulated other comprehensive income	162		628
Retained earnings	78,138		19,666
Total stockholders' equity attributable to Dutch Bros Inc.	656,557		537,369
Non-controlling interests	208,472		226,496
Total equity	865,029		763,865
Total liabilities and equity	$	2,921,997	$	2,501,085

See accompanying notes to condensed consolidated financial statements.

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DUTCH BROS INC.

Condensed Consolidated Statements of Operations


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts; unaudited)	2025		2024		2025		2024
Revenues
Company-operated shops	$	392,833	$	308,295	$	1,099,754	$	851,648
Franchising and other	30,751		29,917		94,795		86,581
Total revenues	423,584		338,212		1,194,549		938,229

Costs and Expenses


Cost of sales	316,805		248,161		877,733		686,048




Selling, general and administrative	65,289		57,536		189,595		161,866
Total costs and expenses	382,094		305,697		1,067,328		847,914

Income from operations	41,490		32,515		127,221		90,315

Other expense
Interest expense, net	(6,695)		(6,869)		(20,886)		(20,259)
Other income (expense), net	149		764		(1,852)		7,357
Total other expense	(6,546)		(6,105)		(22,738)		(12,902)

Income before income taxes	34,944		26,410		104,483		77,413
Income tax expense	7,661		4,698		16,363		17,330
Net income	$	27,283	$	21,712	$	88,120	$	60,083

Less: Net income attributable to non-controlling interests	9,788		9,068		29,648		28,437
Net income attributable to Dutch Bros Inc.	$	17,495	$	12,644	$	58,472	$	31,646
Net income per share of Class A and Class D common stock:
Basic	$	0.14	$	0.11	$	0.47	$	0.32
Diluted	$	0.14	$	0.11	$	0.47	$	0.32
Weighted-average shares of Class A and Class D common stock outstanding:
Basic	126,986		113,819		124,751		99,756
Diluted	127,379		114,252		125,204		100,070

See accompanying notes to condensed consolidated financial statements.

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DUTCH BROS INC.

Condensed Consolidated Statements of Comprehensive Income


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands; unaudited)	2025		2024		2025		2024
Net income	$	27,283	$	21,712	$	88,120	$	60,083
Other comprehensive loss:
Unrealized loss on derivative securities, effective portion, net of income tax benefit of $(40), $(247), $(187) and $(183), respectively	(187)		(1,324)		(777)		(537)
Comprehensive income	27,096		20,388		87,343		59,546

Less: comprehensive income attributable to non-controlling interests	9,723		8,506		29,337		28,134
Comprehensive income attributable to Dutch Bros Inc.	$	17,373	$	11,882	$	58,006	$	31,412

See accompanying notes to condensed consolidated financial statements.

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DUTCH BROS INC.

Condensed Consolidated Statements of Stockholders’ Equity


Three Months Ended September 30, 2025

	Dutch Bros Inc. Stockholders’ Equity
	Class A Common Stock			Class B Common Stock			Class C Common Stock
(in thousands; unaudited)	Shares	Amount		Shares	Amount		Shares	Amount		Additional Paid-in-Capital		Accumulated Other Comprehensive Income		Retained Earnings		Non-Controlling Interests		Total Equity
Balance, June 30, 2025	126,932	$	1	35,211	$	—	2,347	$	—	$	575,240	$	284	$	60,643	$	197,761	$	833,929

Net income	—	—		—	—		—	—		—		—		17,495		9,788		27,283
Unrealized loss on derivative securities, effective portion, net of income tax benefit of $40	—	—		—	—		—	—		—		(122)		—		(65)		(187)
Equity-based compensation expense	—	—		—	—		—	—		3,326		—		—		1,322		4,648
Issuance of Class A common stock pursuant to vesting of equity awards	32	—		—	—		—	—		(728)		—		—		(289)		(1,017)
Issuance of Class A common stock for conversion of Dutch Bros OpCo Class A common units, and for surrender and cancellation of Class C common stock, pursuant to exchange transactions	67	—		—	—		(67)	—		—		—		—		—		—
Effect of equity transactions of Dutch Bros OpCo Class A common units	—	—		—	—		—	—		45		—		—		(45)		—
Impacts of Tax Receivable Agreements	—	—		—	—		—	—		373		—		—		—		373



Balance, September 30, 2025	127,031	$	1	35,211	$	—	2,280	$	—	$	578,256	$	162	$	78,138	$	208,472	$	865,029

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DUTCH BROS INC.

Condensed Consolidated Statements of Stockholders’ Equity (continued)


Nine Months Ended September 30, 2025

	Dutch Bros Inc. Stockholders’ Equity
	Class A Common Stock			Class B Common Stock			Class C Common Stock
(in thousands; unaudited)	Shares	Amount		Shares	Amount		Shares	Amount		Additional Paid-in-Capital		Accumulated Other Comprehensive Income		Retained Earnings		Non-Controlling Interests		Total Equity
Balance, December 31, 2024	115,432	$	1	35,227	$	—	3,545	$	—	$	517,074	$	628	$	19,666	$	226,496	$	763,865

Net income	—	—		—	—		—	—		—		—		58,472		29,648		88,120
Unrealized loss on derivative securities, effective portion, net of income tax benefit of $187	—	—		—	—		—	—		(108)		(466)		—		(311)		(885)
Equity-based compensation expense	—	—		—	—		—	—		9,567		—		—		3,946		13,513
Issuance of Class A common stock pursuant to vesting of equity awards, net of stock withheld for tax withholding obligations	335	—		—	—		—	—		(8,499)		—		—		(3,536)		(12,035)
Issuance of Class A common stock for conversion of Dutch Bros OpCo Class A common units, and for surrender and cancellation of Class C common stock, pursuant to exchange transactions	11,264	—		—	—		(1,264)	—		—		—		—		—		—
Effect of equity transactions of Dutch Bros OpCo Class A common units	—	—		—	—		—	—		40,904		—		—		(40,904)		—
Impacts of Tax Receivable Agreements	—	—		—	—		—	—		19,318		—		—		—		19,318
Reverse Split transaction pursuant to OpCo Recapitalization	—	—		(16)	—		(1)	—		—		—		—		—		—

Distributions paid to non-controlling interest holders	—	—		—	—		—	—		—		—		—		(6,867)		(6,867)
Balance, September 30, 2025	127,031	$	1	35,211	$	—	2,280	$	—	$	578,256	$	162	$	78,138	$	208,472	$	865,029

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DUTCH BROS INC.

Condensed Consolidated Statements of Stockholders’ Equity (continued)


Three Months Ended September 30, 2024

	Dutch Bros Inc. Stockholders’ Equity
	Class A Common Stock			Class B Common Stock			Class C Common Stock
(in thousands; unaudited)	Shares	Amount		Shares	Amount		Shares	Amount		Additional Paid-in-Capital		Accumulated Other Comprehensive Income		Retained Earnings (Accumulated Deficit)		Non-Controlling Interests		Total Equity
Balance, June 30, 2024	113,817	$	1	35,227	$	—	5,142	$	—	$	504,657	$	1,072	$	3,410	$	220,672	$	729,812

Net income	—	—		—	—		—	—		—		—		12,644		9,068		21,712
Unrealized loss on derivative securities, effective portion, net of income tax benefit of $247	—	—		—	—		—	—		—		(762)		—		(562)		(1,324)
Equity-based compensation expense	—	—		—	—		—	—		1,902		—		—		1,059		2,961
Issuance of Class A common stock pursuant to vesting of equity awards, net of stock withheld for tax withholding obligations	6	—		—	—		—	—		(36)		—		—		(21)		(57)

Effect of equity transactions of Dutch Bros OpCo Class A common units	—	—		—	—		—	—		8		—		—		(8)		—
Tax impacts of other equity-related transactions	—	—		—	—		—	—		254		—		—		—		254


Distributions paid to non-controlling interest holders	—	—		—	—		—	—		—		—		—		(687)		(687)
Balance, September 30, 2024	113,823	$	1	35,227	$	—	5,142	$	—	$	506,785	$	310	$	16,054	$	229,521	$	752,671

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DUTCH BROS INC.

Condensed Consolidated Statements of Stockholders’ Equity (continued)


Nine Months Ended September 30, 2024

	Dutch Bros Inc. Stockholders’ Equity
	Class A Common Stock			Class B Common Stock			Class C Common Stock			Class D Common Stock
(in thousands; unaudited)	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Additional Paid-in-Capital		Accumulated Other Comprehensive Income		Retained Earnings (Accumulated Deficit)		Non-Controlling Interests		Total Equity
Balance, December 31, 2023	69,958	$	1	60,629	$	1	35,864	$	—	10,669	$	—	$	379,391	$	544	$	(15,592)	$	311,576	$	675,921

Net income	—	—		—	—		—	—		—	—		—		—		31,646		28,437		60,083
Unrealized loss on derivative securities, effective portion, net of income tax benefit of $183	—	—		—	—		—	—		—	—		(328)		(234)		—		(303)		(865)
Equity-based compensation expense	—	—		—	—		—	—		—	—		4,866		—		—		3,354		8,220
Issuance of Class A common stock pursuant to vesting of equity awards, net of stock withheld for tax withholding obligations	71	—		—	—		—	—		—	—		1,831		—		—		(2,763)		(932)
Issuance of Class A common stock in exchange for surrender and cancellation of Class D common stock, and conversion of Dutch Bros OpCo Class A common units for surrender and cancellation of Class B and C common stock, pursuant to exchange transactions	43,794	—		(2,402)	—		(30,722)	—		(10,669)	—		—		—		—		—		—

Effect of exchange transactions of Dutch Bros OpCo Class A common units	—	—		—	—		—	—		—	—		110,093		—		—		(110,093)		—
Tax impacts of other equity-related transactions	—	—		—	—		—	—		—	—		254		—		—		—		254
Impacts of Tax Receivable Agreements	—	—		—	—		—	—		—	—		10,678		—		—		—		10,678
Class B common stock decoupled from Dutch Bros OpCo Class A common units, surrendered and cancelled	—	—		(23,000)	(1)		—	—		—	—		—		—		—		—		(1)
Distributions paid to non-controlling interest holders	—	—		—	—		—	—		—	—		—		—		—		(687)		(687)
Balance, September 30, 2024	113,823	$	1	35,227	$	—	5,142	$	—	—	$	—	$	506,785	$	310	$	16,054	$	229,521	$	752,671

See accompanying notes to condensed consolidated financial statements.

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DUTCH BROS INC.

Condensed Consolidated Statements of Cash Flows


	Nine Months Ended September 30,
(in thousands; unaudited)	2025		2024
Cash flows from operating activities:
Net income	$	88,120	$	60,083
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	83,389		67,484
Non-cash interest expense	635		834

(Gain) loss on disposal of assets	115		(1,373)
Loss on extinguishment of debt	809		—
Equity-based compensation	13,513		8,220
Deferred income taxes	14,649		15,335
Remeasurement gain on TRAs	—		(5,687)
Non-cash operating lease cost	14,959		11,334
Changes in operating assets and liabilities:
Accounts receivable, net	(3,705)		(1,238)
Inventories, net	(8,807)		8,572
Prepaid expenses and other current assets	2,800		2,894
Other long-term assets	(9,541)		(729)
Accounts payable	1,131		3,236
Accrued compensation and benefits	(522)		7,701
Other accrued liabilities	11,771		9,804
Other current liabilities	7,354		(461)
Deferred revenue	1,827		5,080

Other long-term liabilities	(8)		—
Operating lease liabilities	(2,583)		(6,894)
Net cash provided by operating activities	215,906		184,195
Cash flows from investing activities:
Purchases of property and equipment	(169,967)		(178,969)
Proceeds from disposal of fixed assets	31		9,606

Net cash used in investing activities	(169,936)		(169,363)
Cash flows from financing activities:


Payments on finance lease liabilities	(11,266)		(7,726)

Proceeds from long-term debt	250,000		150,000
Payments on long-term debt	(285,716)		(7,898)
Payments of debt issuance costs	(1,547)		—






Tax withholding payments upon vesting of equity awards	(12,035)		(932)
Distributions to non-controlling interest holders	(6,867)		(687)
Payments under tax receivable agreements	(4,698)		—
Net cash provided by (used in) financing activities	(72,129)		132,757
Net increase (decrease) in cash and cash equivalents	(26,159)		147,589
Cash and cash equivalents, beginning of period	293,354		133,545
Cash and cash equivalents, end of period	$	267,195	$	281,134

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DUTCH BROS INC.

Condensed Consolidated Statements of Cash Flows (continued)


	Nine Months Ended September 30,
(in thousands; unaudited)	2025		2024
Supplemental disclosure of cash flow information
Interest paid	$	29,196	$	29,125
Income taxes paid	900		1,824
Supplemental disclosure of noncash investing and financing activities

Additions of property and equipment accrued as of end of period	19,180		13,155

See accompanying notes to condensed consolidated financial statements.

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DUTCH BROS INC.

Index for Notes to Condensed Consolidated Financial Statements


Note						Page
NOTE 1 — Organization and Background						14
NOTE 2 — Basis of Presentation and Summary of Significant Accounting Policies						14
NOTE 3 — Revenue Recognition						16
NOTE 4 — Organization Realignment and Restructurings						17

NOTE 5 — Inventories						18
NOTE 6 — Property and Equipment						18
NOTE 7 — Intangible Assets						19
NOTE 8 — Leases						20
NOTE 9 — Debt						21

NOTE 10 — Derivative Financial Instruments						22

NOTE 11 — Income Taxes						23
NOTE 12 — Equity-Based Compensation						25

NOTE 13 — Non-Controlling Interests						26
NOTE 14 — Income Per Share						28
NOTE 15 — Commitments and Contingencies						29
NOTE 16 — Related Party Transactions						31
NOTE 17 — Segment Reporting						31

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DUTCH BROS INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 1 — Organization and Background

Business

Dutch Bros Inc., a Delaware corporation, together with its subsidiaries (the Company, we, us, or our, collectively) is in the business of operating and franchising drive-thru coffee shops as well as the wholesale and distribution of coffee, coffee-related products, and accessories. As of September 30, 2025, there were 1,081 shops in operation in 24 U.S. states, of which 759 were company-operated and 322 were franchised.

Organization

Dutch Bros Inc. is the sole managing member of Dutch Bros OpCo and operates and controls all of the business and affairs of Dutch Bros OpCo. As a result, Dutch Bros Inc. consolidates the financial results of Dutch Bros OpCo and reports a non-controlling interest representing the economic interest in Dutch Bros OpCo held by the other members of Dutch Bros OpCo. The Company’s fiscal year end is December 31. As of September 30, 2025, Dutch Bros Inc. held 100.0% of the voting interest and 71.6% of the economic interest of Dutch Bros OpCo. The Continuing Members held no voting interest and the remaining 28.4% of the economic interest of Dutch Bros OpCo.

Dutch Bros OpCo Recapitalization

From time to time, Dutch Bros Inc. receives cash distributions from Dutch Bros OpCo pursuant to the OpCo LLC Agreement. Dutch Bros Inc. may then loan any cash in excess of its liabilities back to Dutch Bros OpCo for operations, under the open-ended balance Subordinated Intercompany Note, between Dutch Bros OpCo and Dutch Bros Inc., dated February 28, 2022 (the Intercompany Note).

On February 7, 2025, Dutch Bros Inc. entered into a subscription agreement with Dutch Bros OpCo, pursuant to which Dutch Bros OpCo issued 51,942 newly authorized Dutch Bros OpCo Class A common units to Dutch Bros Inc. in exchange for satisfaction of the outstanding balance of the Intercompany Note, which at that time was approximately $3.5 million.

In accordance with the OpCo LLC Agreement, all outstanding Dutch Bros OpCo Class A common units were then recapitalized through a reverse unit split (the Reverse Split) in order to maintain a one-to-one ratio between the number of Dutch Bros OpCo Class A common units owned by Dutch Bros Inc. and the number of outstanding shares of Class A common stock. Consequently, 15,734 outstanding shares of Class B common stock, and 1,220 outstanding shares of Class C common stock, that were paired with Dutch Bros OpCo Class A common units eliminated as a result of the Reverse Split, were cancelled.

NOTE 2 — Basis of Presentation and Summary of Significant Accounting Policies

Financial Statements Presentation

Our condensed consolidated financial statements as of September 30, 2025 and for the three and nine months ended September 30, 2025 and 2024 have been prepared in accordance with GAAP and pursuant to the rules and regulations of the SEC, consistent in all material respects with those applied in the 2024 Form 10-K and as updated by this Form 10-Q.

We have made estimates and judgments affecting the amounts reported in its condensed consolidated financial statements and the accompanying notes. Although management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, actual results could differ from those estimates. This report should be read in conjunction with the consolidated financial statements in the 2024 Form 10-K that includes additional information on accounting estimates, policies, and the methods and assumptions used in its estimates.

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In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly our consolidated financial statements for the periods presented. Operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2025.

Significant Accounting Policies Updates

There have been no material updates to our significant accounting policies during the nine months ended September 30, 2025 from those previously reported in the 2024 Form 10-K.

Recently Issued Accounting Standards

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The intent of this ASU is to address businesses’ shift from using prescriptive and sequential software development methods to using incremental and iterative development methods. The amendments in this ASU remove all references to prescriptive and sequential software development stages, and also provides criteria for when an entity is required to start capitalizing software costs. ASU 2025-06 is effective for all entities' annual reporting periods beginning after December 15, 2027, and interim periods within those annual reporting periods using a prospective transition, modified transition or retrospective transition approach. Early adoption is permitted as of the beginning of an annual reporting period. We will assess potential impacts of this standard on our disclosures in future periods.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). The intent of this ASU is to improve public entity financial footnote disclosures around types of expenses in commonly presented expense categories (i.e., cost of sales; selling, general, and administrative expense; and research and development expense). The amendments in this ASU do not change or remove current expense disclosure requirements, but rather 1) impact where this information appears in the notes to the consolidated financial statements and 2) add additional disclosure requirements for certain expense line items appearing on the face of our consolidated statements of operations. ASU 2024-03, as amended, is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently assessing potential impacts of this standard on our business processes and future disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update are intended to enhance the transparency and decision usefulness of income tax disclosures, primarily through improvements to the rate reconciliation and income taxes paid information, specifically requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation, and (2) income taxes paid disaggregation by jurisdiction. These amendments are effective for public business entities' annual periods beginning after December 15, 2024 and interim periods within fiscal years beginning after December 15, 2025, and should be applied on a prospective basis. Early adoption is permitted for annual financial statements that have not yet been issued. We expect to provide additional detail and disclosures under the new guidance in our Form 10-K to be filed for the year ending December 31, 2025.

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NOTE 3 — Revenue Recognition

Revenue

The following table disaggregates revenue by major component:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2025		2024		2025		2024
Company-operated shops	$	392,833	$	308,295	$	1,099,754	$	851,648
Franchising	29,122		28,694		89,787		82,545
Other	1,629		1,223		5,008		4,036
Total revenues	$	423,584	$	338,212	$	1,194,549	$	938,229

Deferred Revenue

Components of our deferred revenue liability are as follows:


(in thousands)	September 30, 2025		December 31, 2024
Gift card and loyalty programs	$	50,226	$	48,265
Other deferred revenue, net 1	2,484		2,618

Total deferred revenue	$	52,710	$	50,883

_______________

1 Other deferred revenue, net, are primarily unearned franchise fees.

Deferred revenue activity was as follows:


	Nine Months Ended September 30,
(in thousands)	2025		2024
Beginning balance	$	50,883	$	37,025
Revenue deferred 1	405,087		312,963
Revenue recognized 2	(403,126)		(308,012)


Other deferred revenue, net	(134)		129
Ending balance	52,710		42,105
Less: current portion	(45,606)		(35,738)
Deferred revenue, net of current portion	$	7,104	$	6,367

_______________

1 Revenue deferred includes gift card activations, loyalty app cash loads and loyalty points and rewards earned.

2 Revenue recognized includes redemptions of gift cards, loyalty app and loyalty rewards, and breakage.

Revenue recognized during the three and nine months ended September 30, 2025 and 2024, respectively, that was included in the respective deferred revenue liability balances at the beginning of the period are shown below.


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2025		2024		2025		2024
Gift card redemptions 1	$	756	$	637	$	7,163	$	5,737
Earned franchise fees	110		112		337		336

_____________________

1 Amounts exclude cash loads and transactions related to our loyalty rewards program.

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Future recognition of initial unearned franchise fees as of September 30, 2025 is as follows:


(in thousands)
Remainder of 2025	$	111
2026	418
2027	373
2028	324
2029	279

Thereafter	979
Total	$	2,484

NOTE 4 — Organization Realignment and Restructurings

On January 29, 2024, our Board of Directors approved an organizational realignment and restructuring plan to expand support operations at our Phoenix, Arizona office. As part of this large-scale initiative, we relocated certain support center staff from our Grants Pass, Oregon headquarters to the Phoenix office. As of March 31, 2025, this initiative was substantially complete, including the build-out and move into our new Phoenix office location. We incurred total aggregate charges of approximately $19.1 million related to this initiative, consisting of (i) approximately $16.6 million in employee-related costs, including relocation, retention and transition costs, termination benefits, and duplicate transition wages and benefits; and (ii) approximately $2.5 million in other costs, including the donation of a building, consulting fees, and duplicate rent. Substantially all of the charges have resulted in current or expected future cash expenditures.

On May 13, 2025, our Board of Directors approved the plan for an additional restructuring program, primarily related to the relocation and streamlining of our remaining back-office operations from our former Grants Pass, Oregon headquarters to our newly-designated Phoenix office corporate headquarters. Affected employees were either offered an opportunity to relocate and continue employment in the Phoenix office or were offered a severance package; these communications were largely completed by May 20, 2025. For this program, we expect to incur total aggregate charges of approximately $8.5 million, consisting of (i) employee-related costs, including relocation, retention and transition costs, termination benefits, and duplicate transition wages and benefits; and (ii) other costs, including consulting fees. Substantially all of the estimated charges are expected to result in current and future cash expenditures. We expect that by December 31, 2025, substantially all of our headquarters employees will be located in our Phoenix office.

During the three and nine months ended September 30, 2025 and 2024, we recorded restructuring charges for employee-related and other costs in selling, general and administrative expenses on the condensed consolidated statements of operations as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2025		2024		2025		2024
Relocation and travel costs	$	1,122	$	2,217	$	1,903	$	9,710
Termination benefits	1,362		1,781		3,324		3,577
Total employee-related costs	2,484		3,998		5,227		13,287

Duplicate rent	—		193		244		223
Consulting	166		—		170		—
Total other costs	166		193		414		223
Total restructuring costs incurred	$	2,650	$	4,191	$	5,641	$	13,510

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As of September 30, 2025 and December 31, 2024, the accruals for corporate restructuring costs are included in accounts payable, accrued compensation and benefits, and accrued expenses on the condensed consolidated balance sheets. The following table summarizes the activity for the restructuring liabilities during the nine months ended September 30, 2025:


(in thousands)	Liability, December 31, 2024		Charges		Cash Payments		Liability, September 30, 2025
Relocation and travel costs	$	698	$	1,903	$	(2,545)	$	56
Termination benefits	2,028		3,324		(3,447)		1,905
Total employee-related costs	2,726		5,227		(5,992)		1,961
Duplicate rent	—		244		(244)		—
Consulting	55		170		(191)		34

Total other costs	55		414		(435)		34
Totals	$	2,781	$	5,641	$	(6,427)	$	1,995

NOTE 5 — Inventories

Inventories, net consist of the following:



(in thousands)	September 30, 2025		December 31, 2024
Raw materials	$	21,835	$	14,594
Finished goods	23,460		21,894
Total inventories	$	45,295	$	36,488

NOTE 6 — Property and Equipment

Property and equipment, net consists of the following:



(dollars in thousands)	Useful Life (Years)			September 30, 2025		December 31, 2024
Software	3			$	13,676	$	10,666

Equipment and fixtures	3	—	7	254,859		229,307
Leasehold improvements	5	—	15	63,864		54,535
Buildings	10	—	39	574,221		487,060
Land	N/A			7,022		7,022

Construction-in-progress 1	N/A			113,571		71,951
Property and equipment, gross				1,027,213		860,541
Less: accumulated depreciation				(237,880)		(176,570)
Property and equipment, net				$	789,333	$	683,971

_______________

1 Construction-in-progress primarily consists of construction and equipment costs for new and existing shops.

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Depreciation expense included in our condensed consolidated statements of operations was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2025		2024		2025		2024
Cost of sales	$	20,901	$	16,556	$	59,808	$	45,579
Selling, general, and administrative	914		373		2,102		841
Total depreciation expense	$	21,815	$	16,929	$	61,910	$	46,420

NOTE 7 — Intangible Assets

The details of the intangible assets are as follows:



(dollars in thousands)	Weighted-average amortization period (in years)	September 30, 2025		December 31, 2024
Reacquired franchise rights	3.0	$	27,049	$	27,049
Less: accumulated amortization		(25,287)		(24,102)
Intangibles, net		$	1,762	$	2,947

Amortization expense included in our condensed consolidated statements of operations was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2025		2024		2025		2024
Cost of sales	$	272	$	508	$	1,185	$	1,960

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NOTE 8 — Leases

The components of lease costs, excluding short-term lease costs and sublease income (both immaterial for the periods presented), were as follows:


	Statements of Operations Classification	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)		2025		2024		2025		2024
Finance lease costs
Amortization of right-of-use assets	Cost of sales	$	6,969	$	6,429	$	20,254	$	19,059
Amortization of right-of-use assets	Selling, general, and administrative	10		15		40		45
Interest on lease liabilities	Interest expense	5,896		5,541		17,234		16,499
Total finance lease costs		12,876		11,985		37,529		35,603

Operating lease costs
Lease expenses	Cost of sales	10,851		7,656		29,170		20,568
Lease expenses	Selling, general, and administrative	709		680		2,108		959
Total operating lease costs		11,560		8,336		31,278		21,527



Variable lease costs	Cost of sales	2,552		1,747		6,977		4,871
Total lease costs		$	26,988	$	22,068	$	75,784	$	62,001

Supplemental cash flow information related to leases is as follows for the periods presented:


	Nine Months Ended September 30,
(in thousands)	2025		2024
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases	$	17,234	$	16,499
Operating cash flows from operating leases1	18,904		17,086
Financing cash flows from finance leases	11,266		7,726
Right-of-use assets obtained in exchange for lease obligations
Finance leases	34,783		12,520
Operating leases	110,050		112,579

_______________

1 For the nine months ended September 30, 2025, the amount presented is net of a $5.4 million tenant improvement allowance received from the landlord related to our Arizona headquarters office lease.

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NOTE 9 — Debt

Credit Facility

On May 29, 2025 (the Effective Date), we amended and restated our existing $650 million senior secured credit facility, dated February 28, 2022 (as previously amended, the 2022 Credit Facility), with JPMorgan Chase Bank, N.A. as administrative agent (Administrative Agent) and other financial institutions as the lenders party thereto (the 2025 Credit Facility). The 2025 Credit Facility consists of a $500 million revolving credit facility and a term loan facility of up to $150 million. The 2025 Credit Facility also includes sublimits for letters of credit and swingline loans of up to $100 million and $20 million, respectively. The 2025 Credit Facility expires on May 29, 2030 (the Maturity Date). It also contains an option allowing the Loan Parties to increase the size of the 2025 Credit Facility by up to an additional (i) $230 million or (ii) 80% of EBITDAR, whichever is greater, with the agreement of the Administrative Agent and the applicable lenders party thereto.

On the Effective Date, we drew the full $150 million in term loan and $50 million in revolving loans under the 2025 Credit Facility, and all outstanding debt under the 2022 Credit Facility was repaid. As a result of the amendment and restatement, we recognized a loss on debt extinguishment of approximately $2.0 million, comprised of: (i) approximately $1.2 million of fees to intermediaries and other costs related to the 2025 Credit Facility, and (ii) the write-off of approximately $0.8 million unamortized loan costs related to the 2022 Credit Facility. These expenses were recognized in Other income (expense), net on our condensed consolidated statements of operations. In addition, we capitalized approximately $1.5 million of debt issuance costs related to the 2025 Credit Facility in Long-term debt, net of current portion on our condensed consolidated balance sheets.

Interest on borrowings under the 2025 Credit Facility is based on (i) the Alternate Base Rate plus an applicable margin, or (ii) the Term SOFR Rate plus an applicable margin (each as defined in the 2025 Credit Facility), and is payable in accordance with the selected interest rate period and upon maturity. Principal payments for the term loans are required on a quarterly basis in accordance with an amortization schedule up through and including the Maturity Date.

We are required to pay a commitment fee on a quarterly basis, at a per annum rate of between 0.20% and 0.45%, depending on the Net Lease-Adjusted Total Leverage Ratio (as defined in the 2025 Credit Facility), based on the average daily unused portion of the revolving credit facility. These fees are recorded as interest expense on our condensed consolidated statements of operations.

The 2025 Credit Facility contains financial covenants that require us to not exceed a maximum Net Lease-Adjusted Total Leverage Ratio and maintain a minimum Coverage Ratio (as defined in the 2025 Credit Facility). The 2025 Credit Facility also contains certain negative covenants that, among other things, restrict our ability to incur additional debt, grant liens on assets, merge with or acquire other companies, make other investments, dispose of assets, and make restricted payments. Obligations under the 2025 Credit Facility are guaranteed by Dutch Bros OpCo and its subsidiaries, and secured by a first priority perfected security interest in substantially all of the assets of the guarantors.

As of September 30, 2025, $50.0 million was outstanding on our revolving credit facility, and $438.3 million was available for borrowing, net of $11.7 million in letters of credit, and approximately $149.1 million of principal was outstanding on the term loan facility. The revolving loan and term loan both bear interest at approximately 5.83% as of September 30, 2025, excluding any impacts from our interest rate swap. We were in compliance with our financial covenants as of that date.

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Long-Term Debt

Our long-term debt consisted of the following for the periods presented:



(in thousands)	September 30, 2025		December 31, 2024
Term loan under credit facility	$	149,063	$	234,688
Revolving loan under credit facility	50,000		—
Finance obligations1	3,022		3,022
Unsecured note payable	208		299
Total debt	202,293		238,009
Less: loan origination fees	(2,417)		(943)
Less: current portion	(3,879)		(17,311)
Total long-term debt, net of current portion	$	195,997	$	219,755

_______________

1 Represents failed sale-leaseback arrangements.

Future annual maturities of long-term debt as of September 30, 2025 are as follows:


(in thousands)
Remainder of 2025	$	970
2026	3,881
2027	5,670
2028	7,500
2029	11,250

Thereafter	173,022
Total	$	202,293

NOTE 10 — Derivative Financial Instruments

We have a receive-variable (Receive Leg), pay-fixed (Pay Leg) interest rate swap with JPMorgan Chase Bank, N.A. As of September 30, 2025, the interest rate swap had a notional amount of approximately $60.4 million and hedges interest rate risk on the term loan under the 2025 Credit Facility. The interest rate swap matures on February 28, 2027, and has a fixed rate of 2.67% per annum for the Pay Leg. The variable rate on the Receive Leg of the interest rate swap is the one-month adjusted term SOFR plus an applicable margin. As of September 30, 2025, the one-month adjusted term SOFR was 4.16%.

Our interest rate swap has been designated as a cash flow hedge, and as such, we record the change in fair value for the effective portion of the interest rate swap in AOCI rather than in current period earnings until the underlying hedged transaction affects earnings. As of September 30, 2025, we expect to reclassify a gain of approximately $0.6 million from AOCI to earnings within the next twelve months.

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Designated as a Level 2 instrument within the fair value hierarchy, the fair value and effect of the derivative instrument included in our condensed consolidated financial statements was as follows:


(in thousands)	Balance Sheets Classification	September 30, 2025		December 31, 2024
Derivative instrument designated as cash flow hedge
Interest rate swap contract	Prepaid expenses and other current assets	$	596	$	953
Interest rate swap contract	Other long-term assets	115		832
Total derivative instrument designated as cash flow hedge		$	711	$	1,785


		Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	Financial Statements Classification	2025		2024		2025		2024
Derivative instrument designated as cash flow hedge
Income (loss) recognized in other comprehensive income before reclassifications	Statements of Comprehensive Income	$	51	$	(1,111)	$	(124)	$	673
Reclassification from accumulated other comprehensive income to earnings for the effective portion	Statements of Operations - Interest expense, net	(278)		(460)		(840)		(1,393)
Income tax benefit	Statements of Operations - Income tax expense	40		247		187		183

The amendment to our credit facility, as discussed in NOTE 9 — Debt, had no impact on our interest rate swap derivative.

NOTE 11 — Income Taxes


	Three Months Ended September 30,						Nine Months Ended September 30,
(dollars in thousands)	2025			2024			2025			2024
Income tax expense	$	7,661		$	4,698		$	16,363		$	17,330
Effective tax rate	21.9		%	17.8		%	15.7		%	22.4		%

The effective tax rate for the quarter ended September 30, 2025, was 21.9%, which reflects the US federal statutory rate of 21% on pre-tax income, increased by the impact of state income taxes and offset by the tax benefits of federal tax credits and income attributable to non-controlling interests. The increase in the effective tax rate from 17.8% in the same period in 2024 is primarily due to an increase in valuation allowance related to charitable contributions.

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The effective tax rate for the nine months ended September 30, 2025, was 15.7%, which reflects the US federal statutory rate of 21% on pre-tax income, offset by the tax benefits of federal tax credits, income attributable to non-controlling interests, and stock compensation windfall benefits realized during the quarter. The decrease in the effective tax rate from 22.4% in the same period in 2024 is due to tax deductions related to stock-based compensation, as well as the impact of changes in state rates and apportionment on deferred taxes.

In accordance with ASC 740, the effects of changes in tax rates and laws are recognized in the period in which the legislation is enacted. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the United States. The OBBBA includes significant provisions, including the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act and the restoration of favorable tax treatment for specific business provisions. The legislation has multiple effective dates, with some provisions taking effect in 2025 and others phased in through 2027. The permanent extension of bonus depreciation provisions in the OBBBA prompted a reassessment of the realizability of our charitable contribution carryforwards during the quarter resulting in the recording of an additional valuation allowance of $1.7 million.

Tax Receivable Agreements

In connection with our IPO, we executed two TRAs which require payment to certain Dutch Bros OpCo owners of 85% of the income tax benefits, if any, that we actually realize or in some cases is deemed to realize (calculated using certain assumptions) as a result of certain tax attributes and benefits covered by the TRAs.

The TRAs-related liabilities are classified on our condensed consolidated balance sheets as current or non-current based on the expected date of payment under the captions “Current portion of tax receivable agreements liability” and “Tax receivable agreements liability, net of current portion,” respectively.

As of September 30, 2025, our total TRAs-related liabilities were $825.8 million. The changes related to these liabilities were as follows:


(in thousands)	September 30, 2025		December 31, 2024
Beginning balance	$	627,834	$	290,920
Additions (reductions) to TRAs:
Exchange of Dutch Bros OpCo Class A common units for Class A common stock	202,680		341,161
Payments under TRA	(4,698)		—
TRAs remeasurements 1	—		(4,247)

Ending balance	$	825,816	$	627,834
Less: current portion	(514)		(71)
TRAs liability, net of current portion	$	825,302	$	627,763

_________________

1 Impact primarily related to state tax rates and adjustments from previous estimates upon finalization of the tax attributes subject to the TRAs.

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NOTE 12 — Equity-Based Compensation

Restricted Stock Units

RSU activity was as follows:


(in thousands, except per share amounts)	Restricted Stock Units	Weighted-average grant date fair value per share





Balance, December 31, 2024	1,211	$	32.38

New grants	304	78.48
Vested	(489)	34.60
Forfeitures	(164)	39.78
Balance, September 30, 2025	862	$	45.97

PSU activity was as follows:


(in thousands, except per share amounts)	Performance - Based Stock Units	Weighted-average grant date fair value per share





Balance, December 31, 2024	—	$	—

New grants	63	132.96

Forfeitures	(7)	132.96
Balance, September 30, 2025	56	$	132.96

Total release date fair value of vested equity awards for the nine months ended September 30, 2025 and 2024 are presented below:


	Nine Months Ended September 30,
(in thousands, except per share amounts)	2025			2024
	Awards/units	W/A vest date fair value		Awards/units	W/A vest date fair value
RSAs	—	$	—	39,752	$	30.99
RSUs	37,988	77.69		3,197	31.34

Equity-Based Compensation

Equity-based compensation expense is recognized on a straight-line basis and is included in our condensed consolidated statements of operations as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2025		2024		2025		2024
Cost of sales	$	572	$	273	$	1,547	$	637
Selling, general, and administrative expenses	4,076		2,688		11,966		7,583
Total stock-based compensation expense	$	4,648	$	2,961	$	13,513	$	8,220

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As of September 30, 2025, total unrecognized stock-based compensation related to unvested RSUs and PSUs was $34.3 million, which will be recognized as follows:


(in thousands)
Remainder of 2025	$	4,947
2026	16,439
2027	10,655
2028	2,213



Total unrecognized stock-based compensation	$	34,254

NOTE 13 — Non-Controlling Interests

Dutch Bros Inc. is the sole managing member of Dutch Bros OpCo, and, as a result, consolidates the financial results of Dutch Bros OpCo. We report a non-controlling interest representing the economic interest in the Dutch Bros OpCo held by the other members of Dutch Bros OpCo. The OpCo LLC Agreement provides that holders of Dutch Bros OpCo Class A common units may, from time to time, require Dutch Bros OpCo to redeem all or a portion of their Dutch Bros OpCo Class A common units for newly issued shares of Class A common stock on a one-for-one basis. In connection with any redemption or exchange, Dutch Bros Inc. will receive a corresponding number of Dutch Bros OpCo Class A common units, increasing Dutch Bros Inc.’s total ownership in Dutch Bros OpCo. Changes in Dutch Bros Inc.’s ownership in Dutch Bros OpCo, while Dutch Bros Inc. retains its controlling interest in Dutch Bros OpCo, will be accounted for as equity transactions. As such, future redemptions or direct exchanges of Dutch Bros OpCo Class A common units by the other members of Dutch Bros OpCo will result in a change in ownership and reduce the amount recorded as non-controlling interest and increase additional paid-in-capital.

The following table summarizes the ownership interest in Dutch Bros OpCo¹:


	September 30, 2025
(units in thousands)	OpCo Units	Ownership %
Dutch Bros OpCo Class A common units held by Dutch Bros Inc.	127,031	71.6	%
Dutch Bros OpCo Class A common units held by non-controlling interest holders	50,481	28.4	%
Total Dutch Bros OpCo Class A common units outstanding	177,512	100.0	%

_______________

1 Dutch Bros OpCo effected a recapitalization on February 7, 2025. For additional information, refer to NOTE 1 — Organization and Background.

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The following table summarizes the effect of changes in ownership of Dutch Bros OpCo on our equity for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2025		2024		2025		2024
Net income attributable to Dutch Bros Inc.	$	17,495	$	12,644	$	58,472	$	31,646
Other comprehensive loss:
Unrealized loss on derivative securities, effective portion, net of income tax impacts	(122)		(762)		(466)		(234)
Transfers from (to) non-controlling interests:


Increase in additional paid-in capital as a result of equity-based compensation	3,326		1,902		9,567		4,866
Increase (decrease) in additional paid-in capital as a result of common stock issuances pursuant to vesting of equity awards, net of stock withheld for tax	(728)		(36)		(8,499)		1,831

Increase in additional paid-in capital as a result of the acquisition of Dutch Bros OpCo Class A common units	45		8		40,904		110,093
Total effect of changes in ownership interest on equity attributable to Dutch Bros Inc.	$	20,016	$	13,756	$	99,978	$	148,202

The weighted-average ownership percentage for the applicable reporting period is used to attribute net income to Dutch Bros Inc. and the non-controlling interest holders. The non-controlling interest holders’ weighted-average ownership percentage were as follows for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Weighted-average ownership percentage of non-controlling interest holders	28.5	%	35.8	%	29.7	%	43.7	%

Under the OpCo LLC Agreement, Dutch Bros OpCo is required to make certain distributions to its members with regard to tax obligations. Such distributions paid to members were as follows for the periods presented, and no amounts were payable as of the periods then ended.


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2025		2024		2025		2024
Amounts paid to non-controlling interest holders	$	—	$	687	$	6,867	$	687

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NOTE 14 — Income Per Share

The following tables set forth the numerators and denominators used to compute basic and diluted net income per share of Class A and Class D common stock for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2025		2024		2025		2024
Numerator:
Net income	$	27,283	$	21,712	$	88,120	$	60,083

Less: Net income attributable to non-controlling interests	9,788		9,068		29,648		28,437
Net income attributable to Dutch Bros Inc.	$	17,495	$	12,644	$	58,472	$	31,646


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2025		2024		2025		2024
Basic net income per share attributable to common stockholders
Numerator:
Net income attributable to Dutch Bros Inc.	$	17,495	$	12,644	$	58,472	$	31,646

Denominator:
Weighted-average number of shares of Class A and Class D common stock outstanding - basic ¹	126,986		113,819		124,751		99,756




Basic net income per share attributable to common stockholders ¹	$	0.14	$	0.11	$	0.47	$	0.32

_______________

1 Class D common shares were included in net income per share and weighted-average number of shares calculations in periods prior to June 2024. As of June 2024, all Class D common shares were converted to Class A common shares.

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	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2025		2024		2025		2024
Diluted net income per share attributable to common stockholders
Numerator:
Undistributed net income for basic computation	$	17,495	$	12,644	$	58,472	$	31,646
Increase in net income attributable to common stockholders upon conversion of potentially dilutive instruments	22		22		76		50
Allocation of undistributed net income	$	17,517	$	12,666	$	58,548	$	31,696

Denominator:
Number of shares used in basic computation	126,986		113,819		124,751		99,756
Add: weighted-average effect of dilutive securities
RSAs	—		—		—		12
RSUs	393		433		453		302
Weighted-average number of shares of Class A and Class D common stock outstanding used to calculate diluted net income per share ¹	127,379		114,252		125,204		100,070
Diluted net income per share attributable to common stockholders ¹	$	0.14	$	0.11	$	0.47	$	0.32

_______________

The following Class A common stock equivalents were excluded from diluted net income per share in the periods presented because they were anti-dilutive:


	Three Months Ended September 30,		Nine Months Ended September 30,
(in thousands)	2025	2024	2025	2024

RSUs	264	160	203	481
PSUs	71	—	61	—
Total anti-dilutive securities	335	160	264	481

NOTE 15 — Commitments and Contingencies

Purchase Obligations

We enter into fixed-price and price-to-be-fixed green coffee purchase commitments. For both fixed-price and price-to-be-fixed purchase commitments, we expect to take delivery of green coffee and to utilize the coffee in a reasonable period of time in the ordinary course of business. Such contracts are used for the normal purchases of green coffee and not for speculative purposes. We do not enter into futures contracts or other derivative instruments related to our green coffee purchase commitments.

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Guarantees

We periodically provide guarantees to franchise partners for lease payments. As of September 30, 2025 and December 31, 2024, we had guaranteed approximately $7.9 million and $8.2 million, respectively, in franchise partners’ lease payments and have not established a liability for these guarantees as any liability arising from the guarantees is not material to the condensed consolidated financial statements.

Legal Proceedings

The Company is a party to routine legal actions arising in the ordinary course of and incidental to its business. These claims, legal proceedings, and litigation principally arise from alleged casualty, employment, and other disputes.

In determining loss contingencies, the Company considers the likelihood of loss as well as the ability to reasonably estimate the amount of such loss or liability. An estimated loss is recognized when it is considered probable that a liability has been incurred and when the amount of loss can be reasonably estimated.

Because litigation is inherently unpredictable, assessing contingencies is highly subjective and requires judgments about future events. When evaluating litigation contingencies, we may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, developments in legislation or regulations that affect the validity of certain claims and defenses, the availability of appellate remedies, insurance coverage related to the claim or claims in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matter.

Any claim, proceeding, or litigation has an element of uncertainty, and an unfavorable outcome may have a material adverse effect on the Company’s financial condition, results of operations, or cash flows.

Liabilities Under Tax Receivable Agreements

Under the TRAs, Dutch Bros Inc. is contractually committed to pay the non-controlling interest holders 85% of the amount of any tax benefits that Dutch Bros Inc. actually realizes, or in some cases is deemed to realize, as a result of certain transactions. As of September 30, 2025, Dutch Bros Inc. recognized $825.8 million of liabilities related to its obligations under the TRAs. Refer to NOTE 11 — Income Taxes for additional information.

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NOTE 16 — Related Party Transactions

Related party transactions were as follows for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2025		2024		2025		2024
Distributions and TRA payments to Co-Founder and Sponsor ¹	$	—	$	687	$	11,565	$	687
Sales of Company Aircraft ²:
Sales price	—		869		—		9,545
Net book value	—		319		—		8,243
Gain on disposal of Aircraft	—		550		—		1,302
Donations to Dutch Bros Foundation	63		63		2,188		1,688

_______________

1 See NOTE 11 — Income Taxes and NOTE 13 — Non-Controlling Interests for further information.

2 In June 2024 and July 2024, respectively, we sold our airplane, and hangar and related equipment (collectively, the Aircraft), to the Co-Founder.

The Dutch Bros Foundation is a not-for-profit organization founded by our Company that provides philanthropy to local communities. Our Vice Chair, Chief Financial Officer, Chief People Officer, and Chief Legal Officer serve on the board of directors, our Vice Chair serves as the President, and our Chief Legal Officer serves as the Secretary-Treasurer.

NOTE 17 — Segment Reporting

Segment information is prepared on the same basis that our CEO, who is the CODM, manages the segments, evaluates financial results and makes key operating decisions. Our CEO evaluates financial performance based on two operating segments, which offer distinct products and services to different customers: Company-operated shops and Franchising and other. The Company-operated shops segment includes retail coffee shop sales to end consumers. The Franchising and other segment includes bean and product sales to franchise partners, initial franchise fees, royalties, and marketing fees related to the franchise partners, as well as sales of products through our website.

The CODM reviews segment performance and allocates resources based upon segment contribution, which is defined as segment gross profit before depreciation and amortization. Segment contribution is used to monitor and assess segment results compared to prior periods, forecasted results, and our annual operating plan.

All segment revenue is earned in the United States. All intercompany sales amongst the Dutch Bros entities are fully eliminated in consolidation. Further, there are no intersegment revenues. The CODM does not evaluate operating segments using discrete asset information.

Selling, general and administrative expenses primarily consist of unallocated corporate expenses. Unallocated corporate expenses include corporate administrative functions that support the segments but are not directly attributable to or managed by any segment and are not included in the reported financial results of the segments.

No changes have been made to our segments during the three and nine months ended September 30, 2025. In addition, no customer represented 10% or more of total revenue for the three and nine months ended September 30, 2025 and 2024.

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Financial information for our reportable segments was as follows for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2025		2024		2025		2024
Revenues
Company-operated shops	$	392,833	$	308,295	$	1,099,754	$	851,648
Franchising and other	30,751		29,917		94,795		86,581
Total revenues	423,584		338,212		1,194,549		938,229
Cost of sales
Company-operated shops
Beverage, food & packaging	101,875		78,060		279,722		216,923
Labor costs	108,098		85,144		298,807		230,807
Occupancy & other costs	66,696		50,693		180,607		136,466
Pre-opening costs	6,933		3,551		17,086		11,552

Franchising and other	5,061		7,221		20,265		23,704
Segment cost of sales1	288,663		224,669		796,487		619,452
Segment contribution
Company-operated shops	109,231		90,847		323,532		255,900
Franchising and other	25,690		22,696		74,530		62,877
Total segment contribution	$	134,921	$	113,543	$	398,062	$	318,777





Segment depreciation and amortization	(28,142)		(23,492)		(81,246)		(66,596)


Selling, general and administrative	(65,289)		(57,536)		(189,595)		(161,866)
Interest expense, net	(6,695)		(6,869)		(20,886)		(20,259)
Other income (expense), net	149		764		(1,852)		7,357
Income before income taxes	$	34,944	$	26,410	$	104,483	$	77,413

__________________

1 Segment cost of sales for this presentation excludes the impact of depreciation and amortization.

Dutch Bros Inc.| Form 10-Q | 32

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Index to Management’s Discussion and Analysis of Financial Condition and Results of Operations


Section						Page
Overview and Highlights						34
Impact of Global Events						34
Results of Operations						35

Key Performance Indicators						36
Company-operated Shops Results						38
Franchising and Other Segment Performance						41
Selling, General, and Administrative						41
Other Expense						42
Income Tax Expense						42
Liquidity and Capital Resources						43
Non-GAAP Financial Measures						45

Dutch Bros Inc.| Form 10-Q | 33

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Overview

Dutch Bros is a high growth operator and franchisor of drive-thru shops that focus on serving high QUALITY, hand-crafted beverages with unparalleled SPEED and superior SERVICE. Founded in 1992 by brothers Dane and Travis Boersma, Dutch Bros began with a double-head espresso machine and a pushcart in Grants Pass, Oregon. Today, we believe that Dutch Bros is one of the fastest-growing brands in the quick service beverage industry in the United States.

Impact of Global Events

General Macroeconomic Uncertainties

As a retailer that is dependent upon consumer discretionary spending, our results of operations are sensitive to changes in macroeconomic conditions. Inflation, coupled with a rise in the U.S. unemployment rate, may have a material adverse effect on our business, financial condition or results of operations. Our customers may have or in the future may have less money available for discretionary purchases and may reduce or stop purchasing our products.

On a macro level, conditions, including changes in tariffs, tax laws, interest rates, inflation, geopolitical conflicts, and significant weather events (such as the 2025 wildfires in California), have created significant uncertainty in the global economy. While we are not able to fully predict the potential impacts of these conditions, we do not currently believe any potential impacts of these macroeconomic conditions would be material to our business.

Minimum Wage Increases

We continued to experience the effects of legislated minimum wage increases that took effect in 2024 in certain states. We expect these pressures to continue to affect our operating results in the foreseeable future. For example, California’s minimum wage increased to $20 per hour effective April 2024 for covered employees in our industry. Additionally, several other states that we operate in have increased their minimum wage requirements in 2025. While these pressures have impacted our operating results, we have taken measures to gradually increase our menu prices, adjust our Dutch Rewards loyalty program, and make operating adjustments that increase productivity to help offset them. Menu price increases may lead to decreases in consumer demand. We will continue to evaluate further pricing actions to protect our operating results, however, if there is a time lag between increasing costs and our ability to increase menu prices or take other action in response, or if we choose not to pass on the cost increases by increasing menu prices, our operating results could be negatively affected.

Dutch Bros Inc.| Form 10-Q | 34

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Results of Operations

As of September 30, 2025, we had 1,081 systemwide shops in 24 states, an increase of approximately 13.8% from the same period in the prior year. For the three months ended September 30, 2025, we generated $423.6 million of revenue, $27.3 million of net income, and $0.14 of income per diluted share. We have two reportable operating segments: Company-operated shops and Franchising and other.

_________________

1 Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures” in Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.


	2025 vs 2024
Increase in total shops	13.8	%
Increase in total quarter-to-date revenue	25.2	%

Dutch Bros Inc.| Form 10-Q | 35

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Key Performance Indicators

The key performance indicators that we use to effectively manage and evaluate our business are as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
(dollars in thousands; unaudited)	2025			2024			2025			2024
Shop count, beginning of period
Company-operated	725			612			670			542
Franchised	318			300			312			289
Total shop count	1,043			912			982			831

Company-operated new openings	34			33			89			103
Franchised new openings	4			5			10			16



Shop count, end of period
Company-operated	759			645			759			645
Franchised	322			305			322			305
Total shop count	1,081			950			1,081			950

Systemwide AUV 1	N/A			N/A			$	2,081		$	2,004
Company-operated shops AUV 1	N/A			N/A			$	2,023		$	1,921

Systemwide same shop sales 2, 3	5.7		%	2.7		%	5.2		%	5.2		%
Ticket	1.0		%	1.9		%	2.3		%	5.6		%
Transactions	4.7		%	0.8		%	2.9		%	(0.4)		%
Company-operated same shop sales 2	7.4		%	4.0		%	7.0		%	6.3		%
Ticket	0.6		%	1.6		%	2.0		%	5.3		%
Transactions	6.8		%	2.4		%	5.0		%	1.0		%












Systemwide sales 3	$	576,886		$	478,765		$	1,637,831		$	1,342,750
Company-operated shops operating weeks 4	9,645			8,212			27,566			23,195
Franchising shops operating weeks 4	4,192			3,955			12,322			11,576


Dutch Rewards transactions as a percentage of total transactions 5	71.8		%	67.2		%	71.7		%	66.8		%

Dutch Bros Inc.| Form 10-Q | 36

Table of Contents


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
(dollars in thousands; unaudited)	$	%	$	%	$	%	$	%
Company-operated shops revenues	392,833	100.0	308,295	100.0	1,099,754	100.0	851,648	100.0
Company-operated shops gross profit	82,435	21.0	68,377	22.2	246,485	22.4	192,698	22.6
Company-operated shops contribution 6	109,231	27.8	90,847	29.5	323,532	29.4	255,900	30.0
Selling, general, and administrative expenses	65,289	15.4	57,536	17.0	189,595	15.9	161,866	17.3
Adjusted selling, general, and administrative expenses 6	57,639	13.6	50,268	14.9	169,845	14.2	138,321	14.7
Net income	27,283	6.4	21,712	6.4	88,120	7.4	60,083	6.4
Adjusted EBITDA 6	78,003	18.4	63,762	18.9	229,912	19.2	181,461	19.3

_________________

1 AUVs are determined based on the net sales for any trailing twelve-month period for systemwide and company-operated shops that have been open a minimum of 15 months. AUVs are calculated by dividing the systemwide and company-operated shops net sales by the total number of systemwide and company-operated shops, respectively. Management uses these metrics as an indicator of shop growth and future expectations of mature locations.

2 Same shop sales represents the estimated percentage change in year-over-year sales, for the comparable shop base, which we define as shops open for 15 complete months or longer as of the first day of the reporting period. Same shop sales can be impacted by changes in customer transaction counts and by changes in the per-ticket amounts. Management uses these metrics as an indicator of shop growth and future expansion strategy. The number of shops included in the systemwide and company-operated comparable bases for the respective periods are presented in the following table.


	Three Months Ended September 30,		Nine Months Ended September 30,
(unaudited)	2025	2024	2025	2024
Systemwide shop base	876	716	794	641
Company-operated shops base	582	438	510

Dutch Bros Inc. 10-Q