Arcos Dorados (ARCO) investor relations material

Executive summary

• Q4 2025 revenue reached $1.3 billion, up 10.7% year-over-year; full year revenue was $4.7 billion, up 4.7%, with systemwide comparable sales growth of 16% in Q4 and 13% for the year, matching blended inflation.

• Adjusted EBITDA hit $172.7 million in Q4 (13.6% margin) and $575.2 million for the year (12.3% margin), both record highs; net income for FY25 was $212.1 million, or $1.01 per share.

• Digital sales penetration reached 62% in Q4 and 61% for the year, with loyalty programs in over 90% of restaurants and membership growing to 27.2 million.

• Opened 102 new restaurants in 2025, raising the modernized portfolio to 73%.

• Strong performance in Mexico, Argentina, and SLAD; Brazil showed sequential improvement despite a challenging consumption environment.

Financial highlights

• Q4 Adjusted EBITDA margin reached a record 13.6%, up from 12.9% in Q4 2024; full year margin was 12.3%.

• Net income margin for Q4 was 2.0%, with EPS of $0.12; full year net income was $212.1 million.

• Payroll expenses improved by 60 basis points as a percentage of revenue, reaching historic lows.

• G&A expenses reduced by $10 million annually due to headcount reduction, with a 50 basis point improvement in Q4.

• Net tax benefit in Brazil contributed $106.1 million to full year adjusted EBITDA and $52.9 million to interest income.

Outlook and guidance

• Guidance for 2026: 105–115 new restaurant openings, CapEx of $275–$325 million, and continued focus on cost discipline and margin improvement.

• Board declared a cash dividend of $0.28 per share for 2026, up from $0.24, to be paid in four installments.

• Effective tax rate for 2026 expected to remain stable at 37.7%, with no structural changes anticipated.

• Priorities for 2026 include disciplined execution, improved returns on invested capital, and continued brand strengthening.

• Expect underlying profitability trends from Q4 to continue into 2026, with potential for higher gross margin.