Arcos Dorados (ARCO) investor relations material

Executive summary

• Total revenue for Q1 2026 reached $1.2 billion, up 13% year-over-year, marking a record first quarter, with systemwide comparable sales up 16% driven by higher average checks and improved guest traffic.

• Adjusted EBITDA rose nearly 30% to $119 million, the highest for a first quarter, with margin expanding to 9.7%, and net income more than doubled to $36.1 million.

• Digital channels contributed 64% of systemwide sales, with loyalty program membership exceeding 30 million, reflecting strong digital engagement.

• Opened 19 new restaurants, focusing on efficient capital deployment and modernization, with 75% of the portfolio now offering the most modernized experience.

• Market share expanded across the region, supported by strong brand equity, marketing initiatives, and operational execution.

Financial highlights

• Adjusted EBITDA margin expanded to 9.7% (up 120 basis points year-over-year), with margin improvement in all divisions.

• Adjusted free cash flow for the last 12 months reached $109.2 million, a significant turnaround from -$3 million in the prior period.

• Net income margin rose to 3.0%, up from 1.3% in 1Q 2025.

• Capital expenditure in Q1 was $36.8 million, down from $48.8 million year-over-year, with more restaurants opened.

• Sub-franchisee restaurant transactions added $5.8 million to adjusted EBITDA.

Outlook and guidance

• The second quarter of 2026 has started positively, with a focus on optimizing sales growth drivers, capturing efficiencies, and leveraging digital and loyalty platforms for improved profitability and free cash flow.

• Cautiously optimistic on food and paper costs, especially beef in Brazil, expecting continued margin support.

• Expect effective tax rate (ETR) to remain in line with 2025.

• Continued expansion and modernization of the restaurant base are expected to support future performance.