Arcos Dorados (ARCO) Q3 2025 earnings summary

Executive summary

• Total revenue reached $1.2 billion in Q3 2025, up 5.2% year-over-year, with balanced growth across all divisions and strong digital sales penetration at 61% of systemwide sales.

• Systemwide comparable sales rose 12.7% year-over-year, driven by average check growth, offsetting a low single-digit decline in guest traffic.

• Net income was $150.4 million ($0.71 per share), significantly boosted by a $125.2 million federal tax credit in Brazil.

• Adjusted EBITDA was $201.1 million, with a 16.9% margin, reflecting the impact of the Brazil tax credit.

• 22 new restaurants opened in Q3, with 72% of the portfolio modernized and loyalty program membership reaching 23.6 million.

Financial highlights

• Adjusted EBITDA was $201.1 million, up 60.9% year-over-year, with margin improving to 16.9%.

• Net income margin increased to 12.6% from 3.1% in Q3 2024.

• Food and paper costs increased, especially in Brazil due to elevated beef prices.

• Net debt-to-adjusted EBITDA ratio at quarter-end was 1.2x.

• Total cash and cash equivalents were $256.9 million, with total financial debt at $699.9 million.

Outlook and guidance

• Expect to deliver 90-100 new restaurant openings in 2025, with over 2,500 restaurants by year-end.

• Focus remains on sustainable topline growth, operational efficiency, and free cash flow generation.

• Positioned for normalized top-line and EBITDA growth as macroeconomic and consumer environments improve.

• Guidance for 2026 to be provided in Q1 next year.

• Loyalty program expansion on track to cover all main markets by year-end 2025.