01—Abstract
Summary
Summary of the 10-Q filed May 8, 2025. Cited figures are marked; the original filing is the authoritative source.
Restaurant Brands International Inc. (QSR) reported first-quarter 2025 total revenues of $2,109 milliona, up from $1,739 million a year earlier, driven primarily by the net impact of restaurants acquired from franchisees, mainly the Carrols Acquisition, partially offset by an unfavorable FX Impact.
Income from operations fell to $435 millionb from $544 million, mainly due to an unfavorable change in Other operating expenses (income), net, which was $83 million versus $(18) million in the prior year, largely from a $75 million net loss on foreign exchange. Net income attributable to common shareholders was $159 million, or $0.49 per diluted share, compared with $230 million, or $0.72 per diluted share, a year earlier. Adjusted Operating Income was essentially flat at $539 million versus $540 million, with TH and INTL segment income declining and RH contributing $7 million.
System-wide sales growth was 2.8% and comparable sales were 0.1%, versus 8.1% and 4.6% in the prior-year period. Cash and cash equivalents were $899 millionc at March 31, 2025, with $1,248 million of Revolving Credit Facility borrowing availability. Operating cash flow from continuing operations was $118 million, compared with $148 million, and capital expenditures were $64 million in payments for property and equipment.
The company acquired BK China on February 14, 2025 for approximately $151 milliond in cash and is presenting it as discontinued operations while it seeks a new controlling shareholder; the company provided $107 million of funding to BK China during the quarter. The company declared a quarterly dividend of $0.62 per common share payable July 8, 2025, and had $500 million remaining under its share repurchase authorization, with no repurchases made in the quarter. Management reports that the Carrols Burger King restaurants are expected to be largely refranchised, and the company disclosed pending litigation related to the Burger King franchise no-hire clause and a Delaware shareholder complaint relating to the Carrols acquisition.
02—Key points
Key Highlights
- Total revenues rose to $2,109 million from $1,739 million, driven mainly by restaurants acquired from franchisees, primarily the Carrols Acquisition.
- Income from operations declined to $435 million from $544 million, driven by an unfavorable change in Other operating expenses (income), net, including a $75 million foreign exchange loss.
- Net income attributable to common shareholders was $159 million, or $0.49 per diluted share, versus $230 million, or $0.72 per diluted share, in the prior year.
- Adjusted Operating Income was $539 million versus $540 million; TH and INTL segment income decreased while RH contributed $7 million and PLK and FHS increased.
- System-wide sales growth was 2.8% and comparable sales were 0.1%, compared with 8.1% and 4.6% in Q1 2024.
- The BK China Acquisition for approximately $151 million in cash is presented as discontinued operations, with $107 million of funding provided to BK China during the quarter.
- Cash and cash equivalents were $899 million, and total debt, net was $13,624 million as of March 31, 2025.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed May 8, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $2.11B$1.74B | +21.3% |
| Operating Expenses | $1.67B$1.20B | +40.1% |
| Operating Income | $435.00M$544.00M | −20.0% |
| Net Income | $159.00M$230.00M | −30.9% |
| EPS (Basic) | $0.49$0.73 | −32.9% |
| EPS (Diluted) | $0.49$0.72 | −31.9% |
| Shares Outstanding (Basic) | 326.00M314.00M | +3.8% |
| Shares Outstanding (Diluted) | 456.00M453.00M | +0.7% |
05—Questions
Frequently Asked Questions
Why did RBI's income from operations decline despite higher revenues?
Revenues increased to $2,109 million from $1,739 million, mainly from restaurants acquired from franchisees, primarily the Carrols Acquisition. However, Other operating expenses (income), net was $83 million versus $(18) million a year earlier, largely reflecting a $75 million net loss on foreign exchange. Income from operations fell to $435 million from $544 million as a result.
How did the BK China Acquisition affect the company's financial presentation?
RBI acquired substantially all of the remaining equity interests in BK China on February 14, 2025 for approximately $151 million in cash. BK China was classified as held for sale and its results are presented as discontinued operations, with a net loss from discontinued operations of $2 million in the quarter. The company is working to identify a new controlling shareholder.
What is the status of shareholder returns and capital allocation?
The board declared a cash dividend of $0.62 per common share, payable July 8, 2025 to shareholders of record on June 24, 2025. The company did not repurchase any common shares in the quarter and had $500 million remaining under its share repurchase authorization as of March 31, 2025.
How did the company's liquidity position change in the quarter?
Cash and cash equivalents decreased to $899 million from $1,334 million at December 31, 2024. Operating cash flow from continuing operations was $118 million, and the company had $1,248 million of borrowing availability under its Revolving Credit Facility, with no amounts drawn.
What legal matters are disclosed in the filing?
The filing discloses a consolidated class action alleging that a no-solicitation and no-hiring clause in the Burger King franchise agreement violated the Sherman Act; on April 9, 2025 the court denied BKC's motion to dismiss. A separate Delaware Court of Chancery complaint by former Carrols shareholders alleges breach of fiduciary duty and unjust enrichment by RBI. The company intends to vigorously defend both and cannot predict the outcome or estimate a range of loss.
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