01—Abstract
Summary
Summary of the 10-K filed February 20, 2026. Cited figures are marked; the original filing is the authoritative source.
Yum!
Brands, Inc. (YUM) reported fiscal 2025 total revenues of $8.21 billiona, up from $7.55 billion in 2024, with Operating Profit of $2.57 billion and Net Income of $1.56 billion (diluted EPS $5.55, versus $5.22 in 2024). Excluding Special Items, diluted EPS was $6.05, up 10% per the filing. Worldwide system sales reached $68.30 billion, with same-store sales growth of 3% and 1,939 net new units.
Company restaurant margin declined to 15.7% from 16.9%, reflecting Company-owned restaurant growth, including the Taco Bell Southeast U.S. acquisition of 128 restaurants for approximately $670 millionb. The company operates over 63,000 restaurants in 155 countries, 97% franchised. Pizza Hut Division results weakened, with system sales down 3% excluding FX, same-store sales down 1%, and Operating Profit down 9%.
YUM has begun a strategic options review for the Pizza Hut brand, which it intends to complete in 2026 with no assurance of any specific outcome. Management stated that operating cash flow exceeded $2 billionc in 2025, that the Board declared a quarterly dividend of $0.75 per share, and that $1.1 billion of share repurchase capacity remained under the May 2024 authorization.
Total debt was about $12.0 billiond, and the filing states that the company targets a net leverage ratio of approximately 4.0x EBITDA over the medium term. The filing also discloses material contingencies, including an IRS assertion of approximately $2.1 billion in tax plus $418 million in penalties for fiscal 2014, which the company is contesting in Tax Court, and an Indian regulatory penalty order of approximately $125 million that the company is contesting and for which it does not consider a significant loss to be probable.
02—Key points
Key Highlights
- Total revenues rose to $8.21 billion in 2025 from $7.55 billion in 2024; Company sales increased to $2.95 billion from $2.55 billion.
- GAAP diluted EPS was $5.55 (vs. $5.22 in 2024); diluted EPS excluding Special Items was $6.05, up 10% per the filing.
- Worldwide system sales were $68.30 billion, with same-store sales growth of 3% and 4,567 gross unit openings yielding 1,939 net new units.
- Taco Bell Division was a strong performer: system sales up 7% ex FX, same-store sales up 7%, and Core Operating Profit up 8%.
- Pizza Hut Division declined: system sales down 3% ex FX, same-store sales down 1%, and Operating Profit down 9%; a strategic options review for the brand is underway, with completion intended in 2026.
- Operating cash flow was $2.01 billion in 2025 versus $1.69 billion in 2024; the quarterly dividend was raised to $0.75 per share, and $1.1 billion of repurchase capacity remained.
- The IRS asserts approximately $2.1 billion in underpaid tax plus $418 million in penalties for fiscal 2014; the company disagrees and is litigating in U.S. Tax Court.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2025, Yum! Brands kept $0.19.
- Revenue$8.21B100.0%
- Cost of revenue−$2.48B30.2%
- Gross profit$5.73B69.8%
- Operating costs−$3.16B38.4%
- Operating income$2.57B31.3%
- Interest, other & tax−$1.01B12.4%
- Net income$1.56B19.0%
Where FY2025 revenue went
$8.21B- Operating costs: $3.16B, 38% of revenue
- Cost of revenue: $2.48B, 30% of revenue
- Net income: $1.56B, 19% of revenue
- Interest, other & tax: $1.01B, 12% of revenue
Kept 19% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2025filed February 20, 2026Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $8.21B$7.55B | +8.8% |
| Cost of Revenue | $2.48B$2.12B | +17.1% |
| Gross Profit | $5.73B$5.43B | +5.6% |
| Operating Expenses | $5.64B$5.15B | +9.6% |
| Operating Income | $2.57B$2.40B | +7.1% |
| Interest Expense | $544.00M$542.00M | +0.4% |
| Net Income | $1.56B$1.49B | +4.9% |
| EPS (Basic) | $5.59$5.28 | +5.9% |
| EPS (Diluted) | $5.55$5.22 | +6.3% |
| Shares Outstanding (Basic) | 279.00M282.00M | −1.1% |
| Shares Outstanding (Diluted) | 281.00M285.00M | −1.4% |
05—Questions
Frequently Asked Questions
What drove the increase in YUM's 2025 earnings?
GAAP operating profit rose to $2.57 billion from $2.40 billion, driven by same-store sales growth and unit growth. Management attributes the increase in Core Operating Profit to the KFC and Taco Bell Divisions, while Pizza Hut declined.
How is the Pizza Hut strategic options review progressing?
YUM began reviewing strategic options for Pizza Hut in 2025 and intends to complete the review in 2026. The filing states there can be no assurance it will result in any specific outcome or transaction, and that the company has incurred and expects further costs of an indeterminate amount.
What are the main tax and legal contingencies?
The IRS asserts an underpayment of approximately $2.1 billion plus $418 million in penalties for fiscal 2014, tied to 2014 reorganizations, and the company has filed a Tax Court petition contesting it without reserving for the matter. Separately, an Indian regulatory penalty order of approximately $125 million is stayed, and the company denies liability.
How is YUM funding its shareholder returns and debt?
Operating cash flow exceeded $2 billion in 2025, and the company paid $789 million in dividends and repurchased $552 million of shares. Total debt was about $12.0 billion, with approximately 96% effectively fixed-rate, and the company intends to maintain net leverage of about 4.0x EBITDA over the medium term.
Why did Company restaurant margin decline?
Company restaurant margin fell to 15.7% from 16.9%. The filing attributes the Taco Bell decline to commodity inflation, primarily beef, and higher labor and operating costs, and attributes the KFC margin to lower-margin units from the KFC U.K. and Ireland acquisition.
06—Continue