Dutch Bros (BROS) Q2 Revenue Jumps 28%

Dutch Bros (BROS 0.92%), a fast-growing drive-thru beverage chain known for customizable coffee and proprietary energy drinks, released its Q2 2025 earnings on August 6, 2025. The company reported strong GAAP revenue and non-GAAP earnings that exceeded analyst predictions. GAAP revenue was $415.8 million, above the $403.75 million GAAP expectation, while adjusted earnings per share reached $0.26 compared to the $0.18 analyst forecast (non-GAAP). These results reflected not only better execution in store expansion and customer engagement but also significant gains in profitability and same shop sales. For the quarter, Dutch Bros (BROS 0.92%) showed clear progress across its critical focus areas, capping a quarter highlighted by robust transaction growth and continued investment in the company's digital and food initiatives.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Business Overview and Key Success Factors

Dutch Bros operates a network of drive-thru and walk-up beverage shops, with a menu including coffee-based drinks and its own Rebel energy drinks. The company has rapidly expanded across 19 states, now boasting over 1,000 shops as of the end of Q1 2025, the majority of which are company-operated rather than franchised as of December 31, 2024. Speed, convenience, and an engaging customer experience are hallmarks of its model, supported by a strong brand culture.

The business is focused on rapid, company-led expansion, digital customer engagement through the Dutch Rewards program, and maintaining high shop productivity. Success hinges on scaling new locations efficiently, sustaining high transaction counts, and leveraging its loyalty ecosystem to foster repeat visits. Innovations, such as mobile ordering and pilot food offerings, are increasingly central to its strategy.

Quarter Highlights: Financial and Strategic Developments

Dutch Bros opened 31 new shops during Q2 2025, of which 30 were company-operated, bringing the total shop count to 1,043 at quarter end. This rapid expansion reflects the company’s commitment to long-term growth, with over 725 company-operated shops and presence in 19 states. The system grew by 131 shops compared to Q2 2024, supporting the company's target of "mid-teens" annual new shop growth. Company-operated shop revenue climbed to $380.5 million, up 28.9% from $295.3 million in the prior-year period, clearly boosted by both store growth and underlying demand.

Company-operated shop gross profit rose 32.3% to $92.6 million compared to Q2 2024, resulting in a gross margin of 24.3%, up 0.6 percentage points. Beverage, food, and packaging expenses as a percentage of company-operated shop revenue were 25.3%, and labor costs fell to 26.6% of company-operated revenue, down from 27.2% in Q2 2024. Selling, general, and administrative (SG&A) expenses were $65.4 million, or 15.7% of total revenue, lower as a percentage than the prior year. The company also reported adjusted EBITDA—a profit figure that excludes interest, taxes, depreciation, and non-cash expenses—of $89.0 million, up from $65.2 million in Q2 2024.

Dutch Bros posted systemwide same shop sales growth of 6.1%, compared to 4.1% in Q2 2024. Importantly, this growth came primarily from higher transactions (up 3.7%), rather than simply raising prices. Company-operated same shop sales increased by 7.8%, with company-operated same shop transaction counts rising 5.9%, while the average ticket size rose 1.9%. The Dutch Rewards loyalty program reached a new high, accounting for 71.6% of transactions.

Digital innovation was another clear driver. Mobile ordering, first rolled out the previous year, continued to see rapid adoption, crossing approximately 11% of transactions by the start of Q1 2025 and trending higher since. Mobile ordering was especially strong in the morning, when customer demand is most time-sensitive, as observed in Q1 2025. Additionally, a pilot program for hot food items expanded from 8 to 32 locations in Q1 2025, aimed at driving more morning visits and capturing incremental beverage opportunities. Early results were reported as promising, with management planning a broader rollout test in 2026.

Cost management remained a focus. The company noted successful efforts to lock in the cost of key commodities like coffee for the remainder of 2025, while mitigating the impact of tariffs. However, management guided to some margin pressure later in the year—especially due to labor and ingredient costs—expecting about a 1.1 percentage point impact to annual cost of goods sold (COGS) margin for FY2025.

Looking Ahead: Guidance and Strategic Watchpoints

For FY2025, Dutch Bros raised its revenue outlook to $1.59 billion to $1.60 billion. This is an increase from the previous range of $1.555 billion to $1.575 billion for total FY2025 revenues. Management now expects same shop sales growth of about 4.5% for FY2025, up from a previous midpoint guidance of 3.5%. Adjusted EBITDA guidance was also raised to $285 million to $290 million for FY2025, compared to the earlier $265 million to $275 million.

The company reiterated its plan to open at least 160 new system shops in FY2025 and maintained capital spending expectations at $240 million to $260 million for FY2025. Looking forward, investors are likely to focus on the sustainability of traffic-led same shop sales growth, the continued adoption of new digital and food offerings, and how well Dutch Bros can manage the challenges of rapid expansion and rising costs. Management indicated a focus on operating margins, labor cost pressures, and delivering strong returns from its large pipeline of new shops.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.