Dutch Bros (BROS) Financials

Dutch Bros (NYSE:BROS) has shown strong top-line growth over the past several years, but the latest quarter also highlights a business that is still investing heavily and carrying a complex balance sheet. Revenue continues to rise at a healthy pace, operating cash flow remains solid, and store-level expansion is clearly driving the story. At the same time, the company’s large lease and tax-related liabilities, ongoing capital spending, and interest expense create meaningful financial leverage and keep profitability from translating into strong free cash flow.

• Revenue growth remains strong. Q1 2026 revenue was $464.4 million, up from $443.6 million in Q4 2025 and $355.2 million in Q1 2025. That continues a multi-year trend of steady expansion.
• Operating income improved year over year in Q1 2026. Operating income rose to $34.3 million from $31.1 million in Q1 2025, showing the business is scaling even as it keeps opening new locations.
• Operating cash flow is healthy. Q1 2026 operating cash flow was $84.7 million, well above net income, indicating the core business is generating solid cash.
• Gross profit dollars have trended higher. Gross profit increased to $107.5 million in Q1 2026 from $90.0 million in Q1 2025, reflecting more sales through the system.
• Cash and equivalents remain substantial. Dutch Bros ended Q1 2026 with $263.5 million in cash, giving it flexibility to keep expanding.
• Retained earnings turned meaningfully positive versus 2023. Retained earnings were $115.6 million in Q1 2026 compared with a deficit of $21.2 million in Q1 2023, showing the company has built a stronger earnings base over time.
• Store expansion is still driving heavy capital spending. Capital expenditures were $76.8 million in Q1 2026, following $71.2 million in Q4 2025 and $45.6 million in Q1 2025. That supports growth, but it also keeps cash flow under pressure.
• Noncontrolling interest remains large. The company reports a sizeable noncontrolling interest on the balance sheet, which means a meaningful portion of equity and earnings is attributable to others rather than common shareholders.
• Shares outstanding have risen over time. Basic weighted average shares were 127.1 million in Q1 2026, versus 83.3 million in Q1 2024 and 56.6 million in Q1 2023, reflecting dilution from growth and financing.
• Interest expense is still a drag. Q1 2026 had negative interest and investment income of $7.2 million, and cash interest paid was $9.2 million, which reduces the benefit of operating growth.
• Debt and lease obligations are significant. At Q1 2026, Dutch Bros carried $195.4 million of long-term debt and $921.9 million of capital lease obligations, which is a large obligation base for a still-expanding restaurant chain.
• Deferred tax liabilities are very large. Noncurrent deferred and payable income tax liabilities were $806.4 million in Q1 2026, a major balance sheet item investors should watch closely.
• Free cash flow is pressured by growth investment. Even with strong operating cash flow, continued heavy capex and financing outflows mean the company is not converting earnings into excess cash at a high rate yet.
• Net income attributable to common shareholders is still modest relative to revenue. Q1 2026 common shareholder profit was $16.1 million on $464.4 million of revenue, which shows margins remain thin.

Bottom line: Dutch Bros continues to look like a high-growth concept with improving operating performance, especially on revenue and cash from operations. However, the balance sheet is still burdened by substantial lease and tax liabilities, and the company’s expansion strategy requires heavy investment. For investors, the key question is whether revenue growth and operating leverage can outpace the cost of that growth over the next several years.