McDonald's (MCD) Financials

McDonald's Corporation (NYSE: MCD) has demonstrated steady financial performance over the past several years, with consistent growth in revenue, profitability, and solid cash flow generation. Here is a detailed analysis based on the most recent quarterly data and notable trends over the last four years:

• Strong Revenue Growth: Total operating revenue increased from around $5.85 billion in Q4 2022 to $6.67 billion in Q2 2025, showing consistent growth trends across most quarters.
• Increasing Net Income: Net income attributable to common shareholders rose from approximately $1.9 billion in Q4 2022 to $2.25 billion in Q2 2025, reflecting solid improvements in profitability.
• Stable Profit Margins: Gross profit margins have remained strong, with gross profit exceeding $4 billion in recent quarters on revenues above $6 billion, maintaining operating efficiency.
• Robust Operating Cash Flow: Net cash from operating activities remained strong, with $2.0 billion generated in Q2 2025, supporting capital expenditures and shareholder returns.
• Consistent Dividend Payments: Cash dividends per share have grown modestly from $1.38 in early 2023 to $1.77 in Q2 2025, demonstrating commitment to returning cash to shareholders.
• Ongoing Capital Investments: Significant investments in property, plant, and equipment are evident, with capex ranging around $600-$900 million quarterly, supporting growth and modernization.
• Effective Debt Management: While long-term debt is considerable (about $40 billion), the company manages repayments and issuances skillfully, balancing leverage and liquidity needs.
• Negative Equity Position: Total common equity is negative, largely driven by substantial treasury stock balances, a common situation in companies with extended share repurchases.
• Share Repurchases: McDonald's continues to repurchase common equity regularly, with quarterly amounts close to half a billion dollars, which supports EPS growth but contributes to negative equity.
• Rising Operating Expenses: Selling, general & administrative expenses and other operating expenses have risen somewhat over time, which may pressure margins if revenue growth slows.

Summary: McDonald's has maintained a stable and growing revenue base, effective cash flow generation, and prudent capital allocation strategies including dividends and share repurchases. The company's profitability and operating income have improved steadily, suggesting successful business execution and market demand resilience. The negative equity figure, resulting mainly from treasury shares, reflects an aggressive buyback program rather than fundamental financial distress.

Retail investors should note the consistent earning power, dependable dividends, and strategic reinvestment efforts. Monitoring operating expense trends and debt levels will be important to assess sustainability of growth and financial health going forward.