Papa Johns Announces Third Quarter 2025 Financial Results

LOUISVILLE, Ky.--( BUSINESS WIRE)--Papa John’s International, Inc. (Nasdaq: PZZA) (“Papa Johns ®”) (the “Company”) today announced financial results for the third quarter ended September 28, 2025.

Highlights

CEO Commentary

“Our third quarter results reflect strong performance and building momentum of our transformation work in International markets, offset by softer North American sales given current consumer sentiment and a promotional QSR marketplace. We are sharpening our value proposition and rebuilding our innovation pipeline to add new sales layers to our business. This relentless flow of innovation will allow us to better respond to consumer needs, leveraging our competitive advantages of quality, craftsmanship, and freshness at an accessible price,” said Todd Penegor, President and CEO.

“As we execute our transformation strategy, we are also strengthening our competitiveness in strategic markets and developing a world-class technology platform to differentiate the customer experience. Concurrently, we are taking action to remove non-customer facing costs from the business and build a more nimble, efficient organization. We have identified substantial savings, and we expect to identify additional efficiency opportunities as our review progresses. Papa Johns is a strong brand with a healthy balance sheet, and I’m confident that the work underway will position us to drive sustainable, profitable growth and create value for our customers, franchisees, and shareholders,” Penegor added.

(a) Represents a Non-GAAP financial measure. See “Non-GAAP Financial Measures” for a reconciliation to the most comparable U.S. GAAP measures.

(b) Growth rate excludes the impact of foreign currency.

Financial Highlights

Three Months Ended

Nine Months Ended

(In thousands, except per share amounts)

September 28,

2025

September 29,

2024

Increase (Decrease)

September 28,

2025

September 29,

2024

Increase (Decrease)

Total revenues

508,154

506,807

1,347

1,555,629

1,528,617

27,012

Net income

4,473

41,788

(37,315

)

23,487

69,238

(45,751

)

Adjusted EBITDA (a)

47,759

49,929

(2,170

)

149,998

169,414

(19,416

)

Diluted earnings per common share

0.13

1.27

(1.14

)

0.69

2.09

(1.40

)

Adjusted diluted earnings per common share (a)

0.32

0.43

(0.11

)

1.09

1.71

(0.62

)

Results for the three and nine months of 2025 are not directly comparable with the prior year periods, as year-over-year comparisons are impacted by the UK restaurant closures and refranchising transactions that occurred in the second and third quarters of 2024, as well as the sale of two Quality Control Center (“QC Center”) properties in the prior year third quarter.

Third Quarter 2025 Results

Revenue: Total revenues of $508.2 million increased $1.3 million, or 0.3%, in the third quarter of 2025 compared with the prior year period, reflecting improved performance in International markets, partially offset by lower performance in North America. The increase in revenues was mostly attributable to a $1.9 million increase in Other revenues, primarily reflecting higher digital fees, a $1.2 million increase in Franchise royalties and fees, primarily driven by an increase in franchise revenues from our International franchisees due to higher comparable sales, and a $0.6 million increase in Commissary revenues, primarily driven by higher volumes and pricing.

The above increases were partially offset by a $2.7 million decrease in Company-owned restaurant revenues, largely attributable to a $3.5 million decrease in revenues from our Domestic Company-owned restaurants, primarily due to lower comparable sales and the refranchising of 15 restaurants in the prior year, partially offset by an $0.8 million increase at our Company-owned restaurants in the UK driven by improved performance.

System-wide sales: For the third quarter of 2025, Global system-wide restaurant sales were $1.21 billion, up 2% (b) compared with the prior year third quarter, driven by higher International comparable sales and 1% global net restaurant growth on a trailing twelve-month basis. North America system-wide sales decreased 1% (b) to $879.8 million and International system-wide sales increased 10% (b) to $331.5 million in the third quarter of 2025, compared with the prior year period.

Net income: Third quarter Net income was $4.5 million, a $37.3 million decrease compared with the prior year third quarter, primarily due to a pre-tax gain of $41.3 million associated with the sale of two QC Center properties in the prior year third quarter. Additionally, Net income was impacted by higher D&A expense compared with the prior year period, primarily driven by $6.1 million of accelerated depreciation related to the Company’s development and deployment of technology improvements and related anticipated retirement of legacy technology assets, along with higher G&A expenses primarily related to approximately $4.4 million of incremental investments in marketing and $2.4 million of higher management incentive compensation costs. Net income also reflects slightly lower interest expense driven by lower average interest rates during the quarter and lower tax expense, due to lower pre-tax income, compared with the third quarter of 2024.

Adjusted EBITDA: Adjusted EBITDA (a) was $47.8 million, a $2.2 million decrease from the prior year third quarter. The decrease was primarily attributable to higher G&A expenses largely related to incremental investments in marketing along with $2.4 million of higher variable incentive compensation costs, partially offset by outperformance in International and commodity deflation at our North America commissaries.

Earnings per share: Diluted earnings per common share was $0.13 for the third quarter of 2025 compared with $1.27 in the third quarter of 2024. Adjusted diluted earnings per common share (a) was $0.32 for the third quarter of 2025 compared with $0.43 in the third quarter of 2024. These changes were primarily driven by the pre-tax gain of $41.3 million associated with the sale of two QC Center properties in the prior year third quarter and other factors impacting Net income and adjusted EBITDA (a) as discussed above.

Refer to the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our Quarterly Report on Form 10-Q filed with the SEC for additional information concerning our operating results for the three and nine months ended September 28, 2025.

(b) Growth rate excludes the impact of foreign currency.

Global Restaurant Sales Information

Global restaurant and comparable sales information for the three and nine months ended September 28, 2025, compared with the three and nine months ended September 29, 2024 are as follows (See “Supplemental Information and Financial Statements” below for related definitions):

Three Months Ended

Nine Months Ended

Amounts below exclude the impact of foreign currency

September 28,

2025

September 29,

2024

September 28,

2025

September 29,

2024

Comparable sales growth (decline):

Domestic Company-owned restaurants

(3.1

(6.7

(2.5

(4.6

North America franchised restaurants

(2.6

(5.3

(1.3

(3.4

North America restaurants

(2.7

(5.6

(1.5

(3.6

International restaurants

7.1

(2.8

4.7

(1.8

Total comparable sales growth (decline)

(0.2

(4.9

(0.0

(3.2

System-wide restaurant sales growth (decline):

Domestic Company-owned restaurants

(2.1

(4.8

(1.2

(2.8

North America franchised restaurants

(0.8

(3.8

1.1

(2.4

North America restaurants

(1.1

(4.0

0.6

(2.5

International restaurants

10.3

0.0

7.5

2.2

Total global system-wide restaurant sales growth (decline)

1.8

(3.0

2.3

(1.4

Global Restaurants

As of September 28, 2025, there were 5,994 Papa Johns restaurants operating in 51 countries and territories, as follows:

Third Quarter

Domestic

Company-

owned

Franchised

North

America

Total

North

America

International

Company-

owned

International

Franchised

Total

International

System-

wide

Beginning - June 29, 2025

541

2,976

3,517

2,459

2,472

5,989

Opened

—

Closed

—

(28)

—

(12)

(40)

Ending - September 28, 2025

545

2,962

3,507

2,474

2,487

5,994

Net restaurant growth/(decline)

(14)

(10)

—

Trailing four quarters net restaurant growth

—

Free Cash Flow

Free cash flow, a non-GAAP financial measure which the Company defines as net cash provided by operating activities (from the Condensed Consolidated Statements of Cash Flows) less the purchases of property and equipment, excluding purchases of property and equipment related to damages from natural disasters, was $59.2 million for the nine months ended September 28, 2025, compared with $9.0 million in the prior year period. The year-over-year change primarily reflects timing of cash payments for the Company’s National Marketing Fund and favorable changes in working capital, lower cash taxes, and lower spending related to our International transformation initiatives.

Nine Months Ended

(in thousands)

September 28,

2025

September 29,

2024

Net cash provided by operating activities

106,192

55,884

Purchases of property and equipment

(47,002

)

(46,931

)

Free cash flow

59,190

8,953

We view free cash flow as an important financial measure because it is one factor that management uses in determining the amount of cash available for discretionary investment. Free cash flow is not a term defined by GAAP, and as a result, our measure of free cash flow might not be comparable to similarly titled measures used by other companies. Free cash flow should not be construed as a substitute for or a better indicator of the Company’s performance than the Company’s GAAP measures.

Cash Dividend

The Company paid cash dividends of $15.3 million ($0.46 per common share) in the third quarter of 2025. On October 29, 2025, our Board of Directors declared a fourth quarter dividend of $0.46 per common share. The dividend will be paid on November 28, 2025 to stockholders of record as of the close of business on November 17, 2025.

2025 Outlook

The Company is updating its 2025 annual guidance for the following metrics:

2025 Metric

Prior Outlook

Current Outlook

System-wide sales

Up 2% to 5%

Up 1% to 2%

North America comparable sales

Flat to Up 2%

Down 2% to 2.5%

International comparable sales

Up 2% to 4%

Up 5% to 6%

North America gross openings

85 to 115

85 to 95

International gross openings

180 to 200

Adjusted EBITDA (as defined below)

$200 million to $220 million

$190 million to $200 million

Depreciation and amortization

$70 million to $75 million

$80 million to $95 million

Adjusted Depreciation and amortization (as defined below)

$70 million to $75 million

Interest expense

$40 million to $45 million

$40 million to $42 million

Effective tax rate

28% to 32%

27% to 30%

Capital expenditures

$75 million to $85 million

Adjusted EBITDA represents Net income before Net interest expense, Income tax expense, Depreciation and amortization, Stock-based compensation expense, and other adjustments that vary from period to period in accordance with the Company’s Non-GAAP policy. The Company believes adjusted EBITDA is a meaningful measure as it is widely used by analysts and investors to value the Company and its restaurants on a consistent basis. Adjusted EBITDA is not a term defined by GAAP, and is not intended to be a substitute for operating income, net income, or cash flows from operating activities, as defined under generally accepted accounting principles. As a result, our measure of adjusted EBITDA might not be comparable to similarly titled measures used by other companies. Adjusted depreciation and amortization represents depreciation and amortization expense excluding incremental depreciation expense related to the shortened useful life of legacy capitalized software assets due to the ongoing development and deployment of our new omnichannel platforms and other technology improvements.

This release includes forward-looking projections for certain non-GAAP financial measures, including adjusted EBITDA and adjusted depreciation and amortization. The Company excludes certain expenses and benefits from adjusted EBITDA and adjusted depreciation and amortization that, due to the uncertainty and variability of the nature and amount of those expenses and benefits, the Company is unable to, without unreasonable effort or expense, provide a reconciliation to Net income of those projected measures.

Conference Call

Papa Johns will host a call with analysts today, November 6, 2025, at 8:00 a.m. Eastern Time. To access the conference call or webcast, please register online at: ir.papajohns.com/events-presentations. A replay of the webcast will be available two hours after the call and archived on the same web page.

About Papa Johns

Papa John’s International, Inc. (Nasdaq: PZZA) opened its doors in 1984 with one goal in mind: BETTER INGREDIENTS. BETTER PIZZA.® Papa Johns believes that using high-quality ingredients leads to superior quality pizzas. Its original dough is made of only six ingredients and is fresh, never frozen. Papa Johns tops its pizzas with real cheese made from mozzarella, pizza sauce made with vine-ripened tomatoes that go from vine to can in the same day and meat free of fillers. It was the first national pizza delivery chain to announce the removal of artificial flavors and synthetic colors from its entire food menu. Papa Johns is co-headquartered in Atlanta, Ga. and Louisville, Ky. and is the world’s third-largest pizza delivery company with approximately 6,000 restaurants in approximately 50 countries and territories. For more information about the Company or to order pizza online, visit www.papajohns.com or download the Papa Johns mobile app for iOS or Android.

Forward-Looking Statements

Certain matters discussed in this press release and other Company communications that are not statements of historical fact constitute forward-looking statements within the meaning of the federal securities laws. Generally, the use of words such as “expect,” “intend,” “estimate,” “believe,” “anticipate,” “will,” “forecast,” “outlook”, “plan,” “project,” or similar words identify forward-looking statements that we intend to be included within the safe harbor protections provided by the federal securities laws. Such forward-looking statements include or may relate to projections or guidance concerning business performance, revenue, earnings, cash flow, earnings per share, share repurchases, depreciation and amortization, interest expenses, tax rates, system-wide sales, adjusted EBITDA, the current economic environment, industry trends, consumer behavior and preferences, commodity and labor costs, currency fluctuations, profit margins, supply chain operating margin, net unit growth, unit level performance, capital expenditures, restaurant and franchise development, franchisee profitability, restaurant acquisitions, restaurant closures, labor shortages, labor cost increases, changes in management, inflation, royalty relief, franchisee support and incentives, the effectiveness of our menu innovations and other business initiatives, investments in product, digital and technology innovation and investments, marketing efforts and investments, liquidity, compliance with debt covenants, impairments, strategic decisions and actions, changes to our national marketing fund, changes to our commissary model, dividends, effective tax rates, regulatory changes and impacts, impacts of tariffs, insurance recoveries for damages related to natural disasters, repositioning of the UK market, International restructuring plans, including timing of completion, expected benefits and costs, International consumer demand, adoption of new accounting standards, and other financial and operational measures. Such statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond our control. Therefore, actual outcomes and results may differ materially from those matters expressed or implied in such forward-looking statements.

Our forward-looking statements are based on our assumptions which are based on currently available information. Actual outcomes and results may differ materially from those matters expressed or implied in our forward-looking statements as a result of various factors, including but not limited to risks related to: deteriorating economic conditions and softening consumer sentiment in U.S. and international markets; labor shortages at Company and/or franchised restaurants and our quality control centers; increases in labor costs, changes in commodity costs, supply chain incentive-based rebates, or sustained higher other operating costs, including as a result of supply chain disruption, inflation, increased tariffs, trade barriers, immigration policies, or climate change; the effectiveness of new branding initiatives, advertising and marketing campaigns, and promotions, including alignment with and execution by our franchisees; aggressive pricing or other marketing or promotional strategies by competitors; the potential for delayed new restaurant openings, both domestically and internationally, or lower net unit development due to changing circumstances outside of our control; the increased risk of phishing, ransomware and other cyber-attacks; risks and disruptions to the U.S. and global economy and our business related to geopolitical conflicts including conflicts in Ukraine and the Middle East, and risks related to a possible economic recession or downturn or prolonged U.S. government shutdown that could reduce consumer spending or demand.

These and other risks, uncertainties and assumptions that are involved in our forward-looking statements are discussed in detail in “Part I. Item 1A. – Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024. We undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise, except as required by law.

For more information about the Company, please visit www.papajohns.com.

Supplemental Information and Financial Statements

Definitions

“Comparable sales” represents sales for the same base of restaurants for the same fiscal periods. “Comparable sales growth (decline)” represents the change in year-over-year comparable sales. “Global system-wide restaurant sales” represents total restaurant sales for all Company-owned and franchised restaurants open during the comparable periods, and “Global system-wide restaurant sales growth (decline)” represents the change in global system-wide restaurant sales year-over-year. Comparable sales, Comparable sales growth (decline), Global system-wide restaurant sales and Global system-wide sales growth (decline) exclude franchisees for which we suspended corporate support.

We believe Domestic Company-owned, North America franchised, and International Comparable sales growth (decline) and Global system-wide restaurant sales information is useful in analyzing our results since our franchisees pay royalties and marketing fund contributions that are based on a percentage of franchise sales. Comparable sales and Global system-wide restaurant sales results for restaurants operating outside of the United States are reported on a constant dollar basis, which excludes the impact of foreign currency translation. Franchise sales also generate commissary revenue in the United States and in certain international markets. Comparable sales growth (decline) and Global system-wide restaurant sales information is also useful for comparison to industry trends and evaluating the strength of our brand. Management believes the presentation of Global system-wide restaurant sales growth, excluding the impact of foreign currency, provides investors with useful information regarding underlying sales trends and the impact of new unit growth without being impacted by swings in the external factor of foreign currency. Franchise restaurant sales are not included in the Company’s revenues.

Financial Statement Updates

The Company has implemented several financial statement changes to evolve and modernize our financial statements and footnotes to increase transparency and better reflect management’s key performance metrics. Financial results for the three and nine months ended September 29, 2024 have been updated to conform with the current presentation to classify revenues and expenses based on the nature of the underlying activities without regard to operating segment. Please refer to the Company’s Form 10-K for the year ended December 29, 2024 and Company’s Form 10-Q for the third quarter ended September 28, 2025 for further information on segments.

Additionally, during the year ended December 29, 2024, the Company updated its internal cost allocation methodology to better reflect current levels of time and effort spent managing our different segments. These updates resulted in a higher allocation of previously unallocated corporate expenses to primarily the North America franchising and International segments. This update in methodology does not impact total reported expenses, and was implemented prospectively beginning with the year ended December 29, 2024. The comparative information has been recast.

Non-GAAP Financial Measures

In addition to the results provided in accordance with U.S. GAAP, we provide certain non-GAAP measures, which present results on an adjusted basis. These are supplemental measures of performance that are not required by or presented in accordance with U.S. GAAP and include the following: adjusted EBITDA, adjusted net income attributable to common shareholders and adjusted diluted earnings per common share. We believe that our non-GAAP financial measures enable investors to assess the operating performance of our business relative to our performance based on U.S. GAAP results and relative to other companies. We believe that the disclosure of these non-GAAP measures is useful to investors as they reflect metrics that our management team and Board utilize to evaluate our operating performance, allocate resources and administer employee incentive plans. The most directly comparable U.S. GAAP measures to adjusted EBITDA, adjusted net income attributable to common shareholders and adjusted diluted earnings per common share are net income, net income attributable to common shareholders and diluted earnings per common share, respectively. These non-GAAP measures should not be construed as a substitute for or a better indicator of the Company’s performance than the Company’s U.S. GAAP results. The table below reconciles our GAAP financial results to our non-GAAP financial measures.

Reconciliation of GAAP Financial Results to Non-GAAP Financial Measures

Three Months Ended

Nine Months Ended

(In thousands, except per share amounts)

September 28,

2025

September 29,

2024

September 28,

2025

September 29,

2024

Net income

4,473

41,788

23,487

69,238

Income tax expense

1,753

12,812

10,531

25,347

Net interest expense

9,945

10,629

30,608

32,588

Depreciation and amortization

24,914

17,260

62,076

52,528

Stock-based compensation expense

4,639

3,358

12,132

5,903

International restructuring costs (a)

231

3,876

4,862

19,604

Other costs (b)

1,804

1,495

6,302

5,495

Gain on sale of QC Center properties (c)

—

(41,289

)

—

(41,289

)

Adjusted EBITDA

47,759

49,929

149,998

169,414

Net income attributable to common shareholders

4,447

41,808

22,742

68,687

International restructuring costs (a)

231

3,862

4,841

19,514

Accelerated software depreciation (d)

6,091

—

6,091

—

Other costs (b)

1,659

1,495

6,157

5,495

Gain on sale of QC Center properties (c)

—

(41,289

)

—

(41,289

)

Tax effect of adjustments (e)

(1,812

)

8,121

(3,879

)

3,679

Adjusted net income attributable to common shareholders

10,616

13,997

35,952

56,086

Diluted earnings per common share

0.13

1.27

0.69

2.09

International restructuring costs (a)

0.01

0.12

0.15

0.59

Accelerated software depreciation (d)

0.18

—

0.18

—

Other costs (b)

0.05

0.04

0.19

0.17

Gain on sale of QC Center properties (c)

—

(1.25

)

—

(1.25

)

Tax effect of adjustments (e)

(0.05

)

0.25

(0.12

)

0.11

Adjusted diluted earnings per common share

0.32

0.43

1.09

1.71

(a)

(b)

For the three and nine months ended September 28, 2025, other costs is comprised of the following:

Losses on disposal of equipment incurred in connection with the termination of a COVID-era program that pre-purchased store equipment due to supply chain challenges;

ii.

Costs associated with project-based strategic initiatives that are not related to our ongoing operations as well as transaction costs incurred in connection with the anticipated sale of our 70% interest in a joint venture operating 85 restaurants (refer to “Note 11. Divestitures” in the Company’s Form 10-Q for the quarter ended September 28, 2025 for additional details), of which approximately $0.1 million was attributable to noncontrolling interests, and;

iii.

Costs incurred, net of anticipated insurance recoveries, arising from tornadoes that struck the Texas QC Center as well as the restaurant support center and QC Center in Louisville, Kentucky.

(c)

(d)

(e)

Papa John’s International, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except per share amounts)

September 28,

2025

December 29,

2024

(Unaudited)

Assets

Current assets:

Cash and cash equivalents

38,972

37,955

Accounts receivable, net

104,384

101,677

Notes receivable, current portion

3,815

4,928

Income tax receivable

3,689

2,214

Inventories

35,761

35,245

Prepaid expenses and other current assets

53,272

48,586

Assets held for sale

30,949

—

Total current assets

270,842

230,605

Property and equipment, net

262,294

273,272

Finance lease right-of-use assets, net

36,295

28,761

Operating lease right-of-use assets, net

160,975

184,425

Notes receivable, less current portion, net

3,237

8,867

Goodwill

67,450

75,460

Other assets

83,004

87,562

Total assets

884,097

888,952

Liabilities, Redeemable noncontrolling interests and Stockholders’ deficit

Current liabilities:

Accounts payable

70,378

61,842

Income and other taxes payable

9,632

11,987

Accrued expenses and other current liabilities

164,306

155,579

Current deferred revenue

12,555

15,519

Current finance lease liabilities

9,700

7,280

Current operating lease liabilities

25,724

25,756

Current portion of long-term debt

2,500

—

Liabilities held for sale

16,034

—

Total current liabilities

310,829

277,963

Deferred revenue

18,604

21,287

Long-term finance lease liabilities

28,312

22,885

Long-term operating lease liabilities

156,788

173,557

Long-term debt, less current portion, net

727,135

741,650

Other long-term liabilities

65,880

64,923

Total liabilities

1,307,548

1,302,265

Redeemable noncontrolling interests

925

903

Stockholders’ deficit:

Common stock ($0.01 par value per share; issued 49,296 at September 28, 2025 and 49,283 at December 29, 2024)

493

Additional paid-in capital

455,099

452,449

Accumulated other comprehensive loss

(6,733

)

(8,456

)

Retained earnings

219,041

241,717

Treasury stock (16,510 shares at September 28, 2025 and 16,637 shares at December 29, 2024, at cost)

(1,107,205

)

(1,115,729

)

Total stockholders’ deficit

(439,305

)

(429,526

)

Noncontrolling interests in subsidiaries

14,929

15,310

Total Stockholders’ deficit

(424,376

)

(414,216

)

Total Liabilities, Redeemable noncontrolling interests and Stockholders’ deficit

884,097

888,952

Papa John’s International, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

Three Months Ended

Nine Months Ended

(In thousands, except per share amounts)

September 28,

2025

September 29,

2024

September 28,

2025

September 29,

2024

Revenues:

Company-owned restaurant sales

168,421

171,097

521,291

546,988

Franchise royalties and fees

47,051

45,830

143,409

139,535

Commissary revenues

229,581

228,989

693,098

660,823

Other revenues

21,424

19,521

68,317

60,866

Advertising funds revenue

41,677

41,370

129,514

120,405

Total revenues

508,154

506,807

1,555,629

1,528,617

Costs and expenses:

Cost of sales

369,130

370,079

1,107,342

1,100,783

General and administrative expenses

56,478

12,883

191,763

127,806

Depreciation and amortization

24,914

17,260

62,076

52,528

Advertising funds expense

41,461

41,356

129,822

120,327

Total costs and expenses

491,983

441,578

1,491,003

1,401,444

Operating income

16,171

65,229

64,626

127,173

Net interest expense

(9,945

)

(10,629

)

(30,608

)

(32,588

)

Income before income taxes

6,226

54,600

34,018

94,585

Income tax expense (a)

(1,753

)

(12,812

)

(10,531

)

(25,347

)

Net income

4,473

41,788

23,487

69,238

Net (income) loss attributable to noncontrolling interests

234

(27

)

(551

)

Net income attributable to the Company

4,707

41,808

23,460

68,687

Net income attributable to common shareholders

4,447

41,808

22,742

68,687

Basic earnings per common share

0.14

1.28

0.69

2.10

Diluted earnings per common share

0.13

1.27

0.69

2.09

Basic weighted average common shares outstanding

32,889

32,745

32,834

32,701

Diluted weighted average common shares outstanding

33,043

32,930

32,962

32,850

___________________________________

(a)

The signage of Income tax expense has been changed from the historic presentation for purposes of signage consistency with other expense items.

Papa John’s International, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

Nine Months Ended

(In thousands)

September 28,

2025

September 29,

2024

Operating activities

Net income

23,487

69,238

Adjustments to reconcile net income to net cash provided by operating activities:

Provision for allowance for credit losses on accounts and notes receivable

5,669

2,936

Depreciation and amortization

62,076

52,528

Deferred income taxes

1,731

3,877

Stock-based compensation expense

12,132

5,903

Refranchising and impairment loss

8,127

17,433

Loss (gain) on disposal of property and equipment

2,771

(42,034

)

Other

1,082

573

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable

(9,439

)

(359

)

Income tax receivable

(1,412

)

232

Inventories

(1,544

)

(207

)

Prepaid expenses and other current assets

1,426

(1,278

)

Other assets and liabilities

(972

)

(5,923

)

Accounts payable

8,134

(11,896

)

Income and other taxes payable

(2,399

)

(7,609

)

Accrued expenses and other current liabilities

(2,087

)

(9,551

)

Deferred revenue

(4,739

)

(2,073

)

Advertising fund assets and liabilities

2,149

(15,906

)

Net cash provided by operating activities

106,192

55,884

Investing activities

Purchases of property and equipment

(47,002

)

(46,931

)

Purchases of property and equipment related to damages from natural disasters

(5,121

)

—

Insurance proceeds related to damages from natural disasters

3,300

—

Notes issued

—

(154

)

Repayments of notes issued

5,703

3,148

Proceeds from dispositions and refranchising, net of cash transferred

831

49,012

Proceeds from investments

4,739

2,275

Other

(68

)

Net cash (used in) provided by investing activities

(37,618

)

7,448

Financing activities

Net repayments of revolving credit facilities

(210,042

)

(31,589

)

Proceeds from term loan

200,000

—

Debt issuance costs

(3,223

)

—

Proceeds from exercise of stock options

397

1,021

Dividends paid to common stockholders

(45,817

)

(45,381

)

Tax payments for equity award issuances

(1,791

)

(3,508

)

Distributions to noncontrolling interests

(387

)

(627

)

Principal payments on finance leases

(7,455

)

(6,778

)

Other

110

278

Net cash used in financing activities

(68,208

)

(86,584

)

Effect of exchange rate changes on cash and cash equivalents

651

215

Change in cash and cash equivalents

1,017

(23,037

)

Cash and cash equivalents at beginning of period

37,955

40,587

Cash and cash equivalents at end of period

38,972

17,550

Papa John’s International, Inc. and Subsidiaries

Segment Information

The following tables present the operating results of our segments. We have four reportable segments: Domestic Company-owned restaurants, North America franchising, North America commissaries, and International. Under ASC 280, Segment Reporting, our segment performance is evaluated based on adjusted EBITDA. See the Company’s Form 10-Q for the quarter ended September 28, 2025 for further information on segments, including reconciliations of segment measures to consolidated measures for the quarter ended September 28, 2025.

Three Months Ended September 28, 2025

(in thousands, unaudited)

Domestic

Company-

Owned

Restaurants

North

America

Franchising

North

America

Commissaries

International

Revenues from external customers

165,194

33,797

209,403

44,721

Intersegment revenues

—

1,161

50,086

—

Segment revenue

165,194

34,958

259,489

44,721

Less segment expenses (a):

Cost of sales

150,917

—

234,448

24,044

General and administrative expenses

10,335

9,452

5,839

10,858

Advertising funds expense

—

4,519

Segment adjusted EBITDA

3,942

25,506

19,202

5,300

Three Months Ended September 29, 2024

(in thousands, unaudited)

Domestic

Company-

Owned

Restaurants

North

America

Franchising

North

America

Commissaries

International

Revenues from external customers

168,672

33,831

210,389

39,098

Intersegment revenues

—

1,011

52,063

—

Segment revenue

168,672

34,842

262,452

39,098

Less segment expenses (a):

Cost of sales

155,084

—

237,293

21,819

General and administrative expenses

9,234

8,181

8,473

9,944

Advertising funds expense

—

3,284

Segment adjusted EBITDA

4,354

26,661

16,686

4,051

Nine Months Ended September 28, 2025

(in thousands, unaudited)

Domestic

Company-

Owned

Restaurants

North

America

Franchising

North

America

Commissaries

International

Revenues from external customers

511,786

104,708

637,168

128,016

Intersegment revenues

—

3,664

154,356

—

Segment revenue

511,786

108,372

791,524

128,016

Less segment expenses (a):

Cost of sales

461,915

—

707,174

68,234

General and administrative expenses

31,033

28,776

26,145

28,983

Advertising funds expense

—

14,479

Segment adjusted EBITDA

18,838

79,596

58,205

16,320

Nine Months Ended September 29, 2024

(in thousands, unaudited)

Domestic

Company-

Owned

Restaurants

North

America

Franchising

North

America

Commissaries

International

Revenues from external customers

518,103

103,937

611,873

132,318

Intersegment revenues

—

3,101

151,633

—

Segment revenue

518,103

107,038

763,506

132,318

Less segment expenses (a):

Cost of sales

456,451

—

688,091

82,883

General and administrative expenses

28,884

24,662

26,511

28,258

Advertising funds expense

—

9,219

Segment adjusted EBITDA

32,768

82,376

48,904

11,958

___________________________________

(a)

Segment expenses excludes depreciation and amortization, stock-based compensation expense, and certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business.

Papa John’s International, Inc. and Subsidiaries

Supplemental Information - All Other

(in thousands, unaudited)

Three Months Ended

Nine Months Ended

All Other (a)

September 28,

2025

September 29,

2024

September 28,

2025

September 29,

2024

Revenues from external customers

55,039

54,817

173,951

162,386

Intersegment revenues

13,827

13,472

43,007

40,422

All Other revenue

68,866

68,289

216,958

202,808

All Other costs and expenses (b)

Cost of sales

14,928

12,076

40,109

37,501

General and administrative expenses

2,927

1,492

7,866

5,562

Advertising funds expense

46,513

47,880

145,087

140,186

All Other costs and expenses (a)

64,368

61,448

193,062

183,249

All Other adjusted EBITDA (c)

4,498

6,841

23,896

19,559

___________________________________

(a)

All other business units that do not meet the quantitative or qualitative thresholds for determining reporting segments, which are not operating segments, we refer to as “All Other.” These consist of operations that derive revenues from franchise contributions to marketing funds as well as information systems and related services used in restaurant operations, including our point-of-sale system, online and other technology-based ordering platforms. Our largest marketing fund is Papa Johns Marketing Fund (“PJMF”). PJMF is a consolidated nonstock corporation, intended to operate at break-even for the purpose of designing and administering advertising and promotional programs for all participating Domestic restaurants. Technology-based franchisee fees are meant to offset the costs of building, operating, and depreciating technology that supports franchisee operations. As such, these fees may vary from period to period, as they are designed to operate near break-even over time including the impact of depreciation. All Other is not a reportable segment under ASC 280, and this information is presented for informational purposes only. Please refer to the Company’s Form 10-Q for the third quarter ended September 28, 2025 for further information on segments, including reconciliations of segment measures to consolidated measures.

(b)

All Other costs and expenses excludes depreciation and amortization, stock-based compensation expense, and certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business.

(c)

See the Company’s Form 10-Q for the third quarter ended September 28, 2025 for further information on segments, including reconciliations of segment measures to consolidated measures for the quarter ended September 28, 2025.