How BROS (Dutch Bros) Makes Money in 2026: A Deep-Dive With Income Statement

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Understanding how a fast-casual coffee chain like Dutch Bros makes money is essential for investors and anyone interested in the business of quick-service restaurants. In this post, we break down Dutch Bros's quarterly income statement (Q3 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick Dutch Bros Overview

Dutch Bros operates as a high-growth drive-thru coffee chain with over 900 locations across the U.S., focusing on premium beverages, energy drinks, and a distinctive customer experience through "broista" service. Revenue comes primarily from company-operated shops, with additional contributions from franchised shops and emerging channels like Dutch Bros Rewards loyalty program sales. The business emphasizes rapid store expansion, menu innovation, and operational efficiency in the competitive coffee sector.

Revenue Breakdown

• Total Revenue (Q3 2025): $423.6M (+25.2% YoY)
  • Company-operated shops: Primary driver, comprising nearly all revenue as same-shop sales growth and new store openings fuel expansion
  • Franchised shops: Smaller contribution, supporting overall network growth
  • Growth is powered by same-shop sales increases, new shop openings, and loyalty program adoption.

Gross Profit and Margins

• Gross Profit: $106.8M (25.2% gross margin)
  • Cost of Revenue: $316.8M (+27.7% YoY)
  • Dutch Bros maintains moderate margins due to scale from shop expansion and supply chain efficiencies, though rising commodity costs like coffee and labor pressure the gross line.
• Most costs come from cost of sales (beverages, food, packaging) and labor/direct shop expenses.

Operating Income and Expenses

• Operating Income: $41.5M (+27.6% YoY, 9.8% margin)
• Operating Expenses: $65.3M (+13.5% YoY)
  • R&D: Not applicable (minimal in retail coffee model)
  • SG&A: $65.3M (+13.5% YoY, 15.4% of revenue) — Covers general administration, marketing for brand building, and overhead for store development
  • Dutch Bros continues to prioritize growth while maintaining efficiency through controlled SG&A scaling relative to revenue acceleration.

Net Income

• Pre-Tax Income: $34.9M (+32.3% YoY, 8.2% margin)
• Income Tax: $7.7M (21.9% effective tax rate)
• Net Income: $17.5M (+38.4% YoY, 4.1% net margin)
• Dutch Bros converts a moderate portion of sales into profit due to operational leverage from shop maturity and pricing power on premium drinks.

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What Drives Dutch Bros's Money Machine?

• Company-operated shops: Nearly 100% of revenue / High-volume drive-thru model with customizable drinks like the Dutch Faves lineup drives traffic
• Same-shop sales growth: +8-10% typical quarterly, reflecting strong brand loyalty and menu performance
• Store expansion: Investments in new "Dutch Bros on the Move" kiosks and full-line shops to boost footprint
• Future growth areas: Digital ordering and bottled Rebel energy drinks, though not yet profitable at scale

Visualizing Dutch Bros's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially SG&A) taking the largest chunk.
• Even after significant cost of revenue, 4.1% of revenue drops to the bottom line.

Key Takeaways

• Dutch Bros's money comes overwhelmingly from company-operated drive-thru shops
• High gross and net margins illustrate the power of Dutch Bros's asset-light expansion model
• Heavy investment in store growth, balanced by efficiency in operating costs
• Ongoing growth is driven by same-shop sales and new locations

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FAQ About Dutch Bros's Income Statement

1. What is the main source of Dutch Bros's revenue in 2025?

Dutch Bros generates over 95% of its revenue from company-operated shops. Additional revenue sources include franchised locations and emerging digital/loyalty channels.

2. How profitable is Dutch Bros in Q3 2025?

Dutch Bros reported net income of $17.5M in Q3 2025, with a net margin of approximately 4.1%, reflecting moderate profitability driven by revenue growth outpacing costs.

3. What are the largest expense categories for Dutch Bros?

The biggest expenses on Dutch Bros's income statement are operating expenses, particularly Research & Development (R&D) and Sales, General & Administrative (SG&A) costs. R&D investment reached N/A in Q3 2025, as Dutch Bros prioritizes menu innovation and shop prototyping.

4. Why does [segment/division] operate at a loss?

Franchised operations, despite generating modest revenue, posted an operating loss in Q3 2025. This is because Dutch Bros aggressively invests in franchise support and expansion, believing these will drive long-term growth—even if the division is unprofitable today.

5. How does Dutch Bros's effective tax rate compare to previous years?

Dutch Bros's effective tax rate in Q3 2025 was 21.9%, consistent with previous years. This moderate rate is primarily due to standard corporate tax structure with no major credits noted.