How BROS (Dutch Bros) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a specialty beverage retailer like Dutch Bros Inc. (BROS) makes money is essential for investors and anyone interested in the business of quick-service beverages. 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 Inc. Overview

Dutch Bros Inc. operates a rapidly expanding chain of drive-thru coffee shops across the United States, specializing in handcrafted beverages including coffee, energy drinks, teas, and smoothies. Revenue comes primarily from company-operated shop sales, with a smaller contribution from franchise royalties and other related services. The company’s business model is focused on high-volume, quick-service beverage sales, leveraging a strong brand and loyal customer base.

Revenue Breakdown

• Total Revenue (Q3 2025): $423.6M (+25.2% YoY)
  • Company-operated shops: Majority of revenue (exact segment data not disclosed for Q3 2025)
  • Franchise and other: Minority share
  • Growth is powered by rapid new shop openings, increased same-shop sales, and geographic expansion.

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 its scalable store model and efficient supply chain, though rising input costs and aggressive expansion impact gross margin.
• Most costs come from beverage ingredients, labor, occupancy, and direct shop operating 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 separately disclosed
  • SG&A: $65.3M (+13.5% YoY, 15.4% of revenue) — Includes corporate overhead, field operations, marketing, and administrative costs
  • Dutch Bros continues to invest in growth and brand development while maintaining efficiency in overhead and shop-level operations.

Net Income

• Pre-Tax Income: $34.9M (+32.3% YoY, 8.2% margin)
• Income Tax: $7.66M (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 its scalable shop model and disciplined cost management, despite heavy investment in expansion.

What Drives Dutch Bros Inc.'s Money Machine?

• Company-operated shop sales: Over 90% of revenue, driven by high transaction volumes and new store openings
• Shop count growth: Dutch Bros added dozens of new locations YoY, fueling revenue expansion
• Brand and digital engagement: Strategic investments in loyalty programs and digital ordering enhance customer retention and frequency
• Future growth areas: Expansion into new states and markets, as well as menu innovation, though these investments are not yet fully profitable

Visualizing Dutch Bros Inc.'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 costs related to expansion and operations, 4.1% of revenue drops to the bottom line.

Key Takeaways

• Dutch Bros Inc.'s money comes overwhelmingly from company-operated shop beverage sales
• High revenue growth and moderate margins illustrate the power of Dutch Bros's scalable, high-volume business model
• Heavy investment in shop expansion and brand development, balanced by efficiency in operating costs
• Ongoing growth is driven by new shop openings, same-shop sales increases, and geographic expansion

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FAQ About Dutch Bros Inc.'s Income Statement

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

Dutch Bros generates over 90% of its revenue from company-operated shop beverage sales. Franchise royalties and other services contribute a smaller portion.

2. How profitable is Dutch Bros Inc. 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 strong sales growth and disciplined cost management.

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

The biggest expenses on Dutch Bros's income statement are cost of revenue (ingredients, labor, occupancy) and operating expenses, particularly SG&A, which reached $65.3M in Q3 2025 as the company prioritizes expansion and brand development.

4. Why does the franchise segment operate at a loss?

Franchise and other segments, despite generating revenue, may post operating losses due to upfront investments in support, training, and infrastructure for new franchisees, as Dutch Bros believes these will drive long-term growth—even if the division is unprofitable today.

5. How does Dutch Bros Inc.'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 U.S. corporate taxation, with some benefit from tax credits related to expansion and employment.