Dutch Bros Inc.BROS

Dutch Bros Inc. Segments Disclosure

10-KFiled Feb 13, 20262 min read
NOTE 18 — Segment Reporting
Segment information is prepared on the same basis that our CEO, who is the CODM, manages the segments, evaluates financial results and makes key operating decisions. Our CEO evaluates financial performance based on two operating segments, which offer distinct products and services to different customers: Company-operated shops and Franchising and other. The Company-operated shops segment includes retail coffee shop sales to end consumers. The Franchising and other segment includes bean and product sales to franchise partners, initial franchise fees, royalties, and marketing fees related to the franchise partners, as well as sales of products through our website.
The CODM reviews segment performance and allocates resources based upon segment contribution, which is defined as segment gross profit before depreciation and amortization. Segment contribution is used to monitor and assess segment results compared to prior periods, forecasted results, and our annual operating plan.
All segment revenue is earned in the United States. All intercompany sales amongst the Dutch Bros entities are fully eliminated in consolidation. Further, there are no intersegment revenues. The CODM does not evaluate operating segments using discrete asset information.
Selling, general and administrative expenses primarily consist of unallocated corporate expenses. Unallocated corporate expenses include corporate administrative functions that support the segments but are not directly attributable to or managed by any segment and are not included in the reported financial results of the segments.
No changes have been made to our segments during the three years ended December 31, 2025. In addition, no customer represented 10% or more of total revenue for each of the three years in the period ended December 31, 2025.
Financial information for our reportable segments was as follows for the periods presented:
 Year Ended December 31,
(in thousands)20252024 2023
Revenues
Company-operated shops$1,509,329 $1,165,830 $857,939 
Franchising and other128,830 115,185 107,837 
Total revenues1,638,159 1,281,015 965,776 
Cost of sales
Company-operated shops
Beverage, food & packaging390,331 296,752 230,133 
Labor costs405,932 315,805 230,505 
Occupancy & other costs251,106 191,372 140,895 
Pre-opening costs25,355 15,133 14,083 
Franchising and other29,736 30,100 31,378 
Segment cost of sales1
1,102,460 849,162 646,994 
Segment contribution
Company-operated shops436,605 346,768 242,323 
Franchising and other99,094 85,085 76,459 
Total segment contribution$535,699 $431,853 $318,782 
Segment depreciation and amortization
(111,753)(91,724)(67,486)
Selling, general and administrative(262,766)(234,036)(205,074)
Interest expense, net(28,305)(27,020)(32,321)
Other income, net
2,748 5,812 3,018 
Income before income taxes
$135,623 $84,885 $16,919 
__________________
1 Segment cost of sales for this presentation excludes the impact of depreciation and amortization.
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Historical Timeline

Fiscal YearFiled
2025Feb 13, 2026Showing above
2024Feb 13, 2025
2023Feb 23, 2024
2022Feb 27, 2023
2021Mar 11, 2022

About Segments Disclosures

Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.

Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.

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