Arcos Dorados Reports Third Quarter 2026 Financial Results

Arcos Dorados Holdings Inc. (NYSE: ARCO) (“Arcos Dorados” or the “Company”), Latin America and the Caribbean’s largest restaurant chain and the world’s largest independent McDonald’s franchisee, today reported unaudited results for the three and nine months ended September 30, 2026.

Message from Luis Raganato, Chief Executive Officer

We had a solid third quarter, with total revenue up more than 11%. Growth was driven by average check and encouraging guest traffic trends. Consolidated Adjusted EBITDA rose 9%, excluding the net federal tax credit from last year’s result.

Market share, which is the highest in the region, continued to expand in the quarter. Digital sales grew 22% year-over-year, representing around two-thirds of systemwide sales. We reached new highs within Digital, with 29% identified sales and a Loyalty Program membership that has grown by 60% in the last year, reaching almost 38 million members.

Adjusted EBITDA reached $125.9 million, with a 9.5% margin. Food and paper declined as a percentage of revenues, and continued cost discipline drove G&A (general and administrative) leverage. All three divisions delivered strong Adjusted EBITDA growth in US dollars.

In connection with the long-term objectives we communicated during our recent Investor Day, today we are also communicating our capital allocation framework: (i) high expected return capital expenditures to take advantage of the region’s long-term growth opportunity, (ii) healthy balance sheet to support long-term growth, (iii) dividends to provide a direct return of capital to shareholders and (iv) share repurchases as an additional way to return capital to shareholders.

With the first three priorities already well-established, and reflecting its confidence in our long-term growth ambitions, the Board of Directors has approved a share repurchase program of up to $25 million of the Company’s Class A shares over the course of the next six months.

Through the first nine months of 2026, we have delivered 13% total revenue and 17% Adjusted EBITDA growth in US dollars, excluding the net federal tax benefit in Brazil last year, despite navigating a period of challenging consumer dynamics. We are working hard to close the year with another solid quarter and start 2027 on the right foot.

Arcos Dorados’ total revenues reached $1.3 billion, up 11.3% in US dollars versus the prior year quarter. The Company’s systemwide comparable sales rose 15.5% in the quarter, driven by higher average check and positive guest traffic.

Digital channel sales rose by about 22% in the period and represented more than 66% of the third quarter’s systemwide sales. Self-order kiosks continued to deliver solid growth, benefiting from the increasingly modernized restaurant base. Delivery, Mobile Order & Pay, and Loyalty sales also remained strong, supported by increasing penetration and customer adoption across the region.

Marketing campaigns included the launch of the Best Burger quality platform in several SLAD markets, with strong improvements in taste and quality perceptions. Value platforms continued to be important across several markets, especially in NOLAD, where consumers remain cautious with their spending. Brazil added menu innovation with a new premium burger while leveraging a local favorite with another limited-time-offer of the McFish sandwich. All three divisions ran campaigns based on cross-platform partnerships such as K-Pop Demon Hunters and Formula One. Finally, several markets also innovated with new flavors on the dessert platform, with positive results.

Adjusted EBITDA declined in US dollars, mainly reflecting a high prior-year comparison base that included an $85.6 million positive impact from the net federal tax credit in Brazil. Excluding this effect, consolidated Adjusted EBITDA rose 9.0% and Adjusted EBITDA margin contracted by 20 basis points versus the prior-year period. This was driven by higher Payroll and Occupancy & Other Operating expenses as a percentage of revenues, which were partially offset by lower Food & Paper and G&A expenses.

Net income margin attributable to the Company was 2.3% in the third quarter of 2026, compared with 12.6% in the prior-year quarter, which included the full impact of the abovementioned net federal tax credit recognized in Brazil. Excluding this effect, net income margin expanded 20 basis points from 2.1% in the prior-year quarter.

Arcos Dorados recorded earnings of $0.15 per share in the third quarter of 2026. Total weighted average shares were 210,663,057 in both periods.

Notable Items

Included in Adjusted EBITDA: there were no notable items included in the Adjusted EBITDA in the third quarter of 2026. The third quarter of 2025 included $85.6 million related to a net federal tax credit in Brazil.

Excluded from Adjusted EBITDA: there were no notable items excluded from the Adjusted EBITDA in either the third quarter of 2026 or the third quarter of 2025.

Arcos Dorados opened 35 restaurants in the third quarter of 2026, including 28 freestanding units. As of the end of September 2026, 78% of its systemwide restaurant portfolio offered the most modernized restaurant experience in the Latin American and Caribbean quick service restaurant industry.

The net debt to Adjusted EBITDA leverage ratio ended the third quarter of 2026 at 1.3x, compared with 1.2x at year-end 2025.

Adjusted Free Cash Flow

For the last twelve months ended September 30, 2026, the Company generated Adjusted Free Cash Flow of $156.3 million, compared to $52.6 million in the prior comparable period.

Recent Developments

2026 Investor Day

On October 1, 2026, the Company hosted its 2026 Investor Day, where management presented its long-term growth strategy and financial framework. The Company provided long-term growth objectives of mid- to high-single-digit annual total revenue growth and high-single- to low-double-digit annual Adjusted EBITDA growth. From 2027 through 2030, the Company expects to open 550 to 600 restaurants and to invest $1.3 billion to $1.5 billion in capital expenditures.

Share Repurchase Program

The Company’s Board of Directors approved the adoption of a share repurchase program, pursuant to which the Company may from time to time repurchase in the open market and cancel up to $25 million of its Class A shares, over the next six months.

Third Quarter 2026 Earnings Webcast

A webcast to discuss the information contained in this press release will be held today, November 12, 2026, at 10:00 a.m. ET. In order to access the webcast, members of the investment community should follow this link: Arcos Dorados Third Quarter 2026 Earnings Webcast.

A replay of the webcast will be available later today in the investor section of the Company’s website: https://ir.arcosdorados.com/.

Definitions

In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), management analyzes business trends using a variety of performance, financial and liquidity measures, which are considered non-GAAP. This press release and the accompanying tables use the following non-GAAP measures: Adjusted EBITDA, Adjusted net cash provided by operating activities, Adjusted Free Cash Flow, Constant Currency basis, Systemwide sales, and Systemwide comparable sales growth.

Adjusted EBITDA: Management uses Adjusted EBITDA to facilitate operating performance comparisons from period to period.

Adjusted EBITDA is defined as the Company’s operating income plus depreciation and amortization plus/minus the following losses/gains: gains from sale or insurance recovery of property and equipment, write-offs of long-lived assets, impairment of long-lived assets, and reorganization and optimization plan expenses.

Management believes Adjusted EBITDA facilitates company-to-company operating performance comparisons by backing out potential differences caused by variations such as capital structures (affecting net interest expense and other financing results), taxation (affecting income tax expense) and the age and book depreciation of facilities and equipment (affecting relative depreciation expense), which may vary for different companies for reasons unrelated to operating performance. Figure 5 of this earnings release includes a reconciliation of Adjusted EBITDA to Net income attributable to Arcos Dorados. For more information, please see the Adjusted EBITDA reconciliation in Note 8 – Segment and geographic information – of our financial statements filed today with the Securities and Exchange Commission (the “SEC”) on Form 6-K.

Adjusted net cash provided by operating activities and Adjusted Free Cash Flow: Management uses Adjusted net cash provided by operating activities and Adjusted Free Cash Flow as supplemental measure to facilitate the analysis of the Company’s cash generation performance and liquidity from period to period.

Adjusted net cash provided by operating activities is defined as net cash provided by (used in) operating activities plus interest paid less interest collected. Adjusted Free Cash Flow is defined as Adjusted net cash provided by operating activities less property and equipment expenditures and purchases of restaurant businesses paid at acquisition date plus proceeds from sales of property and equipment, restaurant businesses and related advances.

Management believes Adjusted net cash provided by operating activities and Adjusted Free Cash Flow provide useful information to investors, when considered together with GAAP measures, in evaluating the Company’s ability to generate cash to fund capital expenditures and financing activities. Management evaluates these measures prior to investing and financing decisions.

Adjusted net cash provided by operating activities and Adjusted Free Cash Flow are non-GAAP financial measures and should not be considered as an alternative to net cash provided by operating activities or any other measure of financial performance or liquidity prepared in accordance with GAAP. These non-GAAP financial measures are not defined in the same manner by all companies and may not be comparable to similarly titled measures used by other companies. A reconciliation of Adjusted Free Cash Flow to net cash provided by operating activities is included in Figure 11 of this earnings release.

Constant Currency basis: refers to amounts calculated using the same exchange rate over the periods under comparison to remove the effects of currency fluctuations from this trend analysis. To better discern underlying business trends, this release uses non-GAAP financial measures that segregate year-over-year growth into two categories:

• Currency translation reflects the impact on growth of the appreciation or depreciation of the local currencies in which the Company conducts its business against the US dollar (the currency in which the Company’s financial statements are prepared).

• Constant currency growth reflects the underlying growth of the business excluding the effect from currency translation. The Company also calculates variations as a percentage in constant currency, which are also considered to be non-GAAP measures, to provide a more meaningful analysis of its business by identifying the underlying business trends, without distortion from the effect of foreign currency fluctuations.

Systemwide sales: Systemwide sales represent measures for both Company-operated and sub-franchised restaurants. While sales by sub-franchisees are not recorded as revenues by the Company, management believes the information is important in understanding its financial performance because these sales are the basis on which it calculates and records sub-franchised restaurant revenues and are indicative of the financial health of its sub-franchisee base.

Systemwide comparable sales growth: this non-GAAP measure, refers to the change, on a constant currency basis, in Company-operated and sub-franchised restaurant sales in one period from a comparable period for restaurants that have been open for thirteen months or longer (year-over-year basis) including those temporarily closed. Management believes it is a key performance indicator used within the retail industry and is indicative of the success of the Company’s initiatives as well as local economic, competitive and consumer trends. Sales by sub-franchisees are not recorded as revenues by the Company.

About Arcos Dorados

Arcos Dorados is the world’s largest independent McDonald’s franchisee, operating the largest quick service restaurant chain in Latin America and the Caribbean. It has the exclusive right to own, operate and grant franchises of McDonald’s restaurants in 21 Latin American and Caribbean countries and territories with more than 2,500 restaurants, operated by the Company or by its sub-franchisees, that together employ more than 100 thousand people (as of 09/30/2026). The Company is also committed to the development of the communities in which it operates, to providing young people their first formal job opportunities and to utilize its Recipe for the Future to achieve a positive environmental impact. Arcos Dorados is listed for trading on the New York Stock Exchange (NYSE: ARCO). To learn more about the Company, please visit the Investors section of our website: https://ir.arcosdorados.com/.

Cautionary Statement on Forward-Looking Statements

This press release contains forward-looking statements. The forward-looking statements contained herein include statements about the Company’s business prospects, its ability to attract customers, its expectation for revenue generation and its outlook and guidance for 2026 and for the period 2027 to 2030. These statements are subject to the general risks inherent in Arcos Dorados’ business. These expectations may or may not be realized. Some of these expectations may be based upon assumptions or judgments that prove to be incorrect. In addition, Arcos Dorados’ business and operations involve numerous risks and uncertainties, many of which are beyond the control of Arcos Dorados, which could result in Arcos Dorados’ expectations not being realized or otherwise materially affect the financial condition, results of operations and cash flows of Arcos Dorados. Additional information relating to the uncertainties affecting Arcos Dorados’ business is contained in its filings with the Securities and Exchange Commission. The forward-looking statements are made only as of the date hereof, and Arcos Dorados does not undertake any obligation to (and expressly disclaims any obligation to) update any forward-looking statements to reflect events or circumstances after the date such statements were made, or to reflect the occurrence of unanticipated events. Certain trademarks and characters referenced herein are the property of their respective owners and are used under license.

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