ARCO Arcos Dorados Holdings Inc.

Overview and Growth

Fiscal 2025 results for Arcos Dorados Holdings Inc. combined $4.68B of revenue with net income of $212.12M and an operating cash inflow of $296.34M. Revenue of $4.68B sets the scale for evaluating how effectively sales translated into profit and cash during the year. Revenue was 4.7% above fiscal 2024 revenue of $4.47B, marking a year-over-year increase. On a per-share basis, diluted EPS was $1.01, which connects the reported earnings outcome with the company’s diluted share count. Diluted EPS increased by 42.3% from $0.71 in fiscal 2024, showing how the earnings change reached shareholders on a per-share basis.

Profitability

The first profit layer was $4.59B of gross profit, the amount available after reported direct revenue costs to absorb operating expenses. Gross profit represented 98.1% of revenue, showing how much of the top line remained after direct costs. Operating income was $364.39M, the earnings remaining from reported operations after the company’s recognized operating cost structure. Operating margin measured 7.8%, showing the portion of revenue preserved after the full set of operating costs. The bottom-line result was net income of $212.12M, after the operating, financing, tax, and other items recognized for the period. Net margin was 4.5%, meaning that this portion of revenue remained as net income after all recognized expenses. Before income taxes, the company reported $341.31M of earnings, providing a bridge between the operating result and final net income. The pretax margin was 7.3%, relating income before taxes directly to revenue. The company recognized $128.73M of income tax for the period, completing the transition from pretax income to net income. The effective relationship between income tax and positive pretax income was 37.7%, without assuming a statutory-rate comparison.

Liquidity and Capital Structure

The company held $3.89B of assets against $3.11B of liabilities and $772.14M of equity, revealing how the asset base was financed. Current assets were $851.96M against $828.74M of current liabilities, framing the resources and obligations classified within the near-term balance-sheet horizon. The current ratio was 1.03x, with current assets exceeding current liabilities and providing a short-term liquidity cushion. Reported cash and equivalents were $373.44M, separating immediately recognizable cash resources from the rest of the current-asset base. Measured only with cash and equivalents, coverage of current liabilities was 45.1%, excluding receivables and other current assets. The company carried $1.14B of total debt at period end, which frames its leverage and debt-service burden. Against book equity, debt measured 1.47x, placing the company’s financial leverage in clear balance-sheet terms. Debt represented 29.3% of total assets, placing borrowing in the context of the company’s full resource base. The liabilities-to-assets relationship was 80.1%, placing reported obligations against the full positive asset balance. The cash-to-assets relationship was 9.6%, comparing reported cash and equivalents with the full positive asset balance.

Cash Flow and Earnings Quality

Cash flow from operations was $296.34M, a reported cash inflow that can be compared directly with net income and capital spending. Against net income, operating cash flow measured 1.4x, showing the relationship between accrual earnings and operating cash. Capital expenditures used $281.35M, identifying the reported investment outflow deducted from operating cash flow in the free-cash-flow calculation. Relative to operating cash flow, capital expenditures measured 94.9%, connecting investment intensity with the company’s cash-generation base. After capital spending, free cash flow was $14.99M, leaving cash available for debt reduction, shareholder returns, or further investment. Relative to revenue, free cash flow equaled 0.3%, showing how much sales converted into cash after investment. The free-cash-flow-to-assets relationship was 0.4%, comparing post-investment cash with the balance-sheet asset base.

Based on the annual report for the fiscal year ending Dec 31, 2025. Analysis generated Oct 21, 2026.