0001866581FALSE08/07/202400018665812024-08-072024-08-07

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________
FORM 8-K
_______________________________________________________
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 7, 2024
_______________________________________________________
DB Logo for ER-jpeg.jpg
DUTCH BROS INC.
(Exact name of registrant as specified in its charter)
_______________________________________________________
Delaware001-4079887-1041305
(State or other jurisdiction of
incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
300 N Valley Dr
97526
Grants Pass,Oregon
(Address of principal
executive offices)		(Zip Code)
(541) 955-4700
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Exchange on which Registered
Class A Common Stock,
par value $0.00001 per share		BROSThe New York Stock Exchange




Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02. Results of Operations and Financial Condition.
On August 7, 2024, Dutch Bros Inc., a Delaware corporation (the “Company”), announced its financial results for the second quarter ended June 30, 2024. A copy of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
The information included in Item 2.02 of this Current Report on Form 8-K (including Exhibit 99.1) shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01.    Financial Statements and Exhibits
(d)    Exhibits
Exhibit No.Description
Earnings Release issued by Dutch Bros Inc. on August 7, 2024
104Cover Page with Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101)


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
DUTCH BROS INC.
(Registrant)
Date:August 7, 2024By:
/s/ Joshua Guenser
Joshua Guenser
Chief Financial Officer

Exhibit 99.1
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Dutch Bros Inc. Reports Second Quarter 2024 Financial Results

Achieves $325 million in Revenues in Quarter, a 30% Increase Year-over-Year
36 New Shop Openings During Quarter, Surpasses 900th Shop Milestone
Raises Revenue and Adj. EBITDA Guidance

GRANTS PASS, Ore. - August 7, 2024 - Dutch Bros Inc. (NYSE: BROS; “Dutch Bros” or the “Company”), one of the fastest-growing brands in the quick service beverage industry in the United States by location count, today reported financial results for the second quarter ended June 30, 2024.
Christine Barone, Chief Executive Officer and President of Dutch Bros, stated, “Our quarterly performance demonstrates the long runway ahead for Dutch Bros as we once again delivered strong top-line and profitability growth. Revenue rose 30%, including a 4.1% increase in system same-shop sales, and was underpinned by excellent margin flow through. With strong results 2024 to date despite the volatile consumer backdrop and expectations for a robust second half to the year, we are pleased to be raising our annual guidance.”
Barone continued, “The traffic-driving initiatives that we began implementing in 2023 are continuing to drive our business momentum. Approximately 67% of all transactions during the second quarter came through Dutch Rewards members, as our enhanced app is enabling us to efficiently and effectively connect with our loyal customers. We are also seeing phenomenal traction driving awareness in new markets through paid advertising and plan to further invest in this opportunity.”
Barone concluded, “We also continued with successful new shop openings and our mobile order roll-out. We added 36 shops in the second quarter, marking the 12th consecutive quarter of 30 or more new shop openings. As of June 30th, we had 38 shops in Arizona, California, and Texas with mobile order capabilities and have since expanded the rollout to approximately 200 shops as of the end of July. We are increasingly optimistic that we will have mobile order capabilities in a majority of our shops by year-end.”
Second Quarter 2024 Highlights
•Opened 36 new shops, 30 of which were company-operated, across 13 states.
•Total revenues grew 30.0% to $324.9 million as compared to $249.9 million in the same period of 2023.
•System same shop sales1 increased 4.1% relative to the same period in 2023, inclusive of the impact of our fortressing strategy, where some sales are being transferred from existing shops to new shops. Company-operated same shop sales increased 5.2%, relative to the same period of 2023.
•Company-operated shop revenues increased 33.6% to $295.3 million, as compared to $221.0 million in the same period of 2023.
•Company-operated shop gross profit was $70.0 million as compared to $52.1 million in the same period of 2023. In the second quarter of 2024, company-operated shop gross margin, which includes 150bps of pre-opening costs, was 23.7%, a year-over-year increase of 10bps.
•Company-operated shop contribution2, a non-GAAP financial measure, grew 36.1% to $91.1 million as compared to $66.9 million in the same period of 2023. In the second quarter of 2024,

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company-operated shop contribution margin, which includes 150bps of pre-opening costs, was 30.8%, a year-over-year increase of 50 bps.
•Selling, general, and administrative expenses were $58.1 million (17.9% of revenue) as compared to $51.7 million (20.7% of revenue) in the same period of 2023.
•Adjusted selling, general, and administrative expenses2, a non-GAAP financial measure, were $47.6 million (14.6% of revenue) as compared to $38.9 million (15.6% of revenue) in the same period of 2023.
•Net income was $22.2 million as compared to $9.7 million in the same period of 2023.
•Adjusted EBITDA2, a non-GAAP financial measure, grew 34.1% to $65.2 million as compared to $48.6 million in the same period of 2023.
•Adjusted net income2, a non-GAAP financial measure, was $31.2 million as compared to $20.9 million in the same period of 2023.
•Net income per share of Class A and Class D common stock - diluted was $0.12 as compared to $0.05 per share in the same period of 2023.
•Adjusted net income per fully exchanged share of diluted common stock2, a non-GAAP financial measure, was $0.19 as compared to $0.13 in the same period of 2023.
Revised 2024 Outlook
•Total revenues are now projected to be between $1.215 billion and $1.230 billion, up from the prior range of $1.20 billion and $1.215 billion.
•Same shop sales growth is expected to remain in the low single digits.
•Adjusted EBITDA3 is now estimated to be between $200 million and $210 million, up from the prior range of $195 million to $205 million and Adjusted SG&A3 is estimated to be between $190 million and $200 million, up from the prior range of $183 million and $189 million.
•Total system shop openings in 2024 are now expected to be at the lower end of the previously communicated range of 150 to 165.
•Capital Expenditures are estimated to be between $270 million to $290 million from the prior range of $280 million to $320 million.
_________________
1    Same shop sales is defined in the section “Select Financial Metrics”.
2    Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures”.
3    We have not reconciled guidance for Adjusted EBITDA or Adjusted SG&A to the corresponding GAAP financial measure because we do not provide guidance for the various reconciling items. We are unable to provide guidance for these reconciling items because we cannot determine their probable significance, as certain items are outside of our control and cannot be reasonably predicted due to the fact that these items could vary significantly from period to period. Accordingly, reconciliation to the corresponding GAAP financial measure is not available without unreasonable effort.

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Conference Call and Webcast Today
Christine Barone, Chief Executive Officer and President, and Josh Guenser, Chief Financial Officer, will host a conference call and webcast today at 5:00 p.m. Eastern Time (ET) to discuss financial results for the second quarter ended June 30, 2024.
Event: Second Quarter 2024 Conference Call and Webcast
Date: Wednesday, August 7, 2024
Time: 5:00 p.m. ET
Dial In: 1-201-493-6779
Webcast: https://investors.dutchbros.com under “Events & Presentations”.
The webcast will be archived shortly after the conference call has concluded. We will also publish earnings presentation slides related to these financial results on our website https://investors.dutchbros.com under “Events & Presentations”.
About Dutch Bros Inc.
Dutch Bros Inc. (NYSE: BROS) is a high growth operator and franchisor of drive-thru shops that focus on serving high QUALITY, hand-crafted beverages with unparalleled SPEED and superior SERVICE. Founded in 1992 by brothers Dane and Travis Boersma, Dutch Bros began with a double-head espresso machine and a pushcart in Grants Pass, Oregon. While espresso-based beverages are still at the core of what we do, Dutch Bros now offers a wide variety of unique, customizable cold and hot beverages that delight a broad array of customers. We believe Dutch Bros is more than just the products we serve—we are dedicated to making a massive difference in the lives of our employees, customers and communities. This combination of hand-crafted and high-quality beverages, our unique drive-thru experience and our community-driven, people-first culture has allowed us to successfully open new shops and continue to share the “Dutch Luv” at 912 locations across 18 states as of June 30, 2024.
To learn more about Dutch Bros, visit www.dutchbros.com, follow Dutch Bros Coffee on Instagram, Facebook, X, and TikTok, and download the Dutch Bros app to earn points and score rewards!
Dutch Bros, our Windmill logo (toc1aa.jpg), Dutch Bros. Blue Rebel, and our other registered and common law trade names, trademarks and service marks are the property of Dutch Bros Inc. All other trademarks, trade names and service marks appearing in this Earnings Release are the property of their respective owners. Solely for convenience, the trademarks and trade names in this Earnings Release may be referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert their rights thereto.

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Forward-Looking Statements
In addition to historical information, this release contains a number of “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, information and expectations regarding Dutch Bros’ leadership transitions, estimated capital expenditures, Dutch Bros’ possible or assumed future results of operations, including guidance for 2024, new shop openings, business strategies, and potential growth opportunities. These statements are based on Dutch Bros’ current expectations and beliefs, as well as a number of assumptions concerning future events. When used in this press release, the words “estimates,” “projected,” “expects,” “should,” “guidance,” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. Such forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside Dutch Bros’ control that could cause actual results to differ materially from the results discussed in the forward-looking statements, including those related to current expectations regarding Dutch Bros’ leadership performance, the effectiveness of our marketing initiatives, general economic conditions, commodity inflation, increased labor costs, disruptions in our supply chain, ability to hire and retain employees, and other risks, including those described under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 23, 2024, and in our future reports to be filed with the SEC, including our Quarterly Report on Form 10-Q for the three months ended June 30, 2024. Forward-looking statements contained in this press release are made as of this date, and Dutch Bros undertakes no duty to update such information except as required under applicable law.


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DUTCH BROS INC.
Condensed Consolidated Statements of Operations
Three Months Ended
June 30,		Six Months Ended
June 30,
(in thousands, except per share amounts; unaudited)2024202320242023
REVENUES
Company-operated shops$295,268 $220,952 $543,353 $394,116 
Franchising and other29,650 28,927 56,664 53,030 
Total revenues324,918 249,879 600,017 447,146 
COSTS AND EXPENSES
Cost of sales234,637 178,636 437,887 330,159 
Selling, general and administrative58,097 51,662 104,330 97,638 
Total costs and expenses292,734 230,298 542,217 427,797 
INCOME FROM OPERATIONS32,184 19,581 57,800 19,349 
OTHER EXPENSE
Interest expense, net(6,997)(9,058)(13,390)(16,944)
Other income, net829 1,039 6,593 2,346 
Total other expense(6,168)(8,019)(6,797)(14,598)
INCOME BEFORE INCOME TAXES26,016 11,562 51,003 4,751 
Income tax expense3,860 1,851 12,632 4,431 
NET INCOME$22,156 $9,711 $38,371 $320 
Less: Net income attributable to non-controlling interests10,216 6,959 19,369 1,410 
NET INCOME (LOSS) ATTRIBUTABLE TO DUTCH BROS INC.$11,940 $2,752 $19,002 $(1,090)
Net income (loss) per share of Class A and Class D common stock:


Basic$0.12 $0.05 $0.21 $(0.02)
Diluted$0.12 $0.05 $0.20 $(0.02)
Weighted-average shares of Class A and Class D common stock outstanding:
Basic101,965 56,734 92,647 56,699 
Diluted102,356 57,428 93,049 56,699 


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DUTCH BROS INC.
Segment Financials
Three Months Ended
June 30,		Six Months Ended
June 30,
(in thousands; unaudited)2024202320242023
Revenues:
Company-operated shops$295,268 $220,952 $543,353 $394,116 
Franchising and other29,650 28,927 56,664 53,030 
Total revenues324,918 249,879 600,017 447,146 
Cost of Sales:
Company-operated shops225,252 168,873 419,032 313,165 
Franchising and other9,385 9,763 18,855 16,994 
Total cost of sales234,637 178,636 437,887 330,159 
Segment gross profit:
Company-operated shops70,016 52,079 124,321 80,951 
Franchising and other20,265 19,164 37,809 36,036 
Total gross profit90,281 71,243 162,130 116,987 
Depreciation and amortization:
Company-operated shops21,038 14,799 40,732 27,800 
Franchising and other1,077 1,297 2,372 2,658 
All other ¹
235 420 499 837 
Total depreciation and amortization22,350 16,516 43,603 31,295 
Segment contribution:
Company-operated shops91,054 66,878 165,053 108,751 
Franchising and other21,342 20,461 40,181 38,694 
Total segment contribution112,396 87,339 205,234 147,445 
Selling, general and administrative(58,097)(51,662)(104,330)(97,638)
Interest expense, net(6,997)(9,058)(13,390)(16,944)
Other income, net829 1,039 6,593 2,346 
Income before income taxes$26,016 $11,562 $51,003 $4,751 
__________________
1 All other depreciation and amortization is included in selling, general and administrative expenses and is not part of the segment contribution calculations.

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DUTCH BROS INC.
Company-Operated Shop Results
 Three Months Ended
June 30,		Six Months Ended
June 30,
20242023 20242023
(in thousands; unaudited)$%$%$%$%
Company-operated shops revenue295,268 100.0 220,952 100.0 543,353 100.0 394,116 100.0 
Beverage, food and packaging costs75,147 25.5 59,433 26.8 138,863 25.5 108,385 27.6 
Labor costs80,236 27.2 58,735 26.6 145,663 26.8 107,284 27.2 
Occupancy and other costs44,277 15.0 32,642 14.8 85,773 15.8 63,201 16.0 
Pre-opening costs4,554 1.5 3,264 1.5 8,001 1.5 6,495 1.6 
Depreciation and amortization21,038 7.1 14,799 6.7 40,732 7.5 27,800 7.1 
Company-operated shop costs and expenses225,252 76.3 168,873 76.4 419,032 77.1 313,165 79.5 
Company-operated shops gross profit70,016 23.7 52,079 23.6 124,321 22.9 80,951 20.5 
Company-operated shops contribution 1
91,054 30.8 66,878 30.3 165,053 30.4 108,751 27.6 
_________________
1    Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures”.
DUTCH BROS INC.
Summary Cash Flows Data
Six Months Ended
June 30,
(in thousands; unaudited)20242023
Net cash provided by operating activities$100,729 $45,843 
Net cash used in investing activities(113,240)(102,058)
Net cash provided by financing activities139,888 59,754 
Net increase in cash and cash equivalents$127,377 $3,539 
Cash and cash equivalents at beginning of period133,545 20,178 
Cash and cash equivalents at end of period$260,922 $23,717 

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DUTCH BROS INC.
Condensed Consolidated Balance Sheets
(in thousands; unaudited)June 30,
2024		December 31,
2023
ASSETS
Current assets:
Cash and cash equivalents$260,922 $133,545 
Accounts receivable, net12,338 9,124 
Inventories, net46,651 46,953 
Prepaid expenses and other current assets14,700 15,637 
Total current assets334,611 205,259 
Property and equipment, net627,500 542,440 
Finance lease right-of-use assets, net380,999 382,734 
Operating lease right-of-use assets, net282,838 199,673 
Intangibles, net3,963 5,415 
Goodwill21,629 21,629 
Deferred income tax assets, net721,691 402,995 
Other long-term assets4,055 3,865 
Total assets$2,377,286 $1,764,010 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$36,092 $29,957 
Accrued compensation and benefits31,842 31,405 
Other accrued liabilities
19,293 15,770 
Other current liabilities5,873 6,423 
Deferred revenue31,405 30,349 
Current portion of finance lease liabilities11,927 9,482 
Current portion of operating lease liabilities2,483 10,239 
Current portion of long-term debt14,182 4,491 
Total current liabilities153,097 138,116 
Deferred revenue, net of current portion7,115 6,676 
Finance lease liabilities, net of current portion370,412 367,775 
Operating lease liabilities, net of current portion282,873 191,419 
Long-term debt, net of current portion228,966 93,175 
Tax receivable agreements liability
605,003 290,920 
Other long-term liabilities8 8 
Total liabilities1,647,474 1,088,089 
Equity:
Common stock 1 2 
Additional paid in capital504,657 379,391 
Accumulated other comprehensive income1,072 544 
Retained earnings (accumulated deficit)3,410 (15,592)
Total stockholders' equity attributable to Dutch Bros Inc.509,140 364,345 
Non-controlling interests220,672 311,576 
Total equity729,812 675,921 
Total liabilities and equity$2,377,286 $1,764,010 


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DUTCH BROS INC.
Select Financial Metrics
Three Months Ended
June 30,		Six Months Ended
June 30,
(in thousands, except number of shops data; unaudited)2024202320242023
Shop count, beginning of period
Company-operated582438542396
Franchised294278289275
 876716831 671
Company-operated new openings30357077
Franchised new openings63116
Shop count, end of period
Company-operated612473612 473
Franchised300281300 281
Total shop count912754912 754
Systemwide AUV 1
N/AN/A$2,005$1,928
Company-operated shops AUV 1
N/AN/A$1,923$1,880
Systemwide same shop sales 2, 3
4.1 %3.8 %6.8 %1.1 %
Company-operated same shop sales 2
5.2 %1.6 %7.8 %(0.8)%
Systemwide sales 3
$466,432$375,216$863,985$677,998
Company-operated operating weeks 4
7,7095,85414,98311,176
Franchising and other operating weeks 4
3,8423,6327,6217,178
Dutch Rewards transactions as a percentage of total transactions 5
66.7 %64.6 %66.6 %64.8 %
Three Months Ended
June 30,		Six Months Ended
June 30,
20242023 20242023
(in thousands; unaudited)$%$%$%$%
Company-operated shop revenues295,268100.0 220,952100.0 543,353100.0 394,116100.0 
Company-operated gross profit70,01623.7 52,07923.6 124,32122.9 80,95120.5 
Company-operated shop contribution 6
91,05430.8 66,87830.3 165,05330.4 108,75127.6 
Selling, general, and administrative expenses
58,09717.9 51,66220.7 104,33017.4 97,63821.8 
Adjusted selling, general, and administrative expenses 6
47,58414.6 38,91815.6 88,05314.7 75,15716.8 
Net income22,1566.8 9,7113.9 38,3716.4 3200.1 
Adjusted EBITDA 6
65,15920.1 48,59919.4 117,69919.6 72,47916.2 

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___________
1    AUVs are determined based on the net sales for any trailing twelve-month period for systemwide and company-operated shops that have been open a minimum of 15 months. AUVs are calculated by dividing the systemwide and company-operated shop net sales by the total number of systemwide and company-operated shops, respectively. Management uses this metric as an indicator of shop growth and future expectations of mature locations.
2    Same shop sales reflects the change in year-over-year sales for the comparable shop base, which we define as shops open for 15 complete months or longer as of the first day of the reporting period. Management uses this metric as an indicator of shop growth and future expansion strategy. The number of shops included in the systemwide and company-operated comparable bases for the respective periods are presented in the following table.
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Systemwide shop base671 538 641 503 
Company-operated shop base396 276 370 246 
3    Systemwide sales and systemwide same shop sales are operating measures that include sales at company-operated shops and sales at franchised shops during the comparable periods presented. Franchise sales represent sales at all franchise shops and are revenues to our franchisees. We do not record franchise sales as revenues; however, our royalty revenues and advertising fund contributions are calculated based on a percentage of franchise sales. As these metrics include sales reported to us by our non-consolidated franchise partners, these metrics should be considered as a supplement to, not a substitute for, our results as reported under GAAP. Management uses these metrics as indicators of our system’s overall financial health, growth and future expansion prospects.
4    Company-operated and franchise shops operating weeks are calculated based on the number operating days for the shop base and dividing by 7. Our shop base is defined as shops opened as of the end date of the periods presented. The operating weeks calculations reflect re-acquired franchises through 2022. Management uses these metrics as indicators of our system’s overall financial health, growth and future expansion prospects.
5    Dutch Rewards is our digitally-based rewards program available exclusively through the Dutch Rewards app. Management uses this metric as an indicator of customer loyalty adoption of our Dutch Rewards app and future promotional plans.
6    Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures”.
Non-GAAP Financial Measures
In addition to disclosing financial results in accordance with U.S. GAAP, this release contains references to the non-GAAP financial measures below. We believe these non-GAAP financial measures provide investors with useful supplemental information about our operating performance, enable comparison of financial trends and results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business and measuring our performance.
Our non-GAAP financial measures reflect adjustments based on one or more of the following items, as well as the related income tax effects where applicable. Income tax effects have been calculated based on the combined total non-GAAP adjustments using our total effective tax rate. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP, and the financial results calculated in accordance with U.S. GAAP and reconciliations from these results should be carefully evaluated.

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Company-operated shop contribution (in dollars and as a percentage of revenue)
Definition and/or calculation
Company-operated segment gross profit, before company-operated shop depreciation and amortization. Company-operated shop contribution in dollars (as defined), taken as a percentage of company-operated shop revenue.
Usefulness to management and investors
This non-GAAP measure is used by our management in making performance decisions without the impact of non-cash depreciation and amortization charges. This is a standard metric used across our industry by investors.
EBITDA, Adjusted EBITDA (in dollars and as a percentage of revenue)
EBITDA — definition and/or calculation
Net income before interest expense (net of interest income), income tax expense, and depreciation and amortization expense.
Adjusted EBITDA — definition and/or calculation
Defined as EBITDA (as defined above), excluding equity-based compensation, expenses associated with equity offerings, executive transitions, (gain) loss on the remeasurement of the liability related to the TRAs, legal proceedings, sale of aircraft, and organization realignment and restructuring costs.
Adjusted EBITDA in dollars (as defined), taken as a percentage of total revenue.
Usefulness to management and investors
These non-GAAP measures are supplemental operating performance measures we believe facilitate comparisons to historical performance and competitors’ operating results. We believe these non-GAAP measures presented provide investors with a supplemental view of our operating performance that facilitates analysis and comparisons of our ongoing business operations because they exclude items that may not be indicative of our ongoing operating performance.
Adjusted selling, general, and administrative (in dollars and as a percentage of revenue)
Definition and/or calculation
Selling, general, and administrative expenses, excluding depreciation and amortization, equity-based compensation expense, expenses associated with equity offerings, executive transitions, legal proceedings, and organization realignment and restructuring costs.
Adjusted selling, general, and administrative in dollars (as defined), taken as a percentage of total revenue.
Usefulness to management and investors
This non-GAAP measure is used as a supplemental measure of operating performance that we believe is useful to evaluate our performance period over period and relative to our competitors. We believe the non-GAAP measure presented provides investors with a supplemental view of our operating performance that facilitates analysis and comparisons of our ongoing business operations because it excludes items that may not be indicative of our ongoing operating performance.
Adjusted net income
Definition and/or calculation
Net income, excluding equity-based compensation expense, expenses associated with equity offerings, executive transitions, (gain) loss on the remeasurement of the liability related to the TRAs, legal proceedings, sale of aircraft, organization realignment and restructuring costs, and income tax effects of items excluded from net income.

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Usefulness to management and investors
This non-GAAP measure is used as a supplemental measure of operating performance that we believe is useful to evaluate our performance period over period and relative to our competitors. We believe this measure facilitates a better comparison with other companies that have different organizational and tax structures, as well as comparisons period over period.
Adjusted fully exchanged weighted-average shares of diluted common stock outstanding
Definition and/or calculation
Weighted-average shares of Class A and Class D common stock outstanding - basic with addition of dilutive impacts of restricted stock awards and units, as well as the assumed exchange of the weighted-average shares of Class B and Class C common stock.
Usefulness to management and investors
This non-GAAP measure is used as a supplemental measure of operating performance that we believe is useful to evaluate our performance period over period and relative to our competitors. By adding in the assumed full exchange of all of our outstanding Class B and Class C common stock, we believe this measure facilitates a better comparison with other companies that have different organizational and tax structures, as well as comparisons period over period.
Adjusted net income per fully exchanged share of diluted common stock
Definition and/or calculation
Net income per share of Class A and Class D common stock - diluted, excluding per share impacts of equity-based compensation expense, expenses associated with equity offerings, executives transition costs, (gain) loss on the remeasurement of the liability related to the TRAs, legal proceedings, sale of aircraft, organization realignment and restructuring costs, income tax effects of items excluded from net income, and removal of per share impacts of controlling and non-controlling interests.
Usefulness to management and investors
This non-GAAP measure is used as a supplemental measure of operating performance that we believe is useful to evaluate our performance period over period and relative to our competitors. By assuming the full exchange of all of our outstanding Class B and Class C common stock and related net income adjustments, we believe this measure facilitates a better comparison with other companies that have different organizational and tax structures, as well as comparisons period over period.
Non-GAAP adjustments
Below are the definitions of the non-GAAP adjustments that are used in the calculation of our non-GAAP measures, as described above.
Equity-based compensation
Non-cash expenses related to the grant and vesting of stock awards, including restricted stock awards and restricted stock units in Dutch Bros Inc. to certain eligible employees.
Expenses associated with equity offerings
Costs incurred as a result of our equity offerings, including secondary offerings by TSG Consumer Partners, L.P. and certain of its affiliates. These costs include, but are not limited to, legal fees, consulting fees, tax fees, and accounting fees.
Executive transitions
Employee severance and related benefit costs, as well as sign-on bonus(es) for several executive level transitions occurring in 2022 and 2023, and amortized through the first quarter of 2024.
TRAs remeasurements
(Gain) loss impacts related to adjustments of our TRAs liabilities.

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Legal proceedings
Loss accrual related to certain legal disputes.
Sale of aircraft
Gain impact related to the sale of the Company airplane to our Co-Founder.
Organization realignment and restructuring
Fees and costs, including consulting, employee-related and other costs, in connection with our comprehensive initiative to develop and implement a long-term strategy involving changes to our organizational structure to support our growth, and the resulting realignment activities that have occurred in 2023 and 2024, and are expected to continue for at least the next year. Given this strategic initiative's magnitude and scope, the Company does not expect such costs will recur in the foreseeable future. The Company does not consider such costs reflective of the ongoing costs necessary to operate its business.
Dilutive effects of restricted stock awards and units
Addition of incremental shares of restricted stock awards and units calculated under the treasury stock method, when they are dilutive for the calculation of weighted-average shares on a non-GAAP basis.
Assumed exchange of weighted-average Class B and Class C shares of common stock
Weighted-average shares of Class B and Class C common stock that are assumed to be exchanged for Class A common stock.
Removal of per share impacts of controlling and non-controlling interests
Removal of the net income allocated to controlling and non-controlling interests to align the numerator of the net income per share to the denominator, which assumes the full exchange of shares of Class B and Class C common stock.
Supplemental Reconciliations of GAAP Actuals to Non-GAAP Actuals
Following are the reconciliations of the most comparable GAAP financial measure to non-GAAP financial measure. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP, and the reconciliations from U.S. GAAP to Non-GAAP measures should be carefully evaluated. Please refer to "Non-GAAP Financial Measures" in this release for a detailed explanation of the adjustments made to the comparable U.S. GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.
Three Months Ended June 30,Six Months Ended June 30,
 2024202320242023
(in thousands; unaudited)$%$%$%$%
Company-operated shop gross profit70,016 23.7 52,079 23.6 124,321 22.9 80,951 20.5 
Depreciation and amortization21,038 7.1 14,799 6.7 40,732 7.5 27,800 7.1 
Company-operated shop contribution91,054 30.8 66,878 30.3 165,053 30.4 108,751 27.6 


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Three Months Ended June 30,Six Months Ended June 30,
 2024202320242023
(in thousands; unaudited)$%$%$%$%
Net income22,156 6.8 9,711 3.9 38,371 6.4 320 0.1 
Depreciation and amortization22,350 6.9 16,516 6.7 43,603 7.3 31,295 7.0 
Interest expense, net6,997 2.2 9,058 3.6 13,390 2.2 16,944 3.8 
Income tax expense3,860 1.1 1,851 0.7 12,632 2.1 4,431 1.0 
EBITDA55,363 17.0 37,136 14.9 107,996 18.0 52,990 11.9 
Equity-based compensation3,326 1.0 10,149 4.1 5,259 0.9 19,319 4.3 
Expenses associated with equity offerings528 0.2 — — 1,489 0.2 — — 
Executive transitions
— — 225 0.1 75 — 375 0.1 
TRAs remeasurements— — (861)(0.5)(5,687)(0.9)(2,155)(0.5)
Legal proceedings— — 1,950 0.8 — — 1,950 0.4 
Sale of aircraft
(752)(0.2)— — (752)(0.1)— — 
Organization realignment and restructuring:
Employee-related costs
6,664 2.1 — — 9,289 1.5 — — 
Other costs
30 — — — 30 — — — 
Total organization realignment and restructuring
6,694 2.1 — — 9,319 1.5 — — 
Adjusted EBITDA65,159 20.1 48,599 19.4 117,699 19.6 72,479 16.2 
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(in thousands; unaudited)$%$%$%$%
Selling, general, and administrative
58,097 17.9 51,662 20.7 104,330 17.4 97,638 21.8 
Depreciation and amortization(235)(0.1)(420)(0.1)(499)(0.1)(837)(0.2)
Equity-based compensation(3,056)(0.9)(10,149)(4.1)(4,895)(0.9)(19,319)(4.3)
Expenses associated with equity offerings
(528)(0.2)— — (1,489)(0.2)— — 
Executive transitions
— — (225)(0.1)(75)— (375)(0.1)
Legal proceedings— — (1,950)(0.8)— — (1,950)(0.4)
Organization realignment and restructuring:
Employee-related costs
(6,664)(2.1)— — (9,289)(1.5)— — 
Other costs(30)— — — (30)— — — 
Total organization realignment and restructuring
(6,694)(2.1)— — (9,319)(1.5)— — 
Adjusted selling, general, and administrative
47,584 14.6 38,918 15.6 88,053 14.7 75,157 16.8 

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Three Months Ended June 30,
(in thousands; unaudited)20242023
Net income
$22,156 $9,711 
Equity-based compensation3,326 10,149 
Expenses associated with equity offerings
528 — 
Executive transitions
— 225 
TRAs remeasurements— (861)
Legal proceedings— 1,950 
Sale of aircraft
(752)— 
Organization realignment and restructuring:
Employee-related costs
6,664 — 
Other costs
30 — 
Subtotal: Organization realignment and restructuring
6,694 — 
Income tax effects(770)(284)
Adjusted net income$31,182 $20,890 
Three Months Ended June 30,
(in thousands, except per share amounts; unaudited)20242023
Weighted-average shares of Class A and Class D common stock outstanding - basic101,965 56,734 
Dilutive effects of restricted stock awards and units
391 694 
Weighted-average shares of Class A and Class D common stock outstanding - diluted102,356 57,428 
Assumed exchange of weighted-average Class B and Class C shares of common stock63,828 105,756 
Adjusted fully exchanged weighted-average shares of common stock outstanding - diluted166,184 163,184 
Net income per share of Class A and Class D common stock - diluted
$0.12 $0.05 
Controlling and non-controlling interest adjustments0.01 0.02 
Equity-based compensation0.02 0.06 
Expenses associated with equity offerings
— — 
Executive transitions
— — 
TRAs remeasurements— (0.01)
Legal proceedings— 0.01 
Sale of aircraft
— — 
Organization realignment and restructuring:
Employee-related costs
0.04 — 
Other costs
— — 
Subtotal: Organization realignment and restructuring
0.04 — 
Income tax effects— — 
Adjusted net income per fully exchanged share of diluted common stock$0.19 $0.13 

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For Investor Relations inquiries:
Raphael Gross
ICR
(203) 682-8253
investors@dutchbros.com
 
For Media Relations inquiries:
Jessica Liddell
ICR
(203) 682-8208
jessica.liddell@icrinc.com

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Cover
Aug. 07, 2024
Cover [Abstract]  
Document Type 8-K
Entity Central Index Key 0001866581
Amendment Flag false
Document Period End Date Aug. 07, 2024
Entity Incorporation, State or Country Code DE
Entity Address, Address Line One 300 N Valley Dr
Entity Address, City or Town Grants Pass,
Entity Address, State or Province OR
Entity File Number 001-40798
Entity Tax Identification Number 87-1041305
Entity Address, Postal Zip Code 97526
City Area Code 541
Local Phone Number 955-4700
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Class A Common Stock, par value $0.00001 per share
Trading Symbol BROS
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Registrant Name DUTCH BROS INC.
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