Open the filing on EDGARPAPA JOHNS ANNOUNCES THIRD QUARTER 2026 FINANCIAL RESULTS
Updates Fiscal 2026 Outlook
Introduces Unbox Better to Strengthen Brand and Franchise System
Launches New Marketing Framework with Increased Local Market Franchisee Investment
Louisville, Kentucky (November 5, 2026) - Papa John’s International, Inc. (Nasdaq: PZZA) (“Papa Johns®”) (the “Company”) today announced financial results for the third quarter ended September 27, 2026.
Highlights
- Global system-wide restaurant sales were $1.15 billion, a 5.6% decrease compared with the prior year third quarter.
- North America comparable sales decreased 8.3% from a year ago as comparable sales from Domestic Company-owned restaurants were down 7.5% and North America franchised restaurants were down 8.5%; International comparable sales decreased 1.8% compared with the prior year third quarter.
- Opened 47 new restaurants system-wide, comprised of 11 restaurant openings in North America and 36 restaurant openings in International markets.
- Net income was $3 million compared with $4 million in the prior year third quarter.
- Adjusted EBITDA was $38 million compared with $48 million in the prior year third quarter.
- Diluted earnings per common share was $0.09 compared with $0.13 in the prior year third quarter; adjusted diluted earnings per common share was $0.16 compared with $0.32 last year.
CEO Commentary
“Papa Johns is entering the next phase of its transformation with Unbox Better, a plan built around two priorities: strengthening our brand by giving customers more compelling reasons to choose Papa Johns and strengthening our system to consistently deliver on the expectations we create,” said Todd Penegor, President and CEO.
“At its core, Unbox Better is about turning our promise of ‘Better’ into something customers experience every time they interact with our brand, from our food and value proposition to restaurant execution and service. While our third-quarter results reflect continued pressure in a competitive operating environment, we have aligned our company and franchisees behind a clear strategy for growth, supported by a new marketing framework led by increased local marketing investment by our franchisees to complement our national marketing initiatives. This will be combined with core product improvements and operational actions to enhance competitiveness across our system. Together, these efforts are designed to strengthen our competitive position, drive sustainable growth and create long-term value for customers, franchisees and shareholders.”
Growth rate excludes the impact of foreign currency.
Represents a Non-GAAP financial measure. See “Non-GAAP Financial Measures” for a reconciliation to the most comparable U.S. GAAP measures.
Third Quarter 2026 Financial Highlights
| Three Months Ended | Nine Months Ended |
|---|
| In thousands, except per share amounts | September 27, 2026 | September 28, 2025 | Increase (Decrease) | September 27, 2026 | September 28, 2025 | Increase (Decrease) |
| Total revenues | $454,843 | $508,154 | $(53,311) | $1,415,849 | $1,555,629 | $(139,780) |
| Net income | $3,281 | $4,473 | $(1,192) | $18,919 | $23,487 | $(4,568) |
| Adjusted EBITDA | $38,085 | $47,759 | $(9,674) | $138,567 | $149,998 | $(11,431) |
| Diluted earnings per common share | $0.09 | $0.13 | $(0.04) | $0.55 | $0.69 | $(0.14) |
| Adjusted diluted earnings per common share | $0.16 | $0.32 | $(0.16) | $0.94 | $1.09 | $(0.15) |
Represents a Non-GAAP financial measure. See “Non-GAAP Financial Measures” for a reconciliation to the most comparable U.S. GAAP measures.
Results for the three and nine months ended September 27, 2026 are not directly comparable with the prior year period as comparisons are impacted by restaurant refranchising transactions that occurred subsequent to the third quarter of 2025.
Third Quarter 2026 Results
Revenue: The revenue commentary that follows includes a discussion of the Company’s segment results. Total revenues of $454.8 million in the third quarter of 2026 decreased $53.3 million, or 10.5%, compared with the prior year period, reflecting the impact of refranchising transactions and lower performance in North America. The decrease in revenues was mostly attributable to a $37 million decline at our Domestic Company-owned restaurants primarily related to: 1) approximately $26 million of lower revenues compared with the comparable prior period related to 113 restaurants that were refranchised subsequent to the third quarter of 2025, and 2) 7.5% lower comparable sales. North America Commissary revenues decreased $15 million, primarily due to lower volumes, partially offset by higher pricing. North America Franchising revenues decreased $5 million primarily due to lower comparable sales at franchised restaurants. Revenues from All Other business units increased $5 million, primarily reflecting higher advertising funds revenue, driven by discretionary Company contributions to the Papa Johns Marketing Fund. This was partially offset by lower digital fees. International revenues remained flat.
System-wide sales: Global system-wide restaurant sales were $1.15 billion, down 5.6% compared with the prior year third quarter, primarily due to lower comparable sales in North America and a decline in global net restaurants on a trailing twelve-month basis. North America system-wide sales decreased 8.8% to $802.3 million and International system-wide sales increased 2.8% to $343.7 million in the third quarter of 2026, both as compared with the prior year period.
Net income: Third quarter Net income was $3.3 million, a $1.2 million decrease compared with the prior year third quarter. The decrease was primarily related to lower sales partially offset by lower cost of sales and lower D&A expenses. Cost of sales declined in part due to the refranchising transactions mentioned above and lower transaction volumes at our Domestic Company-owned restaurants along with lower volumes at our North America commissaries. D&A expenses decreased compared with the prior year third quarter primarily due to lower levels of accelerated depreciation on technology assets in the current quarter.
Adjusted EBITDA: Adjusted EBITDA was $38.1 million, a $9.7 million decrease from the prior year third quarter. The decrease was primarily attributable to the aforementioned decline in sales and volumes in North America partially offset by lower cost of sales, as compared with the third quarter of 2025.
Represents a Non-GAAP financial measure. See “Non-GAAP Financial Measures” for a reconciliation to the most comparable U.S. GAAP measures.
Growth rate excludes the impact of foreign currency.
Earnings per share: Diluted earnings per common share was $0.09 for the third quarter of 2026 compared with $0.13 in the third quarter of 2025. Adjusted diluted earnings per common share was $0.16 for the third quarter of 2026 compared with $0.32 in the third quarter of 2025. These changes were due to the same factors impacting Net income and adjusted EBITDA discussed above.
Refer to the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our Quarterly Report on Form 10-Q filed with the SEC for additional information concerning our operating results for the three and nine months ended September 27, 2026.
Free Cash Flow
Free cash flow, a non-GAAP financial measure which the Company defines as net cash provided by operating activities (from the Condensed Consolidated Statements of Cash Flows) less the purchases of property and equipment, excluding purchases of property and equipment related to damages from natural disasters, was $19.2 million for the nine months ended September 27, 2026, compared with $59.2 million in the comparable prior year period. The year-over-year decrease primarily reflects the timing impact of compensation payments related to the prior year, as well as payments related to the Company’s Enterprise Transformation Plan, the timing of cash payments for Company’s National Marketing Fund, and lower net income during 2026, partially offset by a decrease in capital expenditures primarily driven by lower Company-owned restaurant development compared with the prior year period.
| Nine Months Ended |
|---|
| In thousands | September 27, 2026 | September 28, 2025 |
| Net cash provided by operating activities | $58,509 | $106,192 |
| Purchases of property and equipment | (39,307) | (47,002) |
| Free cash flow | $19,202 | $59,190 |
We view free cash flow as an important financial measure because it is one factor that management uses in determining the amount of cash available for discretionary investment. Free cash flow is not a term defined by GAAP, and as a result, our measure of free cash flow might not be comparable to similarly titled measures used by other companies. Free cash flow should not be construed as a substitute for or a better indicator of the Company’s performance than the Company’s GAAP measures.
Represents a Non-GAAP financial measure. See “Non-GAAP Financial Measures” for a reconciliation to the most comparable U.S. GAAP measures.
Global Restaurant Sales Information
Global restaurant and comparable sales information for the three and nine months ended September 27, 2026, compared with the three and nine months ended September 28, 2025 are as follows (See “Supplemental Information and Financial Statements” below for related definitions):
| Three Months Ended | Nine Months Ended |
|---|
| Growth rates below exclude the impact of foreign currency | September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 |
| Comparable sales growth (decline): | | | | |
| Domestic Company-owned restaurants | (7.5)% | (3.1)% | (7.4)% | (2.5)% |
| North America franchised restaurants | (8.5)% | (2.6)% | (7.8)% | (1.3)% |
| North America restaurants | (8.3)% | (2.7)% | (7.7)% | (1.5)% |
| International restaurants | (1.8)% | 7.1% | 1.0% | 4.7% |
| Total comparable sales growth (decline) | (6.5)% | (0.2)% | (5.4)% | 0.0% |
| Global system-wide restaurant sales growth (decline): | | | | |
| Domestic Company-owned restaurants | (5.5)% | (2.1)% | (6.5)% | (1.2)% |
| North America franchised restaurants | (9.4)% | (0.8)% | (8.0)% | 0.5% |
| North America restaurants | (8.8)% | (1.1)% | (7.8)% | 0.2% |
| International restaurants | 2.8% | 10.3% | 4.6% | 7.5% |
| Total global system-wide restaurant sales growth (decline) | (5.6)% | 1.8% | (4.6)% | 2.0% |
For the three and nine months ended September 27, 2026, comparable sales decline and system-wide restaurant sales decline for Domestic Company-owned restaurants and North America franchised restaurants were adjusted to exclude the impact of refranchising transactions that occurred subsequent to the third quarter of 2025. See “Note 11. Divestitures” of “Notes to Condensed Consolidated Financial Statements” in our Quarterly Report on Form 10-Q filed with the SEC for additional information.
System-wide restaurant sales for the nine months ended September 28, 2025 have been adjusted to remove $11.8 million of North America franchised restaurant sales that were erroneously overstated.
Global Restaurants
As of September 27, 2026, there were 5,969 Papa Johns restaurants operating in 51 countries and territories, as follows:
| Third Quarter | Domestic Company-owned | Franchised North America | Total North America | International Company-owned | International Franchised | Total International | System-wide |
| Beginning: June 28, 2026 | 456 | 2,983 | 3,439 | 13 | 2,526 | 2,539 | 5,978 |
| Opened | - | 11 | 11 | - | 36 | 36 | 47 |
| Closed | (9) | (36) | (45) | - | (11) | (11) | (56) |
| Refranchised | (28) | 28 | - | - | - | - | - |
| Ending: September 27, 2026 | 419 | 2,986 | 3,405 | 13 | 2,551 | 2,564 | 5,969 |
| Net restaurant growth/(decline) | (37) | 3 | (34) | - | 25 | 25 | (9) |
| Trailing four quarters net restaurant growth/(decline) | (126) | 24 | (102) | - | 77 | 77 | (25) |
2026 Outlook
The Company is updating its 2026 annual guidance to include the following metrics:
| Financial Metric | Prior 2026 Outlook | Current 2026 Outlook |
| Global system-wide restaurant sales | Down 2% to 4% | Down ~5% |
| North America comparable sales | Down 6% to 8% | Down ~8% |
| International comparable sales | Up 1% to 3% | Flat to Up 1% |
| North America gross openings | 40 to 50 | 40 to 50 |
| International gross openings | 180 to 220 | 180 to 220 |
| Adjusted EBITDA (as defined below) | $180 million to $190 million | Approximately $175 million |
| Adjusted Depreciation and amortization (as defined below) | $70 million to $75 million | $70 million to $75 million |
| Interest expense (net) | $35 million to $40 million | $35 million to $40 million |
| GAAP effective tax rate | 30% to 34% | 30% to 34% |
| Capital expenditures | $70 million to $80 million | $70 million to $80 million |
| Diluted shares outstanding | Approximately 33 million | Approximately 33 million |
(1) includes capitalized software-as-a-service costs.
Adjusted EBITDA represents Net income before Net interest expense, Income tax expense, Depreciation and amortization, Stock-based compensation expense, and other adjustments that vary from period to period in accordance with the Company’s Non-GAAP policy. The Company believes adjusted EBITDA is a meaningful measure as it is widely used by analysts and investors to value the Company and its restaurants on a consistent basis. Adjusted EBITDA is not a term defined by GAAP, and is not intended to be a substitute for operating income, net income, or cash flows from operating activities, as defined under generally accepted accounting principles. As a result, our measure of adjusted EBITDA might not be comparable to similarly titled measures used by other companies.
Adjusted depreciation and amortization represents depreciation and amortization expense excluding incremental depreciation expense related to the shortened useful life of legacy capitalized software assets due to the ongoing development and deployment of our new omnichannel platforms and other technology improvements.
This release includes forward-looking projections for certain non-GAAP financial measures, including adjusted EBITDA and adjusted depreciation and amortization. The Company excludes certain expenses and benefits from adjusted EBITDA and adjusted depreciation and amortization that, due to the uncertainty and variability of the nature and amount of those expenses and benefits, the Company is unable to, without unreasonable effort or expense, provide a reconciliation to Net income or GAAP depreciation and amortization of those projected measures, respectively.
Conference Call
Papa Johns will host a call with analysts today, November 5, 2026, at 8:00 a.m. Eastern Time. To access the conference call or webcast, please register online at: ir.papajohns.com/events-presentations. A replay of the webcast will be available two hours after the call and archived on the same web page.
About Papa Johns
Papa John’s International, Inc. (Nasdaq: PZZA) opened its doors in 1984 with one goal in mind: BETTER INGREDIENTS. BETTER PIZZA.® Papa Johns believes that using high-quality ingredients leads to superior quality pizzas. Its original dough is made of only six ingredients and is fresh, never frozen. Papa Johns tops its pizzas with real cheese made from mozzarella, pizza sauce made with vine-ripened tomatoes that go from vine to can in the same day and meat free of fillers. It was the first national pizza delivery chain to announce the removal of artificial flavors and synthetic colors from its entire food menu. Papa Johns is co-headquartered in Atlanta, Ga. and Louisville, Ky. and is the world’s third-largest pizza delivery company with approximately 6,000 restaurants in approximately 50 countries and territories. For more information about the Company or to order pizza online, visit www.papajohns.com or download the Papa Johns mobile app for iOS or Android.
Forward-Looking Statements
Forward-looking statements notice
Certain matters discussed in this press release and other Company communications that are not statements of historical fact constitute forward-looking statements within the meaning of the federal securities laws. Generally, the use of words such as “expect,” “intend,” “estimate,” “believe,” “anticipate,” “will,” “forecast,” “outlook,” “plan,” “project,” or similar words identify forward-looking statements that we intend to be included within the safe harbor protections provided by the federal securities laws. Such forward-looking statements include or may relate to projections or guidance concerning business performance, revenue, earnings, cash flow, earnings per share, depreciation and amortization, interest expense, tax rates, system-wide sales, transformation plans, marketing and growth initiatives, restaurant portfolio optimization, restaurant operational improvements, supply chain and other cost savings initiatives, adjusted EBITDA, 4-wall EBITDA, outcomes from our new marketing framework, the current economic environment, industry trends, consumer behavior and preferences, commodity and labor costs, currency fluctuations, profit margins, supply chain operating margin, net unit growth, unit level performance, capital expenditures, restaurant and franchise development, franchisee profitability, restaurant acquisitions, restaurant closures, labor shortages, labor cost increases, changes in management, inflation, royalty relief, franchisee support and incentives, the effectiveness of our menu innovations and other business initiatives, investments in product, investments in digital, artificial intelligence and technology innovation, marketing efforts and investments, liquidity, compliance with debt covenants, impairments, strategic decisions and actions, changes to our national marketing fund, changes to our commissary model, capital allocation, dividends and changes thereto, share repurchases, effective tax rates, regulatory changes and impacts, impacts of tariffs, insurance recoveries for damages related to natural disasters, restructuring plans, including timing of completion, expected benefits and costs, adoption of new accounting standards, and other financial and operational measures. Such statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond our control. Therefore, actual outcomes and results may differ materially from those matters expressed or implied in such forward-looking statements.
Forward-looking statements notice
Our forward-looking statements are based on our assumptions which are based on currently available information. Actual outcomes and results may differ materially from those matters expressed or implied in our forward-looking statements as a result of various factors, including but not limited to risks related to: deteriorating economic conditions and softening consumer sentiment in U.S. and international markets; aggressive pricing or other marketing or promotional strategies by competitors; changes in consumer preferences or consumer buying habits, including the growing popularity of delivery aggregators; increases in labor costs (or labor shortages), changes in commodity costs, supply chain incentive-based rebates, or sustained higher other operating costs, including as a result of supply chain disruption, inflation, increased tariffs, trade barriers, immigration policies, or climate change; the effectiveness of new branding initiatives, advertising and marketing campaigns, and promotions, including alignment with and execution by our franchisees; the potential for delayed new restaurant openings, both domestically and internationally, or lower net unit development due to changing circumstances outside of our control; our franchise business model, including our reliance on the financial success and cooperation of our franchisees; the increased risk of phishing, ransomware and other cyber-attacks; risks and disruptions to the U.S. and global economy and our business related to geopolitical conflicts, including those in Ukraine and the Middle East; and risks related to a possible economic recession or downturn that could reduce consumer spending or demand.
These and other risks, uncertainties and assumptions that are involved in our forward-looking statements are discussed in detail in “Part I. Item 1A. - Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 28, 2025. We undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise, except as required by law.
For more information about the Company, please visit www.papajohns.com.
Supplemental Information and Financial Statements
Definitions
“Comparable sales” represents sales for the same base of restaurants for the same fiscal periods. “Comparable sales growth (decline)” represents the change in year-over-year comparable sales. “Global system-wide restaurant sales” represents total restaurant sales for all Company-owned and franchised restaurants open during the comparable periods, and “Global system-wide restaurant sales growth (decline)” represents the change in global system-wide restaurant sales year-over-year. Comparable sales, Comparable sales growth (decline), Global system-wide restaurant sales and Global system-wide sales growth (decline) exclude franchisees for which we suspended corporate support.
We believe Domestic Company-owned, North America franchised, and International Comparable sales growth (decline) and Global system-wide restaurant sales information is useful in analyzing our results since our franchisees pay royalties and marketing fund contributions that are based on a percentage of franchise sales. Comparable sales and Global system-wide restaurant sales results for restaurants operating outside of the United States are reported on a constant dollar basis, which excludes the impact of foreign currency translation. Franchise sales also generate commissary revenue in the United States and in certain international markets. Comparable sales growth (decline) and Global system-wide restaurant sales information is also useful for comparison to industry trends and evaluating the strength of our brand. Management believes the presentation of Global system-wide restaurant sales growth (decline), excluding the impact of foreign currency, provides investors with useful information regarding underlying sales trends and the impact of new unit changes without being impacted by swings in the external factor of foreign currency. Franchise restaurant sales are not included in the Company’s revenues.
Non-GAAP Financial Measures
In addition to the results provided in accordance with U.S. GAAP, we provide certain non-GAAP measures, which present results on an adjusted basis. These are supplemental measures of performance that are not required by or presented in accordance with U.S. GAAP and include the following: adjusted EBITDA, 4-wall EBITDA, 4-wall EBITDA margin, adjusted net income attributable to common shareholders, and adjusted diluted earnings per common share. We believe that our non-GAAP financial measures enable investors to assess the operating performance of our business relative to our performance based on U.S. GAAP results and relative to other companies. We believe that the disclosure of these non-GAAP measures is useful to investors as they reflect metrics that our management team and Board utilize to evaluate our operating performance, allocate resources and administer employee incentive plans. The most directly comparable U.S. GAAP measures to adjusted EBITDA, 4-wall EBITDA, adjusted net income attributable to common shareholders, and adjusted diluted earnings per common share, are net income, segment adjusted EBITDA, net income attributable to common shareholders, and diluted earnings per common share, respectively. 4-wall EBITDA is defined as Domestic Company-owned restaurants segment revenue less total Domestic Company-owned restaurants segment cost of sales. 4-wall EBITDA margin is defined as 4-wall EBITDA divided by segment revenue for our Domestic Company-owned restaurants segment. These non-GAAP measures should not be construed as a substitute for or a better indicator of the Company’s performance than the Company’s U.S. GAAP results.
Reconciliation of GAAP Financial Results to Non-GAAP Financial Measures
| Three Months Ended | Nine Months Ended |
|---|
| (In thousands, except per share amounts) | September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 |
| Net income | | $3,281 | | $4,473 | | $18,919 | | $23,487 |
| Income tax expense | | 1,556 | | 1,753 | | 10,664 | | 10,531 |
| Net interest expense | | 9,396 | | 9,945 | | 28,595 | | 30,608 |
| Depreciation and amortization | | 19,236 | | 24,914 | | 56,213 | | 62,076 |
| Stock-based compensation expense | | 3,797 | | 4,639 | | 11,263 | | 12,132 |
| Restructuring costs | | 580 | | 231 | | 8,128 | | 4,862 |
| Other costs | | 1,243 | | 1,321 | | 6,597 | | 5,789 |
| Refranchising transaction (gain) expense, net | | (1,743) | | 483 | | (2,551) | | 513 |
| Technology Transformation costs | | 739 | | - | | 739 | | - |
| Adjusted EBITDA | | $38,085 | | $47,759 | | $138,567 | | $149,998 |
| Net income attributable to common shareholders | | $3,137 | | $4,447 | | $18,200 | | $22,742 |
| Restructuring costs | | 1,209 | | 231 | | 9,915 | | 4,841 |
| Other costs | | 1,243 | | 1,321 | | 6,597 | | 5,789 |
| Refranchising transaction (gain) expense, net | | (1,643) | | 338 | | (2,642) | | 368 |
| Technology Transformation costs | | 1,834 | | 6,091 | | 2,744 | | 6,091 |
| Tax effect of adjustments | (613) | | (1,812) | | (3,795) | | (3,879) | |
| Adjusted net income attributable to common shareholders | | $5,167 | | $10,616 | | $31,019 | | $35,952 |
| Diluted earnings per common share | | $0.09 | | $0.13 | | $0.55 | | $0.69 |
| Restructuring costs | | 0.04 | | 0.01 | | 0.30 | | 0.15 |
| Other costs | | 0.04 | | 0.04 | | 0.20 | | 0.18 |
| Refranchising transaction expense (gain), net | | (0.05) | | 0.01 | | (0.08) | | 0.01 |
| Technology Transformation costs | | 0.06 | | 0.18 | | 0.08 | | 0.18 |
| Tax effect of adjustments | | (0.02) | | (0.05) | | (0.11) | | (0.12) |
| Adjusted diluted earnings per common share | | $0.16 | | $0.32 | | $0.94 | | $1.09 |
Footnotes to Non-GAAP Financial Measures
For the three and nine months ended September 27, 2026, represents costs associated with the Enterprise Transformation Plan. These amounts are inclusive of $0.6 million and $1.8 million for the three and nine months ended September 27, 2026, respectively, of non-cash stock-based compensation and depreciation expenses, which are excluded from adjusted EBITDA above but are reflected as adjustments to non-GAAP diluted EPS. For the three and nine months ended September 28, 2025, represents costs associated with the International Transformation Plan. Please refer to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 27, 2026 for more information about the Enterprise Transformation Plan and International Transformation Plan, respectively.
For the three and nine months ended September 27, 2026, represents costs associated with project-based strategic initiatives not related to our ongoing operations as well as realizable insurance recoveries arising from tornadoes that damaged the Texas QC Center as well as the restaurant support center and QC Center in Louisville, Kentucky.
For the three and nine months ended September 28, 2025, other costs were comprised of the following:
i.Losses on disposal of equipment incurred in connection with the termination of a COVID-era program that pre-purchased store equipment due to supply chain challenges;
ii.Costs associated with project-based strategic initiatives that are not related to our ongoing operations; and iii.Costs incurred, net of anticipated insurance recoveries, arising from tornadoes that damaged the Texas QC Center as well as the restaurant support center and QC Center in Louisville, Kentucky.
Represents refranchising (gain) expense associated with refranchising transactions, including net (gain) loss attributable to noncontrolling interest of approximately ($0.1) and $0.3 million for the three and nine months ended September 27, 2026, respectively, and $0.1 million for both the three and nine months ended September 28, 2025. Please refer to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 27, 2026 for more information on the Domestic Company-owned restaurant refranchising transactions.
Represents costs associated with the ongoing development and deployment of our new point-of-sale system and omnichannel platform. These amounts are inclusive of $1.1 million and $2.0 million of non-cash accelerated depreciation expense related to the shortened useful life of legacy capitalized software assets for the three and nine months ended September 27, 2026, respectively.
The tax effect on non-GAAP adjustments was calculated by applying the marginal tax rates of 23.2% for the three and nine months ended September 27, 2026 and 22.7% for the three and nine months ended September 28, 2025.
Papa John’s International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
| In thousands, except per share amounts | September 27, 2026 | December 28, 2025 |
| (Unaudited) | |
| Assets | | |
| Current assets: | | |
| Cash, cash equivalents, and restricted cash | $26,760 | $36,950 |
| Accounts receivable, net | 93,511 | 103,068 |
| Notes receivable, current portion | 1,551 | 3,387 |
| Income tax receivable | 2,764 | 6,189 |
| Inventories | 31,966 | 34,336 |
| Prepaid expenses and other current assets | 50,966 | 48,895 |
| Assets held for sale | - | 4,607 |
| Total current assets | 207,518 | 237,432 |
| Property and equipment, net | 238,429 | 251,312 |
| Finance lease right-of-use assets, net | 33,264 | 39,039 |
| Operating lease right-of-use assets, net | 149,320 | 161,606 |
| Notes receivable, less current portion, net | 3,832 | 3,262 |
| Goodwill | 65,054 | 67,576 |
| Other assets | 75,401 | 77,281 |
| Total assets | $772,818 | $837,508 |
| Liabilities, Redeemable noncontrolling interests and Stockholders’ deficit | | |
| Current liabilities: | | |
| Accounts payable | $67,239 | $61,218 |
| Income and other taxes payable | 9,325 | 8,941 |
| Accrued expenses and other current liabilities | 137,414 | 169,015 |
| Current deferred revenue | 9,187 | 13,096 |
| Current finance lease liabilities | 10,044 | 9,999 |
| Current operating lease liabilities | 23,461 | 23,725 |
| Current portion of long-term debt | 11,247 | 4,997 |
| Total current liabilities | 267,917 | 290,991 |
| Deferred revenue | 16,826 | 19,294 |
| Long-term finance lease liabilities | 25,241 | 30,804 |
| Long-term operating lease liabilities | 143,832 | 156,405 |
| Long-term debt, less current portion, net | 700,138 | 710,436 |
| Other long-term liabilities | 56,464 | 62,264 |
| Total liabilities | 1,210,418 | 1,270,194 |
| Redeemable noncontrolling interests | 943 | 980 |
| Stockholders’ deficit: | | |
| Common stock ($0.01 par value per share; issued 49,303 at September 27, 2026 and 49,303 at December 28, 2025) | 493 | 493 |
| Additional paid-in capital | 457,499 | 457,112 |
| Accumulated other comprehensive loss | (4,884) | (6,452) |
| Retained earnings | 198,681 | 210,763 |
| Treasury stock (16,363 shares at September 27, 2026 and 16,502 shares at December 28, 2025, at cost) | (1,097,395) | (1,106,666) |
| Total stockholders’ deficit | (445,606) | (444,750) |
| Noncontrolling interests in subsidiaries | 7,063 | 11,084 |
| Total Stockholders’ deficit | (438,543) | (433,666) |
| Total Liabilities, Redeemable noncontrolling interests and Stockholders’ deficit | $772,818 | $837,508 |
Papa John’s International, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
| Three Months Ended | Nine Months Ended |
|---|
| In thousands, except per share amounts | September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 |
| Revenues: | | | | |
| Company-owned restaurant sales | $131,284 | $168,421 | $416,600 | $521,291 |
| Franchise royalties and fees | 43,106 | 47,051 | 137,269 | 143,409 |
| Commissary revenues | 222,480 | 229,581 | 675,939 | 693,098 |
| Other revenues | 21,322 | 21,424 | 64,569 | 68,317 |
| Advertising funds revenue | 36,651 | 41,677 | 121,472 | 129,514 |
| Total revenues | 454,843 | 508,154 | 1,415,849 | 1,555,629 |
| Costs and expenses: | | | | |
| Cost of sales | 328,598 | 369,130 | 1,008,515 | 1,107,342 |
| General and administrative expenses | 55,840 | 56,478 | 170,790 | 191,763 |
| Depreciation and amortization | 19,236 | 24,914 | 56,213 | 62,076 |
| Advertising funds expense | 36,936 | 41,461 | 122,153 | 129,822 |
| Total costs and expenses | 440,610 | 491,983 | 1,357,671 | 1,491,003 |
| Operating income | 14,233 | 16,171 | 58,178 | 64,626 |
| Net interest expense | (9,396) | (9,945) | (28,595) | (30,608) |
| Income before income taxes | 4,837 | 6,226 | 29,583 | 34,018 |
| Income tax expense | (1,556) | (1,753) | (10,664) | (10,531) |
| Net income | 3,281 | 4,473 | 18,919 | 23,487 |
| Net (income) loss attributable to noncontrolling interests | (144) | 234 | 6 | (27) |
| Net income attributable to the Company | $3,137 | $4,707 | $18,925 | $23,460 |
| Net income attributable to common shareholders | $3,137 | $4,447 | $18,200 | $22,742 |
| Basic earnings per common share | $0.09 | $0.14 | $0.55 | $0.69 |
| Diluted earnings per common share | $0.09 | $0.13 | $0.55 | $0.69 |
| Basic weighted average common shares outstanding | 33,055 | 32,889 | 33,002 | 32,834 |
| Diluted weighted average common shares outstanding | 33,129 | 33,043 | 33,085 | 32,962 |
Papa John’s International, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Nine Months Ended | |
|---|
| In thousands | September 27, 2026 | September 28, 2025 |
| Operating activities | | |
| Net income | $18,919 | $23,487 |
| Adjustments to reconcile net income to net cash provided by operating activities: | | |
| Provision for allowance for credit losses on accounts and notes receivable | 7,053 | 5,669 |
| Depreciation and amortization | 56,213 | 62,076 |
| Deferred income taxes | 557 | 1,731 |
| Stock-based compensation expense | 11,263 | 12,132 |
| Refranchising and impairment (gain) loss | (3,053) | 1,733 |
| Loss on disposal of property and equipment | 690 | 2,771 |
| Gain on insurance recoveries | (1,175) | - |
| Other | 1,924 | 1,082 |
| Changes in operating assets and liabilities, net of acquisitions: | | |
| Accounts receivable | 3,435 | (3,045) |
| Income tax receivable | 3,425 | (1,412) |
| Inventories | 2,130 | (1,544) |
| Prepaid expenses and other current assets | (607) | 1,426 |
| Other assets and liabilities | (10,159) | (972) |
| Accounts payable | 5,572 | 8,134 |
| Income and other taxes payable | 424 | (2,399) |
| Accrued expenses and other current liabilities | (28,817) | (2,087) |
| Deferred revenue | (6,370) | (4,739) |
| Advertising fund assets and liabilities | (2,915) | 2,149 |
| Net cash provided by operating activities | 58,509 | 106,192 |
| Investing activities | | |
| Purchases of property and equipment | (39,307) | (47,002) |
| Purchases of property and equipment related to damages from natural disasters | (2,646) | (5,121) |
| Insurance proceeds related to damages from natural disasters | 850 | 3,300 |
| Repayments of notes issued | 1,703 | 5,703 |
| Proceeds from dispositions and refranchising, net of cash transferred | 15,993 | 831 |
| Proceeds from investments | 4,582 | 4,739 |
| Other | - | (68) |
| Net cash used in investing activities | (18,825) | (37,618) |
| Financing activities | | |
| Net proceeds (repayments) of revolving credit facilities | (2,811) | (210,042) |
| Payments on term loan | (2,500) | - |
| Proceeds from term loan | - | 200,000 |
| Debt issuance costs | - | (3,223) |
| Proceeds from exercise of stock options | - | 397 |
| Dividends paid to common stockholders | (30,864) | (45,817) |
| Tax payments for equity award issuances | (1,918) | (1,791) |
| Distributions to noncontrolling interests | (4,052) | (387) |
| Principal payments on finance leases | (7,719) | (7,455) |
| Other | 196 | 110 |
| Net cash used in financing activities | (49,668) | (68,208) |
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (206) | 651 |
| Change in cash, cash equivalents, and restricted cash | (10,190) | 1,017 |
| Cash, cash equivalents, and restricted cash at beginning of period | 36,950 | 37,955 |
| Cash, cash equivalents, and restricted cash at end of period | $26,760 | $38,972 |
Papa John’s International, Inc. and Subsidiaries
Segment Information
The following tables present the operating results of our segments. We have four reportable segments: Domestic Company-owned restaurants, North America franchising, North America commissaries, and International. Under ASC 280, Segment Reporting, our segment performance is evaluated based on segment adjusted EBITDA. See the Company’s Form 10-Q for the quarter ended September 27, 2026 for further information on segments, including reconciliations of segment measures to consolidated measures for the quarter ended September 27, 2026.
| Three Months Ended September 27, 2026 |
|---|
| In thousands, unaudited | Domestic Company-Owned Restaurants | North America Franchising | North America Commissaries | International |
| Revenues from external customers | $128,049 | $29,984 | $202,335 | $44,996 |
| Intersegment revenues | - | 216 | 41,724 | - |
| Segment revenue | $128,049 | $30,200 | $244,059 | $44,996 |
| Less segment expenses : | | | | |
| Cost of sales | $118,220 | $ - | $216,423 | $23,330 |
| General and administrative expenses | 8,748 | 9,955 | 7,718 | 8,805 |
| Advertising funds expense | - | - | - | 5,194 |
| Segment adjusted EBITDA | $1,081 | $20,245 | $19,918 | $7,667 |
| Three Months Ended September 28, 2025 |
| In thousands, unaudited | Domestic Company-Owned Restaurants | North America Franchising | North America Commissaries | International |
| Revenues from external customers | $165,194 | $33,797 | $209,403 | $44,721 |
| Intersegment revenues | - | 1,161 | 50,086 | - |
| Segment revenue | $165,194 | $34,958 | $259,489 | $44,721 |
| Less segment expenses : | | | | |
| Cost of sales | $150,917 | $ - | $234,448 | $24,044 |
| General and administrative expenses | 10,335 | 9,452 | 5,839 | 10,858 |
| Advertising funds expense | - | - | - | 4,519 |
| Segment adjusted EBITDA | $3,942 | $25,506 | $19,202 | $5,300 |
Segment expenses excludes depreciation and amortization, stock-based compensation expense, and certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business.
| Nine Months Ended September 27, 2026 |
|---|
| In thousands, unaudited | Domestic Company-Owned Restaurants | North America Franchising | North America Commissaries | International |
| Revenues from external customers | $406,656 | $97,474 | $617,956 | $133,263 |
| Intersegment revenues | - | 681 | 128,686 | - |
| Segment revenue | $406,656 | $98,155 | $746,642 | $133,263 |
| Less segment expenses : | | | | |
| Cost of sales | $364,651 | $ - | $666,709 | $69,118 |
| General and administrative expenses | 26,404 | 28,817 | 25,234 | 25,305 |
| Advertising funds expense | - | - | - | 15,659 |
| Segment adjusted EBITDA | $15,601 | $69,338 | $54,699 | $23,181 |
| Nine Months Ended September 28, 2025 |
| In thousands, unaudited | Domestic Company-Owned Restaurants | North America Franchising | North America Commissaries | International |
| Revenues from external customers | $511,786 | $104,708 | $637,168 | $128,016 |
| Intersegment revenues | - | 3,664 | 154,356 | - |
| Segment revenue | $511,786 | $108,372 | $791,524 | $128,016 |
| Less segment expenses : | | | | |
| Cost of sales | $461,915 | $ - | $707,174 | $68,234 |
| General and administrative expenses | 31,033 | 28,776 | 26,145 | 28,983 |
| Advertising funds expense | - | - | - | 14,479 |
| Segment adjusted EBITDA | $18,838 | $79,596 | $58,205 | $16,320 |
Segment expenses excludes depreciation and amortization, stock-based compensation expense, and certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business.
Papa John’s International, Inc. and Subsidiaries
Supplemental Information - All Other
| In thousands, unaudited | Three Months Ended | Nine Months Ended |
| All Other | September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 |
| Revenues from external customers | $49,479 | $55,039 | $160,500 | $173,951 |
| Intersegment revenues | 23,946 | 13,827 | 48,867 | 43,007 |
| All Other revenue | $73,425 | $68,866 | $209,367 | $216,958 |
| Cost of sales | $15,210 | $14,928 | $46,630 | $40,109 |
| General and administrative expenses | 2,390 | 2,927 | 7,447 | 7,866 |
| Advertising funds expense | 52,272 | 46,513 | 144,764 | 145,087 |
| All Other costs and expenses | $69,872 | $64,368 | $198,841 | $193,062 |
| All Other adjusted EBITDA | $3,553 | $4,498 | $10,526 | $23,896 |
All other business units that do not meet the quantitative or qualitative thresholds for determining reporting segments, which are not operating segments, we refer to as “All Other.” These consist of operations that derive revenues from franchise contributions to marketing funds as well as information systems and related services used in restaurant operations, including our point-of-sale system, online and other technology-based ordering platforms. Our largest marketing fund is Papa Johns Marketing Fund (“PJMF”). PJMF is a consolidated nonstock corporation, intended to operate at break-even for the purpose of designing and administering advertising and promotional programs for all participating Domestic restaurants. Technology-based franchisee fees are meant to offset the costs of building, operating, and depreciating technology that supports franchisee operations. As such, these fees may vary from period to period, as they are designed to operate near break-even over time including the impact of depreciation. All Other is not a reportable segment under ASC 280, and this information is presented for informational purposes only. Please refer to the Company’s Form 10-Q for the third quarter ended September 27, 2026 for further information on segments, including reconciliations of segment measures to consolidated measures.
All Other costs and expenses excludes depreciation and amortization, stock-based compensation expense, and certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business.
See the Company’s Form 10-Q for the third quarter ended September 27, 2026 for further information on segments, including reconciliations of segment measures to consolidated measures for the quarter ended September 27, 2026.
Contacts
Papa Johns Investor Relations investor_relations@papajohns.com
Source: Papa John’s International, Inc.