Annual Report for Fiscal Year Ending 12-28, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

(Unaudited; tabular amounts in millions, except percentages and store data)

Overview

Our fiscal year typically includes 52 weeks, comprised of three twelve-week quarters and one sixteen-week quarter.

In this section, we discuss the results of our operations for the fiscal year ended December 28, 2025 compared to the fiscal year ended December 29, 2024. For a discussion of the fiscal year ended December 29, 2024 compared to the fiscal year ended December 31, 2023, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024.

Description of the Business

Domino's is the largest pizza company in the world with more than 22,100 locations in over 90 markets around the world as of December 28, 2025, and operates two distinct service models within its stores, with a significant business in both delivery and carryout. We are a highly recognized global brand, and we focus on value while serving neighborhoods locally through our large worldwide network of franchise owners and U.S. Company-owned stores through both the delivery and carryout service models. We have been selling quality, affordable food to our customers since 1960. We became "Domino's Pizza" in 1965 and opened our first franchised store in 1967. Over the past 65 years, we have built Domino's into one of the most widely-recognized consumer brands in the world. We believe our commitment to value, convenience, quality and new products continues to keep consumers engaged with the brand.

We are primarily a franchisor, with approximately 99% of Domino's global stores owned and operated by our independent franchisees as of December 28, 2025. Franchising enables an individual to be a business owner and maintain control over all employment-related matters and pricing decisions, while also benefiting from the strength of the Domino's global brand and operating system with limited capital investment by us.

Domino's business model is straightforward: Domino's stores handcraft and serve quality food at a competitive price, with easy ordering access and efficient service, enhanced by our technological innovations. Our hand-tossed dough is made fresh and distributed to stores around the world by us and our franchisees.

Domino's generates revenues and earnings by charging royalties and fees to our franchisees. Royalties are ongoing percent-of-sales fees for use of the Domino's®brand marks. We also generate revenues and earnings by selling food and other products to franchisees through our supply chain operations primarily in the U.S. and Canada and by operating a number of Company-owned stores in the U.S. Franchisees profit by selling pizza and other complementary items to their local customers. In our international markets, we generally grant geographical rights to the Domino's Pizza®brand to master franchisees. These master franchisees are charged with developing their geographical area, and they may profit by sub-franchising and selling food, and to a lesser extent, other products to those sub-franchisees, as well as by running pizza stores. We believe that everyone in the system can benefit from the franchise model, including the end consumer, who can purchase Domino's menu items for themselves and their family conveniently and economically.

Domino's business model can yield strong returns for our franchise owners and our Company-owned stores. It can also yield significant cash flows to us, through consistent franchise royalty and supply chain revenue streams, all within an asset-light model. We have historically returned cash to shareholders through dividend payments and share repurchases. Domino's financial results are driven largely by retail sales at our franchised and Company-owned stores. Changes in retail sales are primarily driven by same store sales growth and net store growth. We actively monitor both of these metrics, as they directly impact our revenues and profits, and we strive to consistently increase both metrics. Retail sales drive royalty payments from franchisees, as well as Company-owned store and supply chain revenues.

At Domino's, we believe we have a proven business model for success that has historically driven strong returns for our shareholders. Our Hungry for MORE strategy aims to generate MORE sales, MORE stores and MORE profits. The strategic imperatives of our Hungry for MORE strategy are as follows:

Most Delicious Food: We believe we have the best pizza in the industry, and our menu has even more mouthwatering options beyond pizza. We will continue to showcase the breadth of our menu, while highlighting the deliciousness of our food through our innovative marketing promotions.

Operational Excellence: We are relentless in our focus on convenience, consistency and efficiency for our customers.

Renowned Value:We are committed to continuing to offer competitive pricing and personalized value for our customers that is innovative and memorable.

Enhanced by Best-in-Class Franchisees:Our franchisees play a vital role in driving results and excitement across the more than 90 markets in which we operate.

Critical accounting estimates

The following discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires our management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. On an ongoing basis, our management evaluates its estimates, including those related to long-lived assets, casualty insurance reserves and income taxes. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from those estimates, and changes in estimates could materially affect our results of operations and financial condition for any particular period.

We believe that our most critical accounting estimates are:

Long-lived assets

We record long-lived assets, including property, plant and equipment and capitalized software, at cost. For acquisitions of franchise operations, we estimate the fair values of the assets and liabilities acquired based on physical inspection of assets, historical experience and other information available to us regarding the acquisition. We depreciate and amortize long-lived assets using useful lives determined by us based on historical experience and other information available to us. We evaluate long-lived assets, including property, plant, equipment and finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Our periodic evaluation is based on various analyses including the projection of undiscounted cash flows. If we determine that the carrying amount of an asset (or asset group) may not be recoverable, we compare the net carrying value of the asset group to the undiscounted net cash flows to be generated from the use and eventual disposition of that asset group.

For Company-owned stores, we perform related impairment tests on an operating market basis, which we have determined to be the lowest level for which identifiable cash flows are largely independent of other cash flows. If the carrying amount of a long-lived asset exceeds the amount of the expected future undiscounted cash flows of that asset, we estimate the fair value of the asset. If the carrying amount of the asset exceeds the estimated fair value of the asset, an impairment loss is recognized, and the asset is written down to its estimated fair value. We have not made any significant changes in the methodology used to project the future market cash flows of Company-owned stores during the years presented. Same store sales fluctuations and the rates at which operating costs will fluctuate in the future are key factors in determining projected cash flows used to evaluate recoverability of the related assets. If our same store sales significantly decline or if operating costs increase and we are unable to recover these costs, the carrying value of our Company-owned stores, by market, may not be recoverable and we may be required to recognize an impairment charge.

We did not record any impairment losses on long-lived assets in 2025, 2024 and 2023.

Casualty insurance reserves

For certain periods prior to December 1998 and for periods after December 2001, we maintain insurance coverage for workers' compensation, general liability and owned and non-owned automobile liabilities. We are generally responsible for up to $1.0 million per occurrence under these retention programs for workers' compensation and up to $2.0 million per occurrence under these retention programs for general liability, depending on policy year and line of coverage. We are generally responsible for up to between $2.0 million and $5.5 million per occurrence under these retention programs for owned and non-owned automobile liabilities, depending on policy year and line of coverage. Casualty insurance reserves are based on undiscounted actuarial estimates. These estimates are based on historical information and on certain assumptions about future events. There is inherent uncertainty in the ultimate cost for known claims under our insurance coverages, and for incidents that have occurred that will be subject to a claim, but have yet to be reported to us. Analyses of historical trends and actuarial valuation methods are utilized to estimate the ultimate claim costs for claims incurred as of the balance sheet date and for claims incurred but not yet reported. When estimating these liabilities, several factors are considered, including the severity, duration and frequency of claims, legal cost associated with claims, healthcare trends and projected inflation.

Our methodology for determining our exposure has remained consistent throughout the years presented. Management believes that the various assumptions developed, and actuarial methods used to determine our casualty insurance reserves are reasonable and provide meaningful data that management uses to make its best estimate of our exposure to these risks. Changes in assumptions for such factors as medical costs and legal actions, as well as changes in actual experience, could cause our estimates to change in the near term which could result in an increase or decrease in the related expense in future periods. A 10% change in our casualty insurance liability at December 28, 2025 would have affected our income before provision for income taxes by approximately $5.1 million in 2025. We had accruals for casualty insurance reserves of $51.2 million and $50.7 million at December 28, 2025 and December 29, 2024, respectively.

Income taxes

The U.S. Federal statutory income tax rate was 21% in each of 2025, 2024 and 2023. Our Federal income tax provision calculated based on the Federal statutory rate was $161.8 million, $151.7 million and $137.0 million in 2025, 2024 and 2023, respectively.

We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities. We measure deferred taxes using current enacted tax rates that will apply in the years in which we expect the temporary differences to be recovered or paid. Judgment is required in determining the provision for income taxes, related reserves and deferred taxes. These include establishing a valuation allowance related to the ability to realize certain deferred tax assets, if necessary. On an ongoing basis, management will assess whether it remains more likely than not that the deferred tax assets will be realized. Our accounting for deferred taxes represents our best estimate of future events. Except with respect to certain foreign tax credits and interest deductibility in separately filed states, our deferred tax assets assume that we will generate sufficient taxable income in specific tax jurisdictions, based on our estimates and assumptions. As of December 28, 2025 and December 29, 2024, we had total foreign tax credits of $25.1 million and $21.0 million, respectively, each of which were fully offset with a corresponding valuation allowance. We also had valuation allowances related to interest deductibility in separately filed states of $1.2 million and $1.4 million as of December 28, 2025 and December 29, 2024, respectively. We believe our remaining deferred tax assets will be realized. Changes in our current estimates due to unanticipated events could have a material impact on our financial condition and results of operations.

Fiscal 2025 Highlights

Our Hungry for MORE strategy aims to generate MORE sales, MORE stores and MORE profits.

Excluding the negative impact of foreign currency, Domino's experienced global retail sales growth during 2025, driven by same store sales growth and net store growth in both our U.S. and international businesses. These factors, as well as gross margin dollar improvement within supply chain, also contributed to an increase in income from operations. Overall, we believe our global retail sales growth, excluding foreign currency impact, marketing initiatives, operations and emphasis on technology have combined to strengthen our brand. These financial and statistical measures are described in additional detail below.

Statistical Measures

The tables below outline certain statistical measures we utilize to analyze our performance. This historical data is not necessarily indicative of results to be expected for any future period.

Global Retail Sales

Global retail sales is a commonly used statistical measure in the quick-service restaurant industry that is important to understanding performance. Global retail sales refers to total worldwide retail sales at Company-owned and franchised stores. We believe global retail sales information is useful in analyzing revenues because franchisees pay royalties and, in the U.S., advertising fees that are based on a percentage of franchise retail sales. We review comparable industry global retail sales information to assess business trends and to track the growth of the Domino's Pizza brand, and we believe they are indicative of the financial health of our franchisee base. In addition, supply chain revenues are directly impacted by changes in franchise retail sales in the U.S. and Canada. As a result, sales by Domino's franchisees have a direct effect on our profitability. Retail sales for franchised stores are reported to us by our franchisees and are not included in our revenues. The amounts below are presented in millions of U.S. dollars.

Global Retail Sales Growth, Excluding Foreign Currency Impact

Global retail sales growth, excluding foreign currency impact is a commonly used statistical measure in the quick-service restaurant industry that is important to understanding performance. Global retail sales growth, excluding foreign currency impact, is calculated as the change of international local currency global retail sales against the comparable period of the prior year. Changes in global retail sales growth, excluding foreign currency impact are primarily driven by same store sales growth and net store growth.

Same Store Sales Growth

Same store sales growth is a commonly used statistical measure in the quick-service restaurant industry that is important to understanding performance. Same store sales growth is calculated for a given period by including only sales from stores that also had sales in the comparable weeks of both periods. International same store sales growth is calculated similarly to U.S. same store sales growth. Changes in international same store sales are reported on a constant dollar basis, which reflects changes in international local currency sales. Same store sales growth for transferred stores is reflected in their current classification.

U.S. same store sales increased 3.0% during 2025, rolling over an increase in U.S. same store sales of 3.2% in 2024. The increase in U.S. same store sales was primarily driven by both higher customer transaction counts and higher average ticket, each driven in part by the launch of our Parmesan Stuffed Crust pizza. Multiple windows of our "Best Deal Ever" promotion also drove higher customer transaction counts during 2025. International same store sales (excluding foreign currency impact) increased 1.9% during 2025, rolling over an increase in international same store sales (excluding foreign currency impact) of 1.6% in 2024. The increase in international same store sales was attributable to higher customer transaction counts.

Net Store Growth

Net store growth is a commonly used statistical measure in the quick-service restaurant industry that is important to understanding performance. Net store growth is calculated by netting gross store openings with gross store closures during the period. Transfers between Company-owned stores and franchised stores are excluded from the calculation of net store growth.

Income Statement Data

2025 compared to 2024

Revenues

Revenues primarily consist of retail sales from our Company-owned stores, royalties and fees and advertising contributions from our U.S. franchised stores, royalties and fees from our international franchised stores and sales of food and, to a lesser extent, other products from our supply chain centers to substantially all of our U.S. franchised stores and certain international franchised stores. Company-owned store and franchised store revenues may vary from period to period due to changes in store count mix. Supply chain revenues may vary significantly from period to period as a result of fluctuations in commodity prices as well as the mix of products we sell.

Consolidated revenues increased $233.6 million, or 5.0%, in 2025 primarily due to higher supply chain revenues, higher U.S. franchise advertising revenues and higher U.S. franchise royalties and fees. The increase in supply chain revenues was primarily attributable to higher order volumes and an increase in our food basket pricing to stores, but these increases were partially offset by a shift in the relative mix of products we sell and the transition of our equipment and supplies business to a third-party supplier in 2024. The increases in U.S. franchise advertising revenues and U.S. franchise royalties and fees were driven primarily by same store sales growth and net store growth. U.S. franchise advertising revenues also increased as a result of a decrease in advertising incentives and the increase in the advertising contribution rate. These changes in revenues are described in more detail below.

U.S. Stores

U.S. Company-owned Stores

Revenues from U.S. Company-owned store operations decreased $18.7 million, or 4.8%, in 2025 primarily driven by the refranchising of the Maryland market in May 2025, but this decrease was partially offset by higher same store sales.

U.S. Company-owned same store sales increased 1.5% in 2025 and increased 3.5% in 2024.

U.S. Franchise Royalties and Fees

Revenues from U.S. franchise royalties and fees increased $38.9 million, or 6.1%, in 2025 primarily due to higher same store sales and an increase in the average number of U.S. franchised stores open during the period resulting from net store growth.

U.S. franchise same store sales increased 3.0% in 2025 and increased 3.2% in 2024.

U.S. Franchise Advertising

Revenues from U.S. franchise advertising increased $49.6 million, or 9.7%, in 2025 primarily due to a decrease in advertising incentives, higher same store sales, an increase in the average number of U.S. franchised stores open during the period resulting from net store growth and the return to the standard 6.0% advertising contribution rate at the beginning of the second quarter of 2024 following the end of the temporary reduction to 5.75%.

Supply Chain

Supply chain revenues increased $143.7 million, or 5.1%, in 2025 due primarily to an increase in our food basket pricing to stores and higher order volumes. These increases were partially offset by a shift in the relative mix of products we sell and the transition of our equipment and supplies business to a third-party supplier in 2024. Our food basket pricing to stores increased 3.5% during 2025, which resulted in an estimated $142 million increase in supply chain revenues. The food basket pricing change, a statistical measure utilized by management, is calculated as the percentage change of the food basket (including both food and cardboard products) purchased by an average U.S. store (based on average weekly unit sales) from our U.S. supply chain centers against the comparable period of the prior year. We believe this measure is important to understanding Company performance because as our food basket prices fluctuate, our revenues, cost of sales and gross margin percentages in our supply chain segment also fluctuate.

International Franchise Royalties and Fees

Revenues from international franchise royalties and fees increased $20.0 million, or 6.3%, in 2025 primarily due to an increase in the average number of international franchised stores open during the period resulting from net store growth and higher same store sales (excluding foreign currency impact). These increases were partially offset by the negative impact of changes in foreign currency exchange rates of approximately $0.6 million in 2025. The impact of changes in foreign currency exchange rates on international franchise royalty revenues, a statistical measure utilized by management, is calculated as the difference in international franchise royalty revenues resulting from translating current year local currency results to U.S. dollars at current year exchange rates as compared to prior year exchange rates. We believe this measure is important to understanding Company performance given the significant variability in international franchise royalty revenues that can be driven by changes in foreign currency exchange rates.

International franchise same store sales, excluding the impact of changes in foreign currency exchange rates, increased 1.9% in 2025 and increased 1.6% in 2024.

Cost of Sales / Gross Margin

Consolidated cost of sales consists of U.S. Company-owned store and supply chain costs incurred to generate related revenues. Components of consolidated cost of sales primarily include food and labor costs, as well as other costs including delivery, occupancy costs (including rent, telephone, utilities and depreciation), insurance expense and other. Consolidated gross margin (which we define as revenues less cost of sales) increased $125.1 million, or 6.8%, in 2025 due primarily to higher U.S. franchise advertising, royalties and fees revenues, as well as gross margin dollar growth within supply chain discussed herein. Franchise revenues do not have a cost of sales component, so changes in these revenues have a disproportionate effect on gross margin. We generally update our supply chain gross margin structure on an annual basis. However, as food basket prices fluctuate, revenues, cost of sales and gross margin percentages in our supply chain segment also fluctuate, and further, cost of sales, gross margins and gross margin percentages for our U.S. Company-owned stores also fluctuate.

Consolidated gross margin as a percentage of revenues increased 0.7 percentage points to 40.0% in 2025 from 39.3% in 2024. U.S. Company-owned store gross margin decreased 2.4 percentage points in 2025 and supply chain gross margin increased 0.4 percentage points in 2025. Changes in the significant components of gross margin are described in more detail below.

U.S. Company-Owned Stores Gross Margin

U.S. Company-owned store gross margin (which does not include certain store-level costs such as royalties and advertising) decreased $12.4 million, or 18.8%, in 2025. As a percentage of store revenues, U.S. Company-owned store gross margin decreased 2.4 percentage points in 2025. These changes in gross margin as a percentage of revenues are discussed in additional detail below.

Supply Chain Gross Margin

Supply chain gross margin increased $28.9 million, or 9.1%, in 2025. As a percentage of supply chain revenues, supply chain gross margin increased 0.4 percentage points in 2025. These changes in gross margin as a percentage of revenues are discussed in additional detail below.

General and Administrative Expenses

General and administrative expenses increased $4.6 million, or 1.0%, in 2025, primarily due to approximately $5 million in severance expenses associated with an organizational realignment that took place in the first quarter of 2025, as well as higher computer and insurance expenses. These increases were partially offset by expenses related to our Worldwide Rally in the second quarter of 2024, which takes place every two years and did not reoccur in 2025.

U.S. Franchise Advertising Expenses

U.S. franchise advertising expenses increased $49.6 million, or 9.7%, in 2025, consistent with the increase in U.S. franchise advertising revenues, as discussed above. U.S. franchise advertising costs are accrued and expensed when the related U.S. franchise advertising revenues are recognized, as our consolidated not-for-profit advertising fund is obligated to expend such revenues on advertising and other activities that promote the Domino's brand, and these revenues cannot be used for general corporate purposes.

Refranchising Gain

During 2025, we refranchised 37 U.S. Company-owned stores, primarily in Maryland, for net proceeds of $8.6 million. The pre-tax refranchising gain associated with the sale of the related assets and liabilities, including a $1.4 million reduction in goodwill, was $4.0 million and was recorded in refranchising gain in our consolidated statements of income.

Other (Expense) Income

Other expense was $2.5 million in 2025, while other income was $22.1 million in 2024, each representing the net realized and unrealized losses and gains on our investment in DPC Dash. The recorded amount of our investment is based on the active exchange quoted price for the equity security. Additional information related to our investment in DPC Dash is included in Note 1 and Note 4 to our consolidated financial statements.

Interest Expense, Net

Interest expense, net, increased $2.2 million, or 1.3%, in 2025, due to lower interest income on our cash equivalents. Our weighted average borrowing rate was 3.8% in both 2025 and 2024.

Provision for Income Taxes

Provision for income taxes increased $30.6 million, or 22.2%, in 2025 due to a higher effective tax rate, as well as an increase in income before provision for income taxes. The effective tax rate increased to 21.9% during 2025, as compared to 19.1% in 2024. The increase in the effective tax rate was driven by a 2.7 percentage point unfavorable change in the impact of excess tax benefits from equity-based compensation, which is recorded as a reduction to the provision for income taxes.

We applied the relevant provisions of the One Big Beautiful Bill Act following its enactment on July 4, 2025, including provisions related to bonus depreciation, research and development and foreign derived intangible income and it did not have a material impact on our effective tax rate.

Segment Income

We evaluate the performance of our reportable segments and allocate resources to them based on earnings before interest, taxes, depreciation, amortization and other, referred to as Segment Income. Segment Income for each of our reportable segments is summarized in the table below.

U.S. Stores

U.S. stores Segment Income increased $10.0 million, or 1.8%, in 2025, primarily due to higher U.S. franchise royalties and fees revenues as discussed above, but this increase was partially offset by the decrease in U.S. Company-owned store gross margin as discussed above, as well as a shift in the relative mix of labor cost associated with internally developed software. U.S. franchise revenues do not have a cost of sales component, so changes in these revenues have a disproportionate effect on U.S. stores Segment Income. U.S. franchise advertising costs are accrued and expensed when the related U.S. franchise advertising revenues are recognized and had no impact on U.S. stores Segment Income.

Supply Chain

Supply chain Segment Income increased $39.5 million, or 14.1%, in 2025, primarily due to the increase in supply chain gross margin as discussed above.

International Franchise

International franchise Segment Income increased $27.9 million, or 10.7%, in 2025, primarily due to higher international franchise royalties and fees revenues as discussed above. In addition, lower general and administrative expenses also contributed to the increase in international franchise Segment Income in 2025. The decrease in general and administrative expenses primarily related to our Worldwide Rally in the second quarter of 2024, which did not reoccur in 2025 as discussed above. International franchise revenues do not have a cost of sales component, so changes in these revenues have a disproportionate effect on international franchise Segment Income.

New Accounting Pronouncements

The impact of new accounting pronouncements adopted and the estimated impact of new accounting pronouncements that we will adopt in future years is included in Note 1 to the consolidated financial statements.

Liquidity and Capital Resources

Historically, our receivable collection periods and inventory turn rates are faster than the normal payment terms on our current liabilities resulting in efficient deployment of working capital. We generally collect our receivables within three weeks from the date of the related sale and we generally experience multiple inventory turns per month. In addition, our sales are not typically seasonal, which further limits variations in our working capital requirements. As of December 28, 2025, we had working capital of $134.4 million, excluding restricted cash and cash equivalents of $216.1 million, advertising fund assets, restricted of $117.5 million and advertising fund liabilities of $115.4 million. Working capital includes total unrestricted cash and cash equivalents of $125.7 million.

Our primary sources of liquidity are cash flows from operations and availability of borrowings under our variable funding notes. During 2025, we experienced an increase in both U.S. and international retail sales (excluding foreign currency impact). Additionally, both our U.S. and international businesses grew store counts during 2025. These factors contributed to our continued ability to generate positive operating cash flows. In addition to our cash flows from operations, we have a variable funding note facility. Our Series 2025-1 Variable Funding Senior Secured Notes, Class A-1 Notes (the "2025 Variable Funding Notes"), allows for advances of up to $320.0 million and issuance of certain other credit instruments, including letters of credit. The letters of credit primarily relate to our casualty insurance programs. As of December 28, 2025, we had no outstanding borrowings and $263.6 million of available borrowing capacity under our 2025 Variable Funding Notes, net of letters of credit issued of $56.4 million.

Our primary sources of liquidity could be adversely affected by the occurrence of any of the events described in Item 1A. Risk Factors. There can be no assurance that our business will generate sufficient cash flows from operations or that future borrowings will be available under our 2025 Variable Funding Notes or otherwise to enable us to service our indebtedness, or to make anticipated capital expenditures. Our future operating performance and our ability to service, extend or refinance our Notes (defined below) and to service, extend or refinance our 2025 Variable Funding Notes will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control.

Restricted Cash

As of December 28, 2025, we had $165.8 million of restricted cash and cash equivalents held for future principal and interest payments and other working capital requirements of our asset-backed securitization structure, $50.1 million of restricted cash equivalents held in a three-month interest reserve as required by the related debt agreements and $0.2 million of other restricted cash for a total of $216.1 million of restricted cash and cash equivalents. As of December 28, 2025, we also held $92.2 million of advertising fund restricted cash and cash equivalents which can only be used for activities that promote the Domino's brand.

Long-Term Debt

2025 Refinancing

On September 5, 2025, we completed a refinancing transaction (the "2025 Refinancing") in which certain of our subsidiaries issued new notes pursuant to an asset-backed securitization. The notes consist of $500.0 million Series 2025-1 4.930% Fixed Rate Senior Secured Notes, Class A-2-I with an anticipated repayment date of July 2030 (the "2025 Five-Year Notes") and $500.0 million Series 2025-1 5.217% Fixed Rate Senior Secured Notes, Class A-2-II with an anticipated repayment date of July 2032 (the "2025 Seven-Year Notes," and collectively with the 2025 Five-Year Notes, the "2025 Notes") in an offering exempt from registration under the Securities Act of 1933, as amended.

The proceeds from the issuance of the 2025 Notes, as well as $160.0 million of our unrestricted cash and cash equivalents, were used to (i) repay the remaining $742.0 million in outstanding principal under our 2015 Ten-Year Notes and the remaining $402.7 million in outstanding principal under the Company's 2018 7.5-Year Notes, (ii) prefund a portion of the interest payable on the 2025 Notes and (iii) pay transaction fees and expenses. In connection with the 2025 Refinancing, we capitalized $15.4 million of debt issuance costs, which are being amortized into interest expense over the five and seven-year expected terms of the 2025 Notes. Additional information related to the 2025 Refinancing is included in Note 3 to our consolidated financial statements.

2021 Recapitalization

On April 16, 2021, we completed the 2021 Recapitalization in which certain of our subsidiaries issued notes pursuant to an asset-backed securitization. The notes consist of $850.0 million Series 2021-1 2.662% Fixed Rate Senior Secured Notes, Class A-2-I with an anticipated term of 7.5 years (the "2021 7.5-Year Notes") and $1.0 billion Series 2021-1 3.151% Fixed Rate Senior Secured Notes, Class A-2-II with an anticipated term of 10 years (the "2021 Ten-Year Notes", and, collectively with the 2021 7.5-Year Notes, the "2021 Notes"). Additional information related to the 2021 Recapitalization is included in Note 3 to our consolidated financial statements.

2019 Recapitalization

On November 19, 2019, we completed the 2019 Recapitalization in which certain of our subsidiaries issued $675.0 million Series 2019-1 3.668% Fixed Rate Senior Secured Notes, Class A-2 with an anticipated term of 10 years (the "2019 Notes") pursuant to an asset-backed securitization. Gross proceeds from the issuance of the 2019 Notes were $675.0 million. Additional information related to the 2019 Recapitalization is included in Note 3 to our consolidated financial statements.

2018 Recapitalization

On April 24, 2018, we completed the 2018 Recapitalization in which certain of our subsidiaries issued notes pursuant to an asset-backed securitization. The notes consisted of $425.0 million Series 2018-1 4.116% Fixed Rate Senior Secured Notes, Class A-2-I with a term of 7.5 years (the "2018 7.5-Year Notes"), and $400.0 million Series 2018-1 4.328% Fixed Rate Senior Secured Notes, Class A-2-II with an anticipated term of 9.25 years (the "2018 9.25-Year Notes"). The 2018 7.5-Year Notes were repaid in connection with the 2025 Refinancing. Additional information related to the 2018 Recapitalization is included in Note 3 to our consolidated financial statements.

2017 Recapitalization

On July 24, 2017, we completed the 2017 Recapitalization in which certain of our subsidiaries issued notes pursuant to an asset-backed securitization. The notes consisted of $300.0 million Series 2017-1 Floating Rate Senior Secured Notes, Class A-2-I with an anticipated term of five years (the "2017 Floating Rate Notes"), $600.0 million Series 2017-1 3.082% Fixed Rate Senior Secured Notes, Class A-2-II with an anticipated term of five years (the "2017 Five-Year Notes"), and $1.0 billion Series 2017-1 4.118% Fixed Rate Senior Secured Notes, Class A-2-III with an anticipated term of 10 years (the "2017 Ten-Year Notes"). The 2017 Floating Rate Notes and the 2017 Five-Year Notes were repaid in connection with the 2021 Recapitalization. Additional information related to the 2017 Recapitalization is included in Note 3 to our consolidated financial statements.

2025 Variable Funding Notes

In connection with the 2025 Refinancing, certain of our subsidiaries issued the 2025 Variable Funding Notes. In connection with the issuance of the 2025 Variable Funding Notes, our previous $200.0 million Series 2021-1 and $120.0 million Series 2022-1 variable funding note facilities were canceled. Additional information related to the 2025 Variable Funding Notes is included in Note 3 to our consolidated financial statements.

Fixed-Rate Notes

The 2025 Notes, 2021 Notes, 2019 Notes, 2018 9.25-Year Notes and 2017 Ten-Year Notes are collectively referred to as the "Notes."

The Notes have original scheduled principal payments of $49.3 million in 2026, $1.34 billion in 2027, $836.4 million in 2028, $647.8 million in 2029, $495.0 million in 2030, $927.5 million in 2031 and $470.0 million in 2032. However, in accordance with our debt agreements, the payment of principal on the 2025 Notes may be suspended if either the Holdco Leverage Ratio or Senior Leverage Ratio is less than or equal to 5.5x total debt to either Consolidated Adjusted EBITDA or Securitized Net Cash Flow, each as defined in the indenture governing the securitized debt, and no catch-up provisions are applicable. Further, in accordance with our debt agreements, the payment of principal on the 2021 Notes, 2019 Notes, 2018 9.25-Year Notes and 2017 Ten-Year Notes may be suspended if the Holdco Leverage Ratio is less than or equal to 5.0x total debt to Consolidated Adjusted EBITDA, each as defined in the indenture governing the securitized debt, and no catch-up provisions are applicable. As of the end of the fourth quarter of 2025 and the end of the fourth quarter of 2024, we satisfied the non-amortization tests for each respective series of notes, and accordingly, the outstanding principal amounts of the notes have been classified as long-term debt in the consolidated balance sheet as of December 28, 2025. As of December 29, 2024, current portion of long-term debt included the outstanding principal amounts under the 2015 Ten-Year Notes and the 2018 7.5-Year Notes for which the anticipated repayment date was October 2025.

The Notes are subject to certain financial and non-financial covenants, including a debt service coverage ratio calculation. The covenant requires a minimum coverage ratio of 1.75x total debt service to Securitized Net Cash Flow, each as defined in the indenture governing the securitized debt. In the event that certain covenants are not met, the Notes may become due and payable on an accelerated schedule.

Leases

We lease certain retail store and supply chain center locations, supply chain vehicles, various equipment and our World Resource Center under leases with expiration dates through 2045. Refer to Note 5 to the consolidated financial statements for additional information regarding our leases, including future minimum rental commitments.

Capital Expenditures and Other Material Cash Requirements

In the past three years, we have spent approximately $338.8 million on capital expenditures. In 2025, we spent $120.6 million on capital expenditures which primarily related to investments in our consumer and store technology, supply chain centers, corporate store operations and other corporate capital expenditures. We plan to continue investing in consumer and store technology, supply chain centers and corporate store operations, and we expect that our capital expenditures will be approximately $120 million in 2026. We expect to continue to use our unrestricted cash and cash equivalents, cash flows from operations, any excess cash from our refinancing and recapitalization transactions and available borrowings under our 2025 Variable Funding Notes to, among other things, fund working capital requirements, invest in our core business and other strategic opportunities, repay outstanding borrowings under our securitized debt, pay dividends and repurchase and retire shares of our common stock.

Investments

We hold a non-controlling interest in DPC Dash, our master franchisee in China that owns and operates Domino's Pizza stores in that market.

As of December 28, 2025 and December 29, 2024, the fair value of our investment in DPC Dash was $36.1 million and $82.7 million, respectively. The fair value of our investment in DPC Dash was based on the active exchange quoted price for the equity security of HK$71.90 per share as of December 28, 2025 and HK$79.25 per share as of December 29, 2024. We owned 3,901,019 and 8,101,019 ordinary shares as of December 28, 2025 and December 29, 2024, representing 3.0% and 6.2% of DPC Dash's ordinary shares as of the respective dates. We sold 4,200,000 ordinary shares of our investment in DPC Dash in the second quarter of 2025 for net proceeds of $44.1 million. We sold 10,000,000 ordinary shares of our investment in DPC Dash in the fourth quarter of 2024 for $82.9 million. We recorded total net negative and positive adjustments to the carrying amount of our investment in DPC Dash of $2.5 million and $22.1 million in 2025 and 2024, respectively, with the net realized and unrealized losses and gains recorded in other expense and other income in our consolidated statements of income, respectively.

Share Repurchase Programs

Our share repurchase programs have historically been funded by excess operating cash flows, excess proceeds from our recapitalization transactions and borrowings under our variable funding notes. We used cash of $354.7 million in 2025, $327.0 million in 2024 and $269.0 million in 2023 for share repurchases.

As of December 28, 2025, we had $459.7 million remaining under the $1.0 billion share repurchase authorization approved by our Board of Directors on February 21, 2024 for repurchases of shares of our common stock.

Dividends

We declared dividends of $237.3 million (or $6.96 per share) in 2025, $210.7 million (or $6.04 per share) in 2024 and $170.4 million (or $4.84 per share) in 2023. We paid dividends of $236.9 million, $209.9 million and $169.8 million in 2025, 2024 and 2023, respectively.

Subsequent to the end of fiscal 2025, on February 18, 2026, our Board of Directors declared a quarterly dividend of $1.99 per common share payable on March 30, 2026 to shareholders of record at the close of business on March 13, 2026.

Sources and Uses of Cash

The following table illustrates the main components of our cash flows:

Operating Activities

Cash provided by operating activities increased $167.2 million in 2025 primarily as a result of the positive impact of changes in operating assets and liabilities of $98.2 million, primarily related to the timing of vendor payments in 2025 as compared to 2024. Additionally, net income increased $17.5 million and non-cash adjustments increased $33.8 million (primarily representing the changes in the total net realized and unrealized losses and gains associated with the remeasurement of the Company's investment in DPC Dash and changes in deferred income taxes), resulting in an overall increase to cash provided by operating activities in 2025 as compared to 2024 of $51.3 million. The positive change in advertising fund assets and liabilities, restricted of $17.7 million in 2025 as compared to 2024 also contributed to the increase in cash provided by operating activities and was driven by receipts for advertising contributions outpacing payments for advertising activities.

Investing Activities

Cash used in investing activities was $70.2 million in 2025, which consisted primarily of capital expenditures of $120.6 million (driven primarily by investments in consumer and store technology, supply chain centers, corporate store operations and other corporate capital expenditures). These investing cash outflows were partially offset by the net proceeds from the sale of 4,200,000 ordinary shares of our investment in DPC Dash for $44.1 million and the net proceeds of $8.6 million for the refranchising of 37 U.S. Company-owned stores primarily in the Maryland market.

Cash used in investing activities was $31.2 million in 2024, which consisted primarily of capital expenditures of $112.9 million (driven primarily by investments in consumer and store technology, supply chain centers and corporate store operations). These investing cash outflows were partially offset by the net proceeds from the sale of 10,000,000 ordinary shares of our investment in DPC Dash for $82.9 million.

Financing Activities

Cash used in financing activities was $752.1 million in 2025. In connection with the 2025 Refinancing, we issued $1.00 billion of new notes including $500.0 million 2025 Five-Year Notes and $500.0 million 2025 Seven-Year Notes. We used the proceeds from the issuance of the 2025 Notes, as well as $160.0 million of our unrestricted cash and cash equivalents, to repay the remaining $742.0 million in outstanding principal under our 2015 Ten-Year Notes and the remaining $402.7 million in outstanding principal under our 2018 7.5-Year Notes and to pay $15.4 million in debt issuance costs. We repurchased and retired $354.7 million in shares of our common stock under our Board of Directors-approved share repurchase program, as well as made $3.0 million in excise tax payments related to our share repurchase programs. We also made dividend payments to our shareholders of $236.9 million, had tax payments for the vesting of restricted stock of $11.4 million and made repayments of principal amounts related to our finance leases and other financing obligations of $4.8 million. These uses of cash were partially offset by proceeds from the exercise of stock options of $18.8 million.

Cash used in financing activities was $532.2 million in 2024. We repurchased and retired $327.0 million in shares of our common stock under our Board of Directors-approved share repurchase program, as well as made $2.6 million in excise tax payments related to our share repurchase programs. We also made dividend payments to our shareholders of $209.9 million. We also made repayments of long-term debt and principal amounts related to our finance leases and other financing obligations of $17.6 million and had tax payments for the vesting of restricted stock of $11.1 million. These uses of cash were partially offset by proceeds from the exercise of stock options of $36.0 million.

Impact of Inflation

Given the inflation rates in recent years, there have been and may continue to be increases in food, labor, insurance and occupancy costs which have and could further impact our profitability and that of our franchisees and which could impact the opening of new U.S. and international franchised stores and adversely affect our operating results. Factors such as inflation, increased food costs, increased labor and employee health and benefit costs, increased rent costs, increased insurance costs and increased energy costs may adversely affect our operating costs and profitability and those of our franchisees and could result in menu price increases. The impact of inflation is described with respect to our food basket pricing to stores and our labor and insurance cost, in the discussion of supply chain revenues and U.S. Company-owned store and supply chain gross margins, above. Severe increases in inflation could affect the global and U.S. economies and could have an adverse impact on our business, financial condition and results of operations. Further discussion on the impact of commodities and other cost pressures is included above, as well as in Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This Form 10-K includes various forward-looking statements about the Company within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act") that are based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. The following cautionary statements are being made pursuant to the provisions of the Act and with the intention of obtaining the benefits of the "safe harbor" provisions of the Act.

These forward-looking statements generally can be identified by the use of words such as "anticipate," "believe," "could," "should," "estimate," "expect," "intend," "may," "will," "plan," "predict," "project," "seek," "approximately," "potential," "outlook" and similar terms and phrases that concern our strategy, plans or intentions, including references to assumptions. These forward-looking statements address various matters including information concerning future results of operations and business strategy, the expected demand for future pizza delivery and carryout, our expectation that we will meet the terms of our agreement with our third-party supplier of pizza cheese, our belief that alternative third-party suppliers are available for our key ingredients in the event we are required to replace any of our supply partners, our intention to continue to enhance and grow online ordering, digital marketing and technological capabilities, our expectation that there will be no material environmental compliance-related capital expenditures, our plans to expand U.S. and international operations in many of the markets where we currently operate and in selected new markets, our expectation that the obligation for advertising fees payable to DNAF will remain in place for the foreseeable future, and the availability of our borrowings under the 2025 Variable Funding Notes for, among other things, funding working capital requirements, paying capital expenditures and funding other general corporate purposes, including payment of dividends.

Forward-looking statements relating to our anticipated profitability, estimates in same store sales growth, store growth and the growth of our U.S. and international business in general, ability to service our indebtedness, our future cash flows, our operating performance, trends in our business and other descriptions of future events reflect management's expectations based upon currently available information and data. While we believe these expectations and projections are based on reasonable assumptions, such forward-looking statements are inherently subject to risks, uncertainties and assumptions about us, including the risk factors listed under Item 1A. Risk Factors, as well as other cautionary language in this Form 10-K.

Actual results may differ materially from those expressed or implied in the forward-looking statements as a result of various factors, including but not limited to, the following:

In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this Form 10-K might not occur. All forward-looking statements speak only as of the date of this Form 10-K and should be evaluated with an understanding of their inherent uncertainty. Except as required under federal securities laws and the rules and regulations of the Securities and Exchange Commission, we will not undertake, and specifically disclaim any obligation to publicly update or revise any forward-looking statements to reflect events or circumstances arising after the date of this Form 10-K, whether as a result of new information, future events or otherwise.

Readers are cautioned not to place undue reliance on the forward-looking statements included in this Form 10-K or that may be made elsewhere from time to time by, or on behalf of, us. All forward-looking statements attributable to us are expressly qualified by these cautionary statements.