1. What the Company Does
Domino’s Pizza, Inc. operates a global pizza business built primarily around franchising, supply chain operations, and digital ordering. At the end of FY2025, Domino’s had 22,142 stores worldwide, including 7,186 U.S. stores and 14,956 international franchised stores across more than 90 markets.
The company reports three main business segments: U.S. Stores, International Franchise, and Supply Chain. The supply chain business was the largest contributor to reported revenue, generating approximately $2.99 billion, or 60.5% of total FY2025 revenue.
Domino’s relies heavily on independent franchisees. Approximately 96% of U.S. stores were franchised, and international operations were also almost entirely franchise-based. U.S. franchisees generally pay a 5.5% royalty on sales, while Domino’s also earns technology-related fees and revenue from supplying food and other products to stores.
Technology is an important part of the operating model. More than 85% of U.S. retail sales came through digital channels in FY2025, supported by Domino’s website, mobile applications, loyalty program, PULSE point-of-sale system, and other store technology.
Domino’s also maintained a leading U.S. pizza-market position, with approximately 23.3% of the U.S. quick-service pizza market, including 32.9% of pizza delivery and 19.6% of pizza carryout.
2. Financial Highlights
- Revenue: $4.94 billion in FY2025, up from $4.71 billion in FY2024.
- Operating income: $954.0 million, up from $879.0 million.
- Net income: $601.7 million, compared with $584.2 million in FY2024.
- Diluted EPS: $17.6, compared with $16.7 in FY2024 and $14.7 in FY2023.
- Operating cash flow: $792.1 million, up from $624.9 million in FY2024.
- Operating margin: 19.3%, compared with 18.7% in FY2024 and 18.3% in FY2023.
Domino’s reported higher revenue, operating income, net income, EPS, and operating cash flow over the three-year period. Gross margin also increased from 38.6% in FY2023 to 40.0% in FY2025.
The balance sheet remains unusual. Domino’s ended FY2025 with approximately $4.8 billion of total debt and negative shareholders’ equity of about $3.9 billion. Negative equity makes ratios such as ROE and Debt-to-Equity less useful than they would be for a company with positive book equity.
Debt-based measures improved over the period. Net Debt / EBITDA declined from 5.4x in FY2023 to 4.5x in FY2025, while interest coverage improved from 4.2x to 4.9x.
3. Key Risks
- Franchisee dependence: Most Domino’s restaurants are independently owned, so poor franchisee performance or failure to follow operating standards can affect royalties, store growth, and the brand.
- International franchise concentration: Large master franchisees operate significant numbers of stores, so problems at a major partner can affect many locations at once.
- Supply chain dependence: Domino’s manufactures dough and distributes food to thousands of stores, making disruptions at supply chain facilities an important operating risk.
- Supplier concentration: Substantially all U.S. pizza cheese and the majority of U.S. meat toppings come from single major suppliers.
- Restaurant cost pressure: Higher food, labor, insurance, occupancy, and energy costs can reduce profitability for Company-owned stores and franchisees.
- Technology and cybersecurity: Digital ordering, payment processing, store systems, and third-party technology providers are critical to operations and may be affected by outages or cyber incidents.
- Brand and food safety: Food-safety incidents, product-quality problems, or franchisee misconduct can damage customer trust across the broader Domino’s system.
- Debt: Domino’s carries approximately $4.8 billion of debt and must continue generating sufficient cash to meet financing obligations.
4. MD&A
Management emphasized same store sales growth and net store growth as two of the most important operating measures for the business.
- U.S. same store sales increased 3.0% in FY2025.
- International same store sales increased 1.9%, excluding foreign currency effects.
- Global retail sales increased 5.4%, excluding foreign currency effects.
- Domino’s added 776 net stores during the year.
U.S. franchise royalties and fees increased to $677.1 million, supported by higher franchise retail sales and more franchised stores. International franchise royalties and fees increased to $338.7 million, while supply chain revenue increased 5.1% to $2.99 billion.
Management reported that supply chain revenue benefited from higher order volumes and a 3.5% increase in food basket pricing. Operating income increased to $954.0 million, while operating cash flow reached $792.1 million.
Domino’s also completed significant debt refinancing during FY2025, issuing $1.0 billion of new senior secured notes and making approximately $1.15 billion of debt and finance lease repayments. The company continued to return capital to shareholders, paying approximately $236.9 million in dividends and spending approximately $357.7 million on share repurchases.
5. Takeaway
Domino’s FY2025 10-K shows a business centered on a large global franchise network, recurring royalty income, an integrated supply chain, and a highly digital ordering system. Revenue, operating income, net income, EPS, and operating cash flow all increased in FY2025, while global store count continued to expand.
At the same time, the company operates with high financial leverage and negative book equity, making debt service, cash generation, and franchise-system performance important areas to follow. The filing also highlights dependence on franchisees, major suppliers, supply chain operations, technology systems, food safety, and brand reputation.
For beginners, the core point is simple: Domino’s is not just a pizza-store operator. Its economics are driven by the performance of a global franchise system, the supply chain that supports it, and the company’s ability to grow store sales while managing a leveraged capital structure.
6. Income Statement Summary
| (unit: $m, EPS in $) | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Revenue | 4,479.4 | 4,706.4 | 4,940.0 |
| Cost of Goods Sold | 2,751.9 | 2,857.9 | 2,966.4 |
| Gross Profit | 1,727.4 | 1,848.5 | 1,973.6 |
| SG&A | 907.7 | 969.3 | 1,023.6 |
| Operating Income | 819.5 | 879.0 | 954.0 |
| Non-Operating Income/Expense | 17.7 | 22.1 | (2.5) |
| Interest Income/Expense | (184.8) | (178.8) | (181.1) |
| Income Before Tax | 652.4 | 722.2 | 770.3 |
| Income Tax | 133.3 | 138.0 | 168.6 |
| Net Income | 519.1 | 584.2 | 601.7 |
| EPS | 14.7 | 16.7 | 17.6 |
7. Key Financial Ratios
Unit: %, except Net Debt / EBITDA and Interest Coverage Ratio, which are shown in times (x).
| Ratio | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| ROE (%) | (12.8%) | (14.7%) | (15.4%) |
| ROA (%) | 31.0% | 33.6% | 35.1% |
| ROTC (%) | 89.1% | 86.8% | 104.2% |
| ROIC (%) | 80.9% | 86.0% | 94.3% |
| Gross Margin (%) | 38.6% | 39.3% | 40.0% |
| Operating Margin (%) | 18.3% | 18.7% | 19.3% |
| Pretax Margin (%) | 14.6% | 15.3% | 15.6% |
| Net Margin (%) | 11.6% | 12.4% | 12.2% |
| Debt-to-Equity Ratio (D/E) (%) | (122.6%) | (125.6%) | (123.5%) |
| Net Debt / EBITDA (x) | 5.4x | 5.0x | 4.5x |
| Interest Coverage Ratio (x) | 4.2x | 4.5x | 4.9x |
| Current Ratio (%) | 149.3% | 56.1% | 165.1% |
| Quick Ratio (%) | 72.5% | 30.7% | 81.5% |
| Fixed Asset to Long-term Capital Ratio (%) | 33.1% | 29.7% | 35.4% |
This article is for educational purposes only.
Domino’s Pizza, Inc. (DPZ) FY 2025 10-K Analysis (Filed 2026) | Explained for Beginners
Originally published on Finvincio