Executive Summary / Key Takeaways

• Restaurant Brands International (RBI) delivered a strong third quarter in 2025, with consolidated system-wide sales growing 6.9% and comparable sales accelerating to 4.0%, driving an 8.8% increase in organic Adjusted Operating Income (AOI).
• The company remains confident in achieving at least 8% organic AOI growth for the full year 2025, underpinned by disciplined cost management, strategic refranchising efforts, and a focus on high-return investments.
• Tim Hortons Canada and RBI's International business continue to be robust growth engines, collectively generating approximately 70% of the company's earnings and consistently outperforming industry peers.
• Burger King U.S. is demonstrating a sustained turnaround, with comparable sales growing 3.2% in Q3 2025 and outperforming the broader burger QSR category, driven by the "Reclaim the Flame" plan's focus on operational improvements, marketing, and remodels.
• While Popeyes U.S. faced softer comparable sales in Q3 2025, management is actively implementing the "Easy to Love" strategy, emphasizing core offerings, operational consistency, and significant investments in restaurant modernization and technology.

A Global QSR Powerhouse Refocuses for Sustainable Growth

Restaurant Brands International Inc. (RBI), a Canadian corporation founded in 1954, stands as a global quick-service restaurant (QSR) behemoth, franchising and operating four iconic brands: Tim Hortons, Burger King, Popeyes, and Firehouse Subs. With 32,423 restaurants spanning over 120 countries and territories as of September 30, 2025, RBI's business model is predominantly franchised, with over 90% of its system-wide restaurants operated by partners. This extensive global footprint and diversified brand portfolio are foundational to its competitive positioning in the dynamic QSR industry.

RBI's overarching strategy centers on operational excellence, enhancing the guest experience, driving franchisee profitability, and simplifying its business model. This strategic evolution is a direct response to market dynamics and has been shaped by significant historical milestones, including the 2017 acquisition of Popeyes, which rapidly expanded its international presence, and the 2024 acquisition of Carrols Restaurant Group, Inc., its largest U.S. Burger King franchisee. The latter was a strategic move to accelerate restaurant reimaging before refranchising the majority of the portfolio, aligning with RBI's long-term vision of a capital-light, primarily franchised operation.

Technological Edge: Driving Efficiency and Enhancing Guest Experience

Technology is a critical differentiator woven into RBI's operational fabric, enhancing efficiency, improving guest satisfaction, and strengthening its competitive moat. Across its brands, RBI is investing in and deploying advanced solutions:

• Tim Hortons: The brand is aggressively expanding its digital capabilities with kiosk installations on track to reach approximately 800 restaurants by year-end 2025. These kiosks are yielding tangible benefits, driving higher average checks and strong adoption among younger guests. Furthermore, Tim Hortons is rolling out new espresso machines to enhance beverage consistency and quality, a crucial step as espresso-based beverages continue to grow in popularity. The brand also recently announced a new loyalty partnership with Canadian Tire (CTC), a major Canadian retailer, launching in late 2026. This initiative aims to expand its loyalty base, which already boasts over 7 million active members who spend about 50% more on average than non-members, deepening guest engagement and driving repeat business.
• Burger King U.S.: As part of the "Reclaim the Flame" plan, significant "Royal Reset" investments are being made in restaurant technology, kitchen equipment, and building enhancements. These investments are designed to modernize the restaurant experience and improve operational efficiency.
• Popeyes: The "Easy to Run" initiative is a comprehensive technological overhaul, standardizing processes, enhancing technology, and introducing new kitchen equipment and a new production line. By the end of 2026, Popeyes aims for all U.S. locations to feature cloud-based point-of-sale systems, digital drop charts, sticky label printers, order ready boards, kiosks, auto batter makers, and improved hot holding units. These upgrades are expected to improve team member experience, reduce wait times, and enhance order accuracy, directly contributing to a more consistent guest experience.
• Firehouse Subs: The brand already boasts a digital mix of over 45%, the highest among RBI's home market brands, indicating strong digital adoption and efficiency in its ordering channels.

RBI's Executive Chairman, Patrick Doyle, has also highlighted the company's focus on artificial intelligence (AI) within its restaurants, aiming to improve customer experience and enhance the efficiency and effectiveness of operations. This proactive embrace of technology across its portfolio is not merely about modernization; it's about creating a more efficient, consistent, and appealing QSR experience, which directly translates into stronger competitive positioning, improved franchisee profitability, and a more robust financial performance for RBI.

Competitive Landscape: Outperforming in a Dynamic Market

RBI operates in a highly competitive QSR market, facing off against global giants like McDonald's (MCD), Yum! Brands (YUM), Starbucks (SBUX), and Domino's Pizza (DPZ). RBI's multi-brand strategy allows it to compete across various segments, leveraging regional strengths and distinct value propositions.

In the burger segment, Burger King directly challenges McDonald's. While McDonald's benefits from immense scale and a historically dominant global footprint, Burger King U.S. has consistently outperformed the broader burger QSR category in recent quarters, a testament to its "Reclaim the Flame" plan. This outperformance is driven by a disciplined value strategy that resonates with guests, contrasting with peers who may lean into short-term deals. Burger King's operational improvements have also led to its revisit intent ranking among the top 3 out of 12 QSR brands, indicating a strengthening competitive position.

Tim Hortons in Canada consistently outperforms the broader Canadian QSR industry by roughly 3 points, showcasing its market leadership in coffee and baked goods. This is achieved through strong brand love, operational excellence, and a compelling everyday value proposition. In the chicken segment, Popeyes, despite recent softer U.S. comparable sales, holds a strong competitive advantage with what management asserts is the "best chicken in QSR," rooted in authentic Louisiana heritage. Internationally, Popeyes stands out as the only brand among the top 10 Western QSR brands outside the U.S. that has been growing system-wide sales by over 35%. This strong international traction, particularly in EMEA, demonstrates its ability to capture market share globally.

Firehouse Subs continues to outperform the broader sub sandwich category, leveraging its digital strength and accelerating development. While some competitors, like McDonald's, have seen their U.S. same-store sales shrink, RBI's brands have shown resilience and relative outperformance, with management noting that competitors are "scrambling, and sometimes, frankly, copying some of the things that we do." This competitive dynamic underscores RBI's strategic effectiveness in a challenging environment.

Financial Performance and Operational Momentum

RBI's financial performance in the third quarter of 2025 reflects a business gaining momentum despite a dynamic macroeconomic environment. Consolidated total revenues for the three months ended September 30, 2025, increased to $2,449 million from $2,291 million in the prior year. For the nine months ended September 30, 2025, total revenues reached $6,968 million, up from $6,110 million in the same period of 2024.

The company's profitability also saw significant gains, with Adjusted Operating Income (AOI) for the third quarter of 2025 rising to $702 million from $652 million in the prior year. This 8.8% organic AOI growth outpaced system-wide sales growth, driven by disciplined cost management, including an $8 million reduction in segment General & Administrative (G&A) expenses and an $8 million tailwind from lapping the prior year's "Fuel the Flame" ad fund contribution at Burger King U.S. Net income attributable to common shareholders for Q3 2025 was $315 million, or $0.96 per diluted share, compared to $252 million, or $0.79 per diluted share, in Q3 2024.

Segment-Specific Performance:

• Tim Hortons (TH): This segment continues its impressive run, with Q3 2025 revenues of $1,125 million and AOI of $304 million. Comparable sales grew 4.2% in Q3 2025, extending its streak to 18 consecutive quarters of positive same-store sales. Breakfast foods saw 6.5% growth, and cold beverages surged 10%.
• Burger King (BK): The U.S. and Canada segment reported Q3 2025 revenues of $387 million and AOI of $123 million. Comparable sales increased 3.1% in Q3 2025, demonstrating sustained outperformance against the burger QSR category.
• Popeyes Louisiana Kitchen (PLK): Q3 2025 revenues were $201 million, with AOI of $63 million. However, U.S. comparable sales declined 2.4% in Q3 2025, indicating areas for improvement.
• Firehouse Subs (FHS): This segment posted Q3 2025 revenues of $60 million and AOI of $14 million. System-wide sales growth was a robust 10.7%, driven by 7.7% net restaurant growth.
• International (INTL): A significant growth engine, the International segment generated $268 million in revenues and $189 million in AOI in Q3 2025. System-wide sales grew 12.1%, with comparable sales up 6.5%. Burger King China, now classified as discontinued operations, saw comparable sales growth of 10.5% in Q3 2025.
• Restaurant Holdings (RH): This segment, comprising acquired company-owned restaurants, reported Q3 2025 revenues of $459 million and AOI of $10 million. Carrols' comparable sales of 4.8% outpaced the system average.

Liquidity and Capital Allocation:
As of September 30, 2025, RBI maintained strong liquidity with approximately $2.5 billion, including $1.2 billion in cash and cash equivalents and $1.248 billion in borrowing availability under its Revolving Credit Facility. The company's net leverage ratio stood at 4.4x. Capital allocation priorities remain focused on high-ROI investments, maintaining an attractive dividend (Q3 2025 dividend of $0.62 per common share), and deleveraging. A new share repurchase program authorizing up to $1 billion of common shares was approved in August 2025.

Strategic Initiatives and Outlook

RBI's forward-looking strategy is anchored in simplifying its business model and driving sustainable growth through operational excellence and strategic investments. The company reiterated its guidance for at least 8% organic AOI growth in 2025.

Key strategic initiatives and guidance include:

• Net Restaurant Growth (NRG): While 2025 NRG is expected to be "slightly down" from 2024, in the plus or minus 3% range, primarily due to the cleanup of Burger King China, RBI projects a ramp-up to 5% global NRG growth (approximately 1,800 net new restaurants annually) towards the end of its 2024-2028 algorithm period. This growth is expected from North American brands (targeting ~400 net units/year) and international markets (~1,400 net units/year), with China being a "primary swing factor" for future acceleration.
• Capital Expenditures: Total CapEx, tenant inducements, and remodel incentives are projected to be around $400 million for 2025, a slight reduction from earlier guidance, reflecting a stepped-up pace of Burger King U.S. remodels (approximately 400 in 2025) and increased development at Tim Hortons Canada. This elevated CapEx is expected to gradually decrease after 2026, settling around $300 million annually after 2028, generating a "nice tailwind to free cash flow growth."
• Burger King "Reclaim the Flame": The plan continues with "Royal Reset" investments, with $160 million funded out of a planned $550 million as of September 30, 2025. Remodeled restaurants are delivering strong sales uplifts in the mid-teens, with average restaurant sales post-remodel around $2 million.
• Refranchising: Efforts to refranchise Carrols restaurants are underway, with 50-100 locations expected in 2025, about half through the "Crown Your Career" program, which supports internal talent in their journey to restaurant ownership.
• Popeyes "Easy to Love": Approximately 85% of Popeyes restaurants have committed to amending franchise agreements, including testing higher national advertising rates (from 4.5% to 5% in year one, up to 5.5% by year three, subject to profitability) and a remodel schedule for a modern image by 2030.
• Financial Guidance: Adjusted net interest expense is expected to be around $520 million for 2025. The adjusted effective tax rate is projected to be in the 18% to 19% range for the full year 2025.

Risks and Challenges

Despite a compelling growth narrative, RBI faces several risks:

• Commodity Costs: Elevated beef costs, up high teens year-to-date in 2025, are creating short-term margin pressures for Burger King U.S. franchisees, as beef represents roughly one-quarter of the commodity basket. While considered temporary and cyclical, this impacts franchisee profitability.
• Macroeconomic Headwinds: The U.S. macro environment has shown signs of choppiness in October 2025, and Canadian consumer confidence remains challenged, potentially impacting consumer spending.
• Litigation: RBI is involved in class-action lawsuits concerning Burger King's no-solicitation clause and allegations of fiduciary duty breach related to the Carrols acquisition, with outcomes currently unpredictable.
• Tax Legislation: New Canadian tax legislation (EIFEL), effective October 2023, is expected to restrict interest and financing tax deductions, increasing cash taxes for RBI.
• Foreign Exchange Fluctuations: Significant changes in USD/CAD and USD/Euro exchange rates can materially impact AOI.
• Popeyes U.S. Performance: Softer comparable sales for Popeyes U.S. in Q3 2025 highlight the need for a successful refocus on core offerings and consistent value to regain momentum.

Conclusion

Restaurant Brands International is a diversified QSR leader actively transforming its business for sustained, profitable growth. The company's strategic simplification, operational excellence, and targeted technological investments are creating a resilient foundation. Despite facing macroeconomic headwinds and commodity cost pressures, RBI's strong Q3 2025 performance, particularly from Tim Hortons and its International segment, underscores the effectiveness of its strategy. The ongoing turnaround at Burger King U.S. and the ambitious modernization plans for Popeyes, coupled with a clear roadmap for capital allocation and deleveraging, reinforce the investment thesis. RBI's commitment to enhancing franchisee profitability and leveraging its global scale, supported by its technological advancements, positions it well to deliver on its guidance of at least 8% organic AOI growth in 2025 and beyond, making it a compelling consideration for discerning investors.