Financial Trends -- 6/10
An improving fast-casual operator. Revenue growth stable in a mid-teens band (+14.3% Q1'26 ex the
FY25 53rd-week distortion), carried by unit growth more than comps. Margins are the strongest part
of the profile: Adj EBITDA margin +690 bps over five years to 14.5%; Shack-level margin 22.6%.
Share count declining; annual FCF positive and growing (+58%). The cap: the Q1'26 quarterly FCF
print was −$38.7M and Q1'26 Adj EBITDA fell −9.3% YoY — the negative-FCF modifier
(−2, hard cap at 6) applies.
Weight: 25%
Margins
Expanding
Adj EBITDA margin 14.5% FY25 | +690 bps/5yr
FCF
Mixed
Annual growing (+58%); Q1'26 −$38.7M
Share Count
Declining
44.2M → 41.8M | No dilution
Quarterly Revenue Trajectory ($K)
Stable, slightly choppy — not cleanly accelerating.
Stripping the FY25 53rd-week distortion (which inflated the +21.9% Q4'25 print), growth held in a
mid-teens band. Same-Shack sales are the soft spot (+0.2% trough Q1'25 → +4.6% Q1'26); unit
growth (company Shacks 329 → 373, +13% in FY25) carries the top line. A unit-growth story,
not a comp-led one.
* FY2025 Q4 carried a 53rd operating week, inflating the +21.9% YoY; underlying growth is closer to mid-teens.
Adj EBITDA -- The Near-Term Air Pocket ($K)
Q1'26 Adj EBITDA fell −9.3% YoY — the first YoY decline in the dataset.
Shack-level margin still expanded +50 bps to 21.2% despite beef inflation, but the corporate
profit line went backwards on heavy growth investment (marketing at scale + Project Catalyst
tech build). Management called out that Q1 "did not meet our short-term quarterly expectations."
Real, but back-half/2027-loaded rather than structural.
Annual Financial Summary (FY ends late December)
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Total Revenue ($K) | $739,893K | $900,486K | $1,087,533K | $1,252,608K | $1,445,306K |
| Rev YoY | — | +21.7% | +20.8% | +15.2% | +15.4% |
| Adj EBITDA ($K) | $56,026K | $70,496K | $131,816K | $175,579K | $209,896K |
| Adj EBITDA Margin | 7.6% | 7.8% | 12.1% | 14.0% | 14.5% |
| Shack-level Margin | 16.7% | 17.4% | 19.9% | 21.4% | 22.6% |
| Net Income to SHAK ($K) | ($8,655K) | ($21,136K) | $20,264K | $10,207K | $45,725K |
| Diluted Wtd Shares ($K) | 39,085 | 39,237 | 43,899 | 44,203 | 41,847 |
| Domestic Company Shacks (#) | 218 | 254 | 295 | 329 | 373 |
Key trends
- Revenue compounding ~18%: From $739.9M (FY21) to $1,445.3M (FY25), a ~18% CAGR driven by unit growth; Q1'26 +14.3% YoY
- Margin expansion is the strongest leg: Adj EBITDA margin +690 bps over five years (7.6% to 14.5%); Shack-level margin +590 bps (16.7% to 22.6%)
- GAAP profitability inflected: Operating income turned to $62.5M FY25 from $3.0M FY24; net income to SHAK $45.7M
- Share count declining: Diluted shares 44.2M (FY24) to 41.8M (FY25), -5.3%, no dilution
- Unit-growth story: Domestic company Shacks 218 to 373 over five years, on a runway toward ~1,500
Revenue Lines ($K, Annual)
| Revenue Line | FY2024 | FY2025 | YoY | % of Rev |
|---|---|---|---|---|
| Shack Sales (company-operated) | $1,207,600K | $1,391,200K | +15.2% | 96.3% |
| Licensing (royalties/fees) | $45,000K | $54,100K | +20.2% | 3.7% |
| Total Revenue | $1,252,608K | $1,445,306K | +15.4% | 100% |
Free Cash Flow ($K)
| Metric | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|
| Operating CF | $76,741K | $132,139K | $171,155K | $222,355K |
| Capex | ($142,559K) | ($146,167K) | ($135,499K) | ($165,849K) |
| Free Cash Flow (calc) | ($65,818K) | ($14,028K) | $35,656K | $56,506K |
| FCF YoY | — | Improving | Inflected + | +58% |
Annual FCF inflected positive and is growing — the gate's YES basis.
FCF moved from deeply negative ($65.8M FY22) to positive and growing ($35.7M FY24 → $56.5M
FY25, +58%). But the most recent quarterly print reversed: Q1'26 FCF was −$38.7M as operating
cash flow collapsed to $8.5M on a working-capital swing against $47.2M of growth capex. Forward FCF
depends on capex intensity moderating as the build-out matures.
Blemishes -- The 6/10 Cap
| Blemish | Detail | Penalty |
|---|---|---|
| Negative Q1'26 FCF | Most recent reported quarter FCF −$38.7M; OCF collapsed to $8.5M on a working-capital swing against $47.2M capex. Triggers the negative-FCF modifier (hard cap at 6). | -2 (cap 6) |
| First YoY EBITDA Decline | Q1'26 Adj EBITDA −9.3% YoY, the first YoY decline in the 13-quarter dataset, on heavy growth investment (marketing + Project Catalyst). | Contributes to cap |
| Comp-light growth | Top line is unit-driven; same-Shack sales in a low band (+0.2% trough Q1'25). Not a penalty, but a quality qualifier. | None |
Score Rationale
Score of 6/10 reflects an improving operator with a genuine margin story, held to 6 by the negative-FCF modifier on the most recent quarter.
Supports the base read (~7):
- Revenue stable in a mid-teens band (+14.3% Q1'26), ~18% five-year CAGR on unit growth
- Adj EBITDA margin expanding +690 bps over five years to 14.5%; Shack-level margin +590 bps to 22.6%
- GAAP operating income inflected to $62.5M FY25 from $3.0M FY24
- Share count declining (44.2M to 41.8M), no dilution
- Annual FCF positive and growing ($35.7M FY24 to $56.5M FY25, +58%)
The cap (negative-FCF modifier, -2, hard cap at 6):
- Q1'26 FCF -$38.7M (working-capital/capex timing)
- Q1'26 Adj EBITDA -9.3% YoY, first YoY decline in the dataset
- No additional stacked penalties (no dilution, no operating-income penalty, no debt penalty)
Quality-gate answer (positiveGrowingFcf): YES — on an annual and TTM basis SHAK generates positive and growing FCF. The Q1'26 quarterly negative print is a timing event, but it is the reason the dimension is capped at 6.
Data sourced from Daloopa (company_id 171). Fiscal year ends late December (52/53-week). All financials in USD.