McDonald’s (NYSE: MCD) grows 2025 sales, boosts dividend and cash returns

Q: How did McDonald’s (MCD) perform financially in the fourth quarter of 2025?

McDonald’s delivered strong Q4 2025 results with global comparable sales up 5.7% and revenues rising 10% to $7,009 million . Operating income increased 10% to $3,156 million and diluted EPS grew 8% to $3.03 , reflecting broad-based segment strength.

Q: What were McDonald’s (MCD) full year 2025 revenue and earnings?

For 2025, McDonald’s generated revenues of $26,885 million , up 4% year over year. Net income was $8,563 million , a 4% increase, and diluted earnings per share rose 5% to $11.95 . Systemwide sales increased 7% to approximately $129.7 billion.

Q: How fast are McDonald’s (MCD) loyalty and Systemwide sales growing?

In 2025, global Systemwide sales increased 7% to about $129.7 billion . Across 70 loyalty markets, Systemwide sales to loyalty members grew 20% to nearly $37 billion , with 90‑day active loyalty users up 19% to nearly 210 million as of year‑end.

Q: What margins and operating income did McDonald’s (MCD) report for 2025?

McDonald’s reported 2025 operating income of $12,393 million , up 6% from 2024. The operating margin was 46.1% . Excluding restructuring and related items, non‑GAAP operating income was $12,621 million, and higher sales-driven franchised margins were the primary driver of growth.

Q: How much cash flow and shareholder returns did McDonald’s (MCD) generate in 2025?

In 2025, McDonald’s produced $10,551 million of cash from operations and $7,186 million of free cash flow . The company paid $5.1 billion in dividends , repurchased 6.7 million shares for $2.0 billion , and achieved a free cash flow conversion rate of 84%.

Q: What dividend changes and capital plans has McDonald’s (MCD) announced?

McDonald’s declared a 5% increase in its quarterly cash dividend to $1.86 per share , first payable on December 15, 2025. For 2026, it plans $3.7–$3.9 billion in capital expenditures , with approximately 2,600 restaurant openings and about 2,100 net additions globally.

Q: What 2026 outlook did McDonald’s (MCD) provide on margins and taxes?

For 2026, McDonald’s expects operating margin in the mid‑to‑high 40% range and net restaurant unit expansion to add about 2.5% to Systemwide sales growth in constant currencies. The company also projects an effective income tax rate between 21% and 23% for the year.

Filing Impact

(High)

Filing Sentiment

(Neutral)

Form Type

8-K

Rhea-AI Filing Summary

McDonald’s Corporation reported solid growth for the fourth quarter and full year 2025. Fourth quarter global comparable sales rose 5.7%, with the U.S. up 6.8% and broad-based gains across international markets. Quarterly revenues increased 10% to $7,009 million and operating income grew 10% to $3,156 million.

Diluted earnings per share for the quarter were $3.03, up 8%, or $3.12 on a non-GAAP basis excluding restructuring-related charges. For 2025, revenues increased 4% to $26,885 million, net income grew 4% to $8,563 million, and diluted EPS rose 5% to $11.95.

Systemwide sales for the full year increased 7% to about $129.7 billion, while sales to loyalty members grew 20% to nearly $37 billion. The company generated $10,551 million of cash from operations, produced $7,186 million of free cash flow, raised its quarterly dividend 5% to $1.86 per share, and repurchased 6.7 million shares for $2.0 billion.

Insights

McDonald’s delivered steady 2025 growth, margin strength and strong cash returns.

McDonald’s posted Q4 2025 revenue of $7,009 million, up 10%, with global comparable sales up 5.7%. Operating income grew 10% and diluted EPS rose 8% to $3.03, or $3.12 on a non-GAAP basis as restructuring charges are excluded.

For the full year, revenue increased 4% to $26,885 million and net income rose 4% to $8,563 million. Systemwide sales exceeded $129.7 billion, up 7%, with loyalty sales nearly $37 billion, highlighting the importance of digital and loyalty engagement to sales momentum.

Cash generation remained robust: cash from operations reached $10,551 million and free cash flow was $7,186 million. McDonald’s returned capital through $5.1 billion of dividends and $2.0 billion of share repurchases, while guiding 2026 operating margin to the mid‑to‑high 40% range and planning $3.7–$3.9 billion in capital expenditures, including about 2,600 new restaurant openings.

8-K Event Classification

2 items: 2.02, 9.01

2 items

Item 2.02 Results of Operations and Financial Condition Financial

Disclosure of earnings results, typically an earnings press release or preliminary financials.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, and exhibit attachments filed with this report.

Understanding 8-K Material Events →

02/11/2026 - 04:02 PM

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT TO

SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): February 11, 2026

McDONALD’S CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware

1-5231

36-2361282

(State or Other Jurisdiction
of Incorporation)

(Commission
File Number)

(IRS Employer
Identification No.)

110 North Carpenter Street

Chicago, Illinois

(Address of Principal Executive Offices)

60607

(Zip Code)

(630) 623-3000

(Registrant’s telephone number, including area code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	MCD	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).


Emerging growth company			☐


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			o

Item 2.02. Results of Operations and Financial Condition.

On February 11, 2026, McDonald’s Corporation issued an investor release reporting its results for the fourth quarter and year ended December 31, 2025. A copy of the investor release is being filed as Exhibit 99.1 to this Form 8-K and is incorporated by reference in its entirety. Also filed herewith and incorporated by reference as Exhibit 99.2 is supplemental information for the fourth quarter and year ended December 31, 2025. The information under this Item 2.02, including such Exhibits, shall be deemed to be “filed” for purposes of the Securities Exchange Act of 1934, as amended.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

99.1 Investor Release of McDonald's Corporation issued February 11, 2026: McDonald’s Reports Fourth Quarter and Full Year 2025 Results

99.2 McDonald's Corporation: Supplemental Information (Unaudited), Quarter and Year Ended December 31, 2025

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

McDONALD’S CORPORATION

(Registrant)

Date:

February 11, 2026

By:

/s/ Lauren B. Elting

Lauren B. Elting

Vice President – Chief Accounting Officer and Corporate Controller

Exhibit 99.1


FOR IMMEDIATE RELEASE			FOR MORE INFORMATION CONTACT:
2/11/2026			Investors: Dexter Congbalay, investor.relations@us.mcd.com
			Media: Lauren Altmin, lauren.altmin@us.mcd.com

McDONALD'S REPORTS FOURTH QUARTER AND FULL YEAR 2025 RESULTS

•Global comparable sales in the fourth quarter increased 5.7%, with positive global comparable guest counts and strong comparable sales growth across all segments

•Global Systemwide sales* for the full year increased 7% (5% in constant currencies) to over $139 billion, or growth of $9 billion ($7 billion in constant currencies)

•Across 70 loyalty markets, Systemwide sales to loyalty members for the full year increased 20% to nearly $37 billion, with 90-day active loyalty users up 19% to nearly 210 million as of year-end

CHICAGO, IL - McDonald's Corporation today announced results for the fourth quarter and year ended December 31, 2025.

“McDonald's value leadership is working,” said Chairman and CEO Chris Kempczinski. “By listening to customers and taking action, we have improved traffic and strengthened our value & affordability scores. That focus helped increase global systemwide sales by 8% and delivered strong comp sales growth across all segments this quarter. The momentum we’ve built reinforces the progress we've made with our strategy and has earned us the right to look forward together as a system.”

Fourth quarter financial performance:

•Global comparable sales increased 5.7%:

•U.S. increased 6.8%

•International Operated Markets increased 5.2%

•International Developmental Licensed Markets increased 4.5%

•Consolidated revenues increased 10% (6% in constant currencies).

•Systemwide sales increased 11% (8% in constant currencies).

•Consolidated operating income increased 10% (6% in constant currencies). Results included pre-tax charges of $80 million primarily related to restructuring charges associated with Accelerating the Organization. Excluding these current year charges, as well as prior year pre-tax net charges of $3 million, consolidated operating income increased 13% (9% in constant currencies).**

•Diluted earnings per share was $3.03, an increase of 8% (5% in constant currencies). Excluding the current year charges described above of $0.09 per share, diluted earnings per share was $3.12, an increase of 10% (7% in constant currencies) when also excluding prior year charges.**

•The Company declared a 5% increase in its quarterly cash dividend to $1.86 per share.

Full year financial performance:

•Global comparable sales increased 3.1%:

•U.S. increased 2.1%

•International Operated Markets increased 3.2%

•International Developmental Licensed Markets increased 4.6%

•Consolidated revenues increased 4% (2% in constant currencies).

•Systemwide sales increased 7% (5% in constant currencies).

•Consolidated operating income increased 6% (4% in constant currencies). Results included net pre-tax charges of $229 million primarily related to restructuring charges associated with Accelerating the Organization. Excluding these current year charges, as well as prior year net pre-tax charges of $291 million, consolidated operating income increased 5% (3% in constant currencies).**

•Diluted earnings per share was $11.95, an increase of 5% (4% in constant currencies). Excluding the current year charges described above of $0.25 per share, diluted earnings per share was $12.20, an increase of 4% (3% in constant currencies) when also excluding prior year charges.**

*Refer to page 5 for a definition of Systemwide sales.

**Refer to pages 3 and 4 for additional details on our results for the fourth quarter and full year 2025 and 2024.

COMPARABLE SALES


	Increase/(Decrease)
	Quarters Ended December 31,
	2025		2024
U.S.	6.8	%	(1.4)	%
International Operated Markets	5.2		0.1
International Developmental Licensed Markets	4.5		4.1
Total Company	5.7	%	0.4	%

•U.S.: Comparable sales were driven by positive check and guest count growth primarily from successful marketing promotions.

•International Operated Markets: Nearly all markets reflected positive comparable sales, led by the U.K., Germany and Australia.

•International Developmental Licensed Markets: Positive comparable sales were led by Japan, with all geographic regions reflecting positive comparable sales.

KEY FINANCIAL METRICS - CONSOLIDATED

Dollars in millions, except per share data



	Quarters Ended December 31,								Years Ended December 31,
	2025		2024		Inc/ (Dec)		Inc/ (Dec) Excluding Currency Translation		2025		2024		Inc/ (Dec)		Inc/ (Dec) Excluding Currency Translation
Revenues	$	7,009	$	6,388	10	%	6	%	$	26,885	$	25,920	4	%	2	%
Operating income	3,156		2,868		10		6		12,393		11,712		6		4
Net income	2,164		2,017		7		4		8,563		8,223		4		3
Earnings per share-diluted	$	3.03	$	2.80	8	%	5	%	$	11.95	$	11.39	5	%	4	%

Results for 2025 included the following:

•Net pre-tax charges of $80 million, or $0.09 per share, for the quarter and $229 million, or $0.25 per share, for the year, primarily related to restructuring charges associated with the Company's internal effort to modernize ways of working (Accelerating the Organization)

Results for 2024 included the following:

•Pre-tax charges of $74 million, or $0.10 per share, for the quarter and $221 million, or $0.25 per share, for the year, primarily related to restructuring charges associated with Accelerating the Organization

•Net pre-tax gains of $71 million, or $0.07 per share, for the quarter and net pre-tax charges of $70 million, or $0.08 per share, for the year, which primarily consisted of property sale gains, transaction costs and non-cash impairment charges associated with the sale of McDonald's business in South Korea and transaction costs associated with the acquisition of McDonald's business in Israel

Excluding the above items, operating income growth for both periods was primarily driven by higher sales-driven Franchised margins.

NET INCOME AND EARNINGS PER SHARE-DILUTED RECONCILIATION

Dollars in millions, except per share data


	Quarters Ended December 31,
	Net Income								Earnings per share - diluted
	2025		2024		Inc/ (Dec)		Inc/ (Dec) Excluding Currency Translation		2025		2024		Inc/ (Dec)		Inc/ (Dec) Excluding Currency Translation
GAAP	$	2,164	$	2,017	7	%	4	%	$	3.03	$	2.80	8	%	5	%
(Gains)/Charges, net of tax	64		18						0.09		0.03
Non-GAAP	$	2,228	$	2,035	9	%	6	%	$	3.12	$	2.83	10	%	7	%


	Years Ended December 31,
	Net Income								Earnings per share - diluted
	2025		2024		Inc/ (Dec)		Inc/ (Dec) Excluding Currency Translation		2025		2024		Inc/ (Dec)		Inc/ (Dec) Excluding Currency Translation
GAAP	$	8,563	$	8,223	4	%	3	%	$	11.95	$	11.39	5	%	4	%
(Gains)/Charges, net of tax	178		236						0.25		0.33
Non-GAAP	$	8,741	$	8,459	3	%	2	%	$	12.20	$	11.72	4	%	3	%

THE FOLLOWING DEFINITIONS APPLY TO THESE TERMS AS USED THROUGHOUT THIS RELEASE

Constant currency results exclude the effects of foreign currency translation and are calculated by translating current year results at prior year average exchange rates. Management reviews and analyzes business results excluding the effect of foreign currency translation, impairment and other charges and gains, as well as material regulatory and other income tax impacts, and bases incentive compensation plans on these results because the Company believes this better represents underlying business trends.

Comparable sales and comparable guest counts are compared to the same period in the prior year and represent sales and transactions, respectively, at all restaurants, whether owned and operated by the Company or by franchisees, in operation at least thirteen months including those temporarily closed. Some of the reasons restaurants may be temporarily closed include reimaging or remodeling, rebuilding, road construction, natural disasters, pandemics and acts of war, terrorism or other hostilities. Comparable sales exclude the impact of currency translation and the sales of any market considered hyperinflationary (generally identified as those markets whose cumulative inflation rate over a three-year period exceeds 100%), which management believes more accurately reflects the underlying business trends. Comparable sales are driven by changes in guest counts and average check, the latter of which is affected by changes in pricing and product mix.

Systemwide sales include sales at all restaurants, whether owned and operated by the Company or by franchisees. Systemwide sales to loyalty members are comprised of all sales to customers who self-identify as a loyalty member when transacting with both Company-owned and operated and franchised restaurants. Systemwide sales to loyalty members are measured across 70 markets with loyalty programs. Systemwide sales to loyalty members represents an aggregation of the prior four quarters of sales to loyalty members active in the last 90 days of the respective quarter. While franchised sales are not recorded as revenues by the Company, management believes the information is important in understanding the Company's financial performance because these sales are the basis on which the Company calculates and records franchised revenues and are indicative of the financial health of the franchisee base. The Company's revenues consist of sales by Company-owned and operated restaurants and fees from franchised restaurants operated by conventional franchisees, developmental licensees and affiliates. Changes in Systemwide sales are primarily driven by comparable sales and net restaurant unit expansion.

Free cash flow, defined as cash provided by operations less capital expenditures, and free cash flow conversion rate, defined as free cash flow divided by net income, are measures reviewed by management in order to evaluate the Company’s ability to convert net profits into cash resources, after reinvesting in the core business, that can be used to pursue opportunities to enhance shareholder value.

RELATED COMMUNICATIONS

This press release should be read in conjunction with Exhibit 99.2 to the Company's Form 8-K filing for supplemental information related to the Company's results for the quarter and year ended December 31, 2025.

McDonald’s Corporation will broadcast its investor earnings conference call live over the Internet at 3:30 p.m. (Central Time) on February 11, 2026. A link to the live webcast will be available at www.investor.mcdonalds.com. There will also be an archived webcast available for a limited time thereafter.

UPCOMING COMMUNICATIONS

For important news and information regarding McDonald's, including the timing of future investor conferences and earnings calls, visit the Investor Relations section of the Company's Internet home page at www.investor.mcdonalds.com. McDonald's uses this website as a primary channel for disclosing key information to its investors, some of which may contain material and previously non-public information.

ABOUT McDONALD’S

McDonald’s is the world’s leading global foodservice retailer with over 45,000 locations in over 100 countries. Approximately 95% of McDonald’s restaurants worldwide are owned and operated by independent local business owners.

FORWARD-LOOKING STATEMENTS

This release contains certain forward-looking statements, which reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. Factors that could cause actual results to differ materially from expectations are detailed in the Company’s filings with the Securities and Exchange Commission, including the risk factors discussed in Exhibit 99.2 to the Company’s Form 8-K filing on February 11, 2026. The Company undertakes no obligation to update such forward-looking statements, except as may otherwise be required by law.

McDONALD'S CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)


Dollars and shares in millions, except per share data
Quarters Ended December 31,	2025		2024		Inc/ (Dec)
Revenues
Revenues from franchised restaurants	$	4,311	$	3,958	$	352	9	%
Sales by Company-owned and operated restaurants	2,536		2,310		226		10
Other revenues	162		120		42		35

TOTAL REVENUES	7,009		6,388		621		10

Operating costs and expenses
Franchised restaurants-occupancy expenses	678		635		44		7
Company-owned and operated restaurant expenses	2,159		1,977		183		9
Other restaurant expenses	140		98		41		42
Selling, general & administrative expenses
Depreciation and amortization	123		136		(13)		(9)
Other	749		664		85		13
Other operating (income) expense, net	4		10		(7)		(64)
Total operating costs and expenses	3,853		3,519		334		9

OPERATING INCOME	3,156		2,868		287		10

Interest expense	410		380		30		8
Nonoperating (income) expense, net	(12)		(49)		38		(76)

Income before provision for income taxes	2,757		2,537		220		9
Provision for income taxes	594		521		73		14

NET INCOME	$	2,164	$	2,017	$	147	7	%

EARNINGS PER SHARE-DILUTED	$	3.03	$	2.80	$	0.23	8	%

Weighted average shares outstanding-diluted	714.2		719.7		(5.5)		(1)	%

McDONALD'S CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)


Dollars and shares in millions, except per share data
Years Ended December 31,	2025		2024		Inc/ (Dec)
Revenues
Revenues from franchised restaurants	$	16,548	$	15,715	$	834	5	%
Sales by Company-owned and operated restaurants	9,690		9,782		(92)		(1)
Other revenues	647		423		223		53

TOTAL REVENUES	26,885		25,920		965		4

Operating costs and expenses
Franchised restaurants-occupancy expenses	2,618		2,536		82		3
Company-owned and operated restaurant expenses	8,268		8,334		(66)		(1)
Other restaurant expenses	564		339		225		66
Selling, general & administrative expenses
Depreciation and amortization	457		447		10		2
Other	2,583		2,412		171		7
Other operating (income) expense, net	2		139		(137)		(98)
Total operating costs and expenses	14,492		14,208		285		2

OPERATING INCOME	12,393		11,712		680		6

Interest expense	1,582		1,506		76		5
Nonoperating (income) expense, net	(87)		(139)		52		(38)

Income before provision for income taxes	10,897		10,345		552		5
Provision for income taxes	2,334		2,121		213		10

NET INCOME	$	8,563	$	8,223	$	340	4	%

EARNINGS PER SHARE-DILUTED	$	11.95	$	11.39	$	0.56	5	%

Weighted average shares outstanding-diluted	716.4		721.9		(5.5)		(1)	%

McDONALD'S CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)


In millions	December 31,	2025		2024
Current assets		—		—
Cash and equivalents		$	774	$	1,085
Accounts and notes receivable		2,466		2,383
Other current assets		924		1,130

TOTAL CURRENT ASSETS		4,163		4,599

TOTAL OTHER ASSETS		12,505		11,950

LEASE RIGHT-OF-USE ASSET, NET		14,606		13,339

NET PROPERTY AND EQUIPMENT		28,241		25,295

TOTAL ASSETS		$	59,515	$	55,182

TOTAL CURRENT LIABILITIES		$	4,361	$	3,861

Long-term debt		39,973		38,424
Long-term lease liability		14,147		12,888



Other long-term liabilities		1,788		1,893
Deferred income taxes		1,038		1,914

TOTAL SHAREHOLDERS' EQUITY (DEFICIT)		(1,791)		(3,797)

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)		$	59,515	$	55,182

McDONALD'S CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)


In millions	Years ended December 31,	2025		2024
Operating activities
Net income		$	8,563	$	8,223





Changes in working capital items		106		(437)






Other		1,882		1,660

CASH PROVIDED BY OPERATIONS		10,551		9,447

Investing activities
Capital expenditures		(3,365)		(2,775)





Sales and purchases of restaurant and other businesses and property sales		122		(2,073)

Other		(579)		(498)

CASH USED FOR INVESTING ACTIVITIES		(3,822)		(5,346)

Financing activities



Net short-term borrowings and long-term financing issuances and payments		(73)		(72)
Treasury stock purchases		(2,056)		(2,824)
Common stock dividends		(5,115)		(4,870)



Proceeds from stock option exercises and other		118		271

CASH USED FOR FINANCING ACTIVITIES		(7,125)		(7,495)

EFFECT OF EXCHANGE RATES ON CASH AND EQUIVALENTS		86		(101)

CASH AND EQUIVALENTS INCREASE (DECREASE)		(311)		(3,494)


Cash and equivalents at beginning of year		1,085		4,579

CASH AND EQUIVALENTS AT END OF YEAR		$	774	$	1,085

Supplemental cash flow disclosures
Cash provided by operations		$	10,551	$	9,447
Less: Capital expenditures		(3,365)		(2,775)

FREE CASH FLOW		$	7,186	$	6,672

Exhibit 99.2

McDonald's Corporation

Supplemental Information (Unaudited)

Quarter and Year Ended December 31, 2025






Impact of Foreign Currency Translation			1

Net Income and Diluted Earnings per Share			2

Revenues			4

Comparable Sales			5

Systemwide Sales and Franchised Sales			6

Restaurant Margins			7

Selling, General & Administrative Expenses			8

Other Operating (Income) Expense, Net			8

Operating Income			9

Interest Expense			10

Nonoperating (Income) Expense, Net			10

Income Taxes			10

Cash Flows			10

Outlook			11

Restaurant Information			12

Cautionary Statement Regarding Forward-Looking Statements			14

Risk Factors			14

SUPPLEMENTAL INFORMATION

The purpose of this Exhibit 99.2 is to provide additional information related to the results of McDonald's Corporation (the “Company”) for the quarter and year ended December 31, 2025. This information should be read in conjunction with Exhibit 99.1.

Management reviews and analyzes business results excluding the effect of foreign currency translation, impairment and other charges and gains, as well as material regulatory and other income tax impacts, and bases incentive compensation plans on these results because the Company believes this better represents underlying business trends.

Certain columns and rows within the financial statements and tables presented may not add due to rounding. Percentages have been calculated from the underlying whole-dollar amounts for all periods presented.

Accelerating the Organization

In January 2023, the Company announced an evolution of its successful Accelerating the Arches strategy. Enhancements to the strategy include the addition of Restaurant Development to the Company’s growth pillars and an internal effort to modernize ways of working, Accelerating the Organization, both of which are aimed at elevating the Company’s performance.

Accelerating the Organization is designed to unlock further growth as the Company focuses on becoming faster, more innovative and more efficient for its customers and people. As the Company furthers its operating model and technology transformation, primarily through its Global Business Services strategy, under Accelerating the Organization, it will continue to incur various restructuring charges through its anticipated completion during 2027. These restructuring charges may include employee termination benefits, costs to terminate contracts, including lease terminations, and professional services and other costs.

Impact of Foreign Currency Translation

The impact of foreign currency translation on consolidated operating results for the quarter and the year primarily reflected the strengthening of most major currencies against the U.S. Dollar. Results for the year were partly offset by the weakening of the Australian Dollar and Canadian Dollar.

While changes in foreign currency exchange rates affect reported results, McDonald's mitigates exposures, where practical, by purchasing goods and services in local currencies, financing in local currencies and hedging certain foreign-denominated cash flows. Results excluding the effect of foreign currency translation (referred to as constant currency) are calculated by translating current year results at prior year average exchange rates.

IMPACT OF FOREIGN CURRENCY TRANSLATION

Dollars in millions, except per share data



					Currency Translation Benefit/ (Cost)

Quarters Ended December 31,	2025		2024		2025
Revenues	$	7,009	$	6,388		$	223
Franchised margins	3,632		3,324			109
Company-owned and operated margins	377		333			14
Selling, general & administrative expenses	872		800			(11)
Operating income	3,156		2,868			111
Net income	2,164		2,017			70
Earnings per share-diluted	$	3.03	$	2.80		$	0.10

					Currency Translation Benefit/ (Cost)

Years Ended December 31,	2025		2024		2025
Revenues	$	26,885	$	25,920		$	385
Franchised margins	13,930		13,178			190
Company-owned and operated margins	1,422		1,447			24
Selling, general & administrative expenses	3,039		2,858			(18)
Operating income	12,393		11,712			198
Net income	8,563		8,223			114
Earnings per share-diluted	$	11.95	$	11.39		$	0.16

Net Income and Diluted Earnings per Share

For the quarter, net income increased 7% (4% in constant currencies) to $2,164 million, and diluted earnings per share increased 8% (5% in constant currencies) to $3.03. Foreign currency translation had a positive impact of $0.10 on diluted earnings per share.

For the year, net income increased 4% (3% in constant currencies) to $8,563 million, and diluted earnings per share increased 5% (4% in constant currencies) to $11.95. Foreign currency translation had a positive impact of $0.16 on diluted earnings per share.

Results for 2025 included the following:

Results for 2024 included the following:

Excluding the above items, operating income growth for both periods was primarily driven by higher sales-driven Franchised margins.

During the quarter, the Company paid a dividend of $1.86 per share, or $1.3 billion, resulting in total dividends paid for the year of $5.1 billion. Additionally, during the quarter, the Company repurchased 1.8 million shares of stock for $560 million, resulting in total purchases for the year of 6.7 million shares, or $2.0 billion. In October 2025, the Company declared a 5% increase in its quarterly cash dividend to $1.86 per share, payable on December 15, 2025.

NET INCOME AND EARNINGS PER SHARE-DILUTED RECONCILIATION

Dollars in millions, except per share data


	Quarters Ended December 31,
	Net Income								Earnings per share - diluted
	2025		2024		Inc/ (Dec)		Inc/ (Dec) Excluding Currency Translation		2025		2024		Inc/ (Dec)		Inc/ (Dec) Excluding Currency Translation
GAAP	$	2,164	$	2,017	7	%	4	%	$	3.03	$	2.80	8	%	5	%
(Gains)/Charges, net of tax	64		18						0.09		0.03
Non-GAAP	$	2,228	$	2,035	9	%	6	%	$	3.12	$	2.83	10	%	7	%


	Years Ended December 31,
	Net Income								Earnings per share - diluted
	2025		2024		Inc/ (Dec)		Inc/ (Dec) Excluding Currency Translation		2025		2024		Inc/ (Dec)		Inc/ (Dec) Excluding Currency Translation
GAAP	$	8,563	$	8,223	4	%	3	%	$	11.95	$	11.39	5	%	4	%
(Gains)/Charges, net of tax	178		236						0.25		0.33
Non-GAAP	$	8,741	$	8,459	3	%	2	%	$	12.20	$	11.72	4	%	3	%

Revenues

The Company's revenues consist of fees from restaurants owned and operated by franchisees, developmental licensees and affiliates and sales by Company-owned and operated restaurants. Revenues from conventional franchised restaurants include rent and royalties based on a percent of sales with minimum rent payments, and initial fees. Revenues from restaurants licensed to developmental licensees and affiliates include a royalty based on a percent of sales, and generally include initial fees. The Company’s Other revenues are primarily comprised of fees paid by franchisees to recover a portion of costs incurred by the Company for various technology and digital platforms and revenues from brand licensing arrangements to market and sell consumer packaged goods using the McDonald’s brand.

Franchised restaurants represented approximately 95% of McDonald's restaurants worldwide at December 31, 2025. The Company's heavily franchised business model is designed to generate stable and predictable revenue, which is largely a function of franchisee sales, and resulting cash flow streams.

REVENUES

Dollars in millions


Quarters Ended December 31,	2025		2024		Inc/ (Dec)		Inc/ (Dec) Excluding Currency Translation

Franchised revenues
U.S.	$	1,886	$	1,794	5	%	5	%
International Operated Markets	1,924		1,706		13		6
International Developmental Licensed Markets & Corporate	500		458		9		6
Total	$	4,311	$	3,958	9	%	6	%


Company-owned and operated sales
U.S.	$	810	$	780	4	%	4	%
International Operated Markets	1,614		1,434		12		7
International Developmental Licensed Markets & Corporate	113		95		19		4
Total	$	2,536	$	2,310	10	%	6	%


Total Franchised revenues and Company-owned and operated sales
U.S.	$	2,696	$	2,574	5	%	5	%
International Operated Markets	3,538		3,141		13		6
International Developmental Licensed Markets & Corporate	613		553		11		6
Total	$	6,847	$	6,268	9	%	6	%


Total Other revenues	$	162	$	120	35	%	33	%


Total Revenues	$	7,009	$	6,388	10	%	6	%


Years Ended December 31,	2025		2024		Inc/ (Dec)		Inc/ (Dec) Excluding Currency Translation

Franchised revenues
U.S.	$	7,371	$	7,211	2	%	2	%
International Operated Markets	7,279		6,746		8		5
International Developmental Licensed Markets & Corporate	1,898		1,758		8		7
Total	$	16,548	$	15,715	5	%	4	%


Company-owned and operated sales
U.S.	$	3,115	$	3,197	(3)	%	(3)	%
International Operated Markets	6,131		5,713		7		5
International Developmental Licensed Markets & Corporate	443		872		(49)		n/m
Total	$	9,690	$	9,782	(1)	%	(2)	%


Total Franchised revenues and Company-owned and operated sales
U.S.	$	10,487	$	10,407	1	%	1	%
International Operated Markets	13,410		12,458		8		5
International Developmental Licensed Markets & Corporate	2,342		2,630		(11)		(13)
Total	$	26,238	$	25,496	3	%	1	%


Total Other revenues	$	647	$	423	53	%	52	%


Total Revenues	$	26,885	$	25,920	4	%	2	%

n/m Not meaningful

•Total Franchised revenues and Company-owned and operated sales increased 9% (6% in constant currencies) for the quarter and increased 3% (1% in constant currencies) for the year. Both periods benefited from positive sales performance in the International Operated Markets. In the U.S., total revenues for the quarter was driven by positive sales performance, while the year was driven by positive franchised sales performance, partly offset by negative Company-owned and operated sales performance. International Developmental Licensed Markets & Corporate revenues for the quarter benefited from positive sales performance, while the year was impacted by the prior year sale of McDonald's business in South Korea, partly offset by the prior year acquisition of McDonald's business in Israel and positive sales performance.

Comparable Sales

Comparable sales is a key performance indicator used within the retail industry and is reviewed by management to assess business trends. Comparable sales exclude the impact of currency translation and sales from hyperinflationary markets. Increases or decreases in comparable sales represent the percent change in constant currency sales from the same period in the prior year for all restaurants, whether owned and operated by the Company or by franchisees, in operation at least thirteen months, including those temporarily closed. Comparable sales are driven by changes in guest counts and average check, the latter of which is affected by changes in pricing and product mix.


	Increase/(Decrease)
	Quarters Ended December 31,				Years Ended December 31,
	2025		2024		2025		2024
U.S.	6.8	%	(1.4)	%	2.1	%	0.2	%
International Operated Markets	5.2		0.1		3.2		(0.2)
International Developmental Licensed Markets	4.5		4.1		4.6		(0.3)
Total Company	5.7	%	0.4	%	3.1	%	(0.1)	%

Systemwide Sales and Franchised Sales

The following tables present Systemwide sales growth rates and franchised sales. Systemwide sales include sales at all restaurants, whether owned and operated by the Company or by franchisees. While franchised sales are not recorded as revenues by the Company, management believes the information is important in understanding the Company's financial performance because these sales are the basis on which the Company calculates and records franchised revenues and are indicative of the financial health of the franchisee base. Changes in Systemwide sales are primarily driven by comparable sales and net restaurant unit expansion.

SYSTEMWIDE SALES*




	Quarter Ended December 31, 2025				Year Ended December 31, 2025
	Inc/ (Dec)		Inc/ (Dec) Excluding Currency Translation		Inc/ (Dec)		Inc/ (Dec) Excluding Currency Translation
U.S.	8	%	8	%	3	%	3	%
International Operated Markets	14		7		8		5

International Developmental Licensed Markets	12		9		10		10
Total Company	11	%	8	%	7	%	5	%

*Unlike comparable sales, the Company has not excluded sales from hyperinflationary markets from Systemwide sales as these sales are the basis on which the Company calculates and records revenues.

FRANCHISED SALES

Dollars in millions


Quarters Ended December 31,	2025		2024		Inc/ (Dec)		Inc/ (Dec) Excluding Currency Translation
U.S.	$	13,568	$	12,529	8	%	8	%
International Operated Markets	11,305		9,906		14		7
International Developmental Licensed Markets	9,146		8,168		12		9
Total	$	34,018	$	30,603	11	%	8	%

Ownership type
Conventional franchised	$	24,714	$	22,298	11	%	8	%
Developmental licensed	5,964		5,223		14		10
Foreign affiliated	3,340		3,082		8		8
Total	$	34,018	$	30,603	11	%	8	%

Years Ended December 31,	2025		2024		Inc/ (Dec)		Inc/ (Dec) Excluding Currency Translation
U.S.	$	51,946	$	50,272	3	%	3	%
International Operated Markets	42,440		39,132		8		5
International Developmental Licensed Markets	35,289		31,529		12		12
Total	$	129,675	$	120,933	7	%	6	%

Ownership type
Conventional franchised	$	93,761	$	88,934	5	%	4	%
Developmental licensed	22,451		19,736		14		13
Foreign affiliated	13,463		12,263		10		9
Total	$	129,675	$	120,933	7	%	6	%

Restaurant Margins

Franchised restaurant margins are measured as revenues from franchised restaurants less franchised restaurant occupancy costs. Franchised restaurant occupancy costs include lease expense and depreciation, as the Company generally owns or secures a long-term lease on the land and building for the restaurant location.

Company-owned and operated restaurant margins are measured as sales from Company-owned and operated restaurants less costs for food & paper, payroll & employee benefits and occupancy & other operating expenses necessary to run an individual restaurant. Company-owned and operated margins exclude costs that are not allocated to individual restaurants, primarily payroll & employee benefit costs of non-restaurant support staff, which are included in Selling, general and administrative expenses.

RESTAURANT MARGINS

Dollars in millions


					Inc/ (Dec) Excluding Currency Translation
Quarters Ended December 31,	2025		2024				Inc/ (Dec)
Franchised
U.S.	$	1,561	$	1,472	6	%	6	%
International Operated Markets	1,571		1,394		13		6
International Developmental Licensed Markets & Corporate	500		458		9		6
Total	$	3,632	$	3,324	9	%	6	%
Company-owned and operated
U.S.	$	95	$	89	6	%	6	%
International Operated Markets	278		237		18		12
International Developmental Licensed Markets & Corporate	n/m		n/m		n/m		n/m
Total	$	377	$	333	13	%	9	%
Total restaurant margins
U.S.	$	1,656	$	1,561	6	%	6	%
International Operated Markets	1,850		1,631		13		7
International Developmental Licensed Markets & Corporate	n/m		n/m		n/m		n/m
Total	$	4,009	$	3,657	10	%	6	%

			Inc/ (Dec) Excluding Currency Translation
Years Ended December 31,	2025				2024		Inc/ (Dec)
Franchised
U.S.	$	6,078	$	5,916	3	%	3	%
International Operated Markets	5,954		5,514		8		5
International Developmental Licensed Markets & Corporate	1,897		1,748		9		8
Total	$	13,930	$	13,178	6	%	4	%
Company-owned and operated
U.S.	$	360	$	417	(14)	%	(14)	%
International Operated Markets	1,031		948		9		6
International Developmental Licensed Markets & Corporate	n/m		n/m		n/m		n/m
Total	$	1,422	$	1,447	(2)	%	(3)	%
Total restaurant margins
U.S.	$	6,438	$	6,334	2	%	2	%
International Operated Markets	6,985		6,462		8		5
International Developmental Licensed Markets & Corporate	n/m		n/m		n/m		n/m
Total	$	15,351	$	14,625	5	%	3	%

n/m Not meaningful

•Franchised margins in the U.S., International Operated Markets and the International Developmental Licensed Markets & Corporate reflected sales-driven growth for both periods. Franchised margins represented approximately 90% of restaurant margin dollars.

•Company-owned and operated margins for both periods reflected the impact of ongoing inflationary cost pressures in the U.S. and the International Operated Markets. The U.S. reflected sales-driven growth for the quarter and was impacted by negative sales performance for the year, while the International Operated Markets reflected sales-driven growth for both periods.

•Total restaurant margins included depreciation and amortization expense of $453 million and $417 million for the quarters ended 2025 and 2024, respectively, and $1.7 billion and $1.6 billion for the years ended 2025 and 2024, respectively.

Selling, General & Administrative Expenses

SELLING, GENERAL & ADMINISTRATIVE EXPENSES

Dollars in millions


Years Ended December 31,	2025		2024		Inc/ (Dec)		Inc/ (Dec) Excluding Currency Translation
U.S.	$	653	$	654	—	%	—	%
International Operated Markets	705		631		12		9
International Developmental Licensed Markets & Corporate	1,682		1,573		7		7
Total Selling, General & Administrative Expenses	$	3,039	$	2,858	6	%	6	%

Less: Incentive-Based Compensation(1)	$	370	$	268	38	%	38	%
Total Excluding Incentive-Based Compensation	$	2,670	$	2,591	3	%	2	%

(1) Includes all cash incentives and share-based compensation expense.

•Selling, general and administrative expenses increased $181 million, or 6% (6% in constant currencies) for the year primarily reflecting higher employee costs, including incentive-based compensation.

•Selling, general and administrative expenses as a percent of Systemwide sales were 2.2% for both the years ended 2025 and 2024.

Other Operating (Income) Expense, Net

OTHER OPERATING (INCOME) EXPENSE, NET

Dollars in millions



	Quarters Ended December 31,				Years Ended December 31,
	2025		2024		2025		2024
Gains on sales of restaurant businesses	$	(83)	$	(72)	$	(133)	$	(94)
Equity in earnings of unconsolidated affiliates	(10)		(15)		(190)		(157)
Asset dispositions and other (income) expense, net	16		94		97		100
Impairment and other charges (gains), net	80		4		229		291
Total	$	4	$	10	$	2	$	139

•Gains on sales of restaurant businesses increased for the year primarily due to more sales of restaurants in the International Operated Markets and the U.S.

•Equity in earnings of unconsolidated affiliates for the year primarily reflected higher equity in earnings in Japan and China as a result of improved operating performance.

•The decrease in asset dispositions and other (income) expense, net for the quarter primarily reflected higher gains on sale of excess properties.

•Impairment and other charges (gains), net reflected net pre-tax charges of $80 million and $229 million for the quarter and the year, respectively, primarily related to restructuring charges associated with Accelerating the Organization.

Results for the quarter and year ended 2024 reflected net pre-tax charges of $74 million and $221 million, respectively, primarily related to restructuring charges associated with Accelerating the Organization and net pre-tax gains of $71 million for the quarter and net pre-tax charges of $70 million for the year, primarily consisting of property sale gains, transaction costs and non-cash impairment charges associated with the sale of McDonald's business in South Korea and transaction costs associated with the acquisition of McDonald's business in Israel.

Operating Income

OPERATING INCOME & OPERATING MARGIN

Dollars in millions


Quarters Ended December 31,	2025		2024		Inc/ (Dec)		Inc/ (Dec) Excluding Currency Translation
U.S.	$1,481		$1,333		11	%	11	%
International Operated Markets	1,696		1,487		14		7
International Developmental Licensed Markets & Corporate	(21)		48		n/m		n/m
Total	$3,156		$2,868		10	%	6	%




Years Ended December 31,	2025		2024		Inc/ (Dec)		Inc/ (Dec) Excluding Currency Translation
U.S.	$5,808		$5,733		1	%	1	%
International Operated Markets	6,382		5,946		7		4
International Developmental Licensed Markets & Corporate	203		33		n/m		n/m
Total	$12,393		$11,712		6	%	4	%

Operating margin	46.1	%	45.2	%

n/m Not meaningful

•Operating income increased $287 million, or 10% (6% in constant currencies), for the quarter and increased $680 million, or 6% (4% in constant currencies), for the year. Results reflected net pre-tax charges of $80 million and $229 million for the quarter and the year, respectively, primarily related to restructuring charges associated with Accelerating the Organization.

Results for the quarter and year ended 2024 reflected pre-tax restructuring charges of $74 million and $221 million, respectively, primarily related to Accelerating the Organization and net pre-tax gains of $71 million for the quarter and net pre-tax charges of $70 million for the year, primarily consisting of property sale gains, transaction costs and non-cash impairment charges.

OPERATING INCOME & OPERATING MARGIN RECONCILIATION*

Dollars in millions



	Quarters Ended December 31,						Years Ended December 31,
	2025	2024	Inc/ (Dec)		Inc/ (Dec) Excluding Currency Translation		2025		2024		Inc/ (Dec)		Inc/ (Dec) Excluding Currency Translation
GAAP operating income	$3,156	$2,868	10	%	6	%	$12,393		$11,712		6	%	4	%
(Gains)/Charges	80	4					229		291
Non-GAAP operating income	$3,236	$2,872	13	%	9	%	$12,621		$12,003		5	%	3	%

Non-GAAP operating margin							46.9	%	46.3	%

*Refer to the Impairment and other charges (gains), net line within the Other Operating (Income) Expense, Net section on page 8 for details of the charges in this table.

•Excluding the current and prior year charges shown in the table above, operating income increased 13% (9% in constant currencies) for the quarter and 5% (3% in constant currencies) for the year. Results for both periods reflected positive operating results, primarily due to higher sales-driven Franchised margins across all segments. Results for the year were partly offset by higher Selling, general, and administrative expenses in the International Developmental Licensed Markets & Corporate and the International Operated Markets.

•Operating margin is defined as operating income as a percent of total revenues. The contributions to operating margin differ by segment due to each segment's ownership structure, primarily due to the relative percentage of franchised versus Company-owned and operated restaurants. Additionally, temporary restaurant closures, which vary by segment, impact the contribution of each segment to the consolidated operating margin.

The increase in non-GAAP operating margin was primarily due to the prior year sale of McDonald's business in South Korea, partly offset by the prior year acquisition of McDonald's business in Israel.

Interest Expense

•Interest expense increased 8% (6% in constant currencies) for the quarter and 5% (4% in constant currencies) for the year. Results for both periods reflected the impact of foreign currency translation and higher average interest rates.

Nonoperating (Income) Expense, Net

NONOPERATING (INCOME) EXPENSE, NET

Dollars in millions



	Quarters Ended December 31,				Years Ended December 31,
	2025		2024		2025		2024
Interest income	$	(19)	$	(18)	$	(82)	$	(103)
Foreign currency and hedging activity	15		(11)		40		6
Other (income) expense, net	(7)		(21)		(45)		(42)
Total	$	(12)	$	(49)	$	(87)	$	(139)

•Interest income for the year decreased due to lower average cash balances and lower average interest rates.

Income Taxes

•The effective income tax rate was 21.5% and 20.5% for the quarters ended 2025 and 2024, respectively, and 21.4% and 20.5% for the years ended 2025 and 2024, respectively. The effective tax rates for the quarter and year ended 2024 reflected discrete income tax benefits related to restructuring initiatives.

Cash Flows

The Company has a long history of generating significant cash from operations and has substantial credit capacity to fund operating and discretionary spending to invest in opportunities to grow the business, such as restaurant development, in addition to funding debt service payments, dividends and share repurchases.

Cash provided by operations totaled $10.6 billion in 2025, an increase of $1.1 billion driven by favorable working capital movement and improved operating results. Free cash flow was $7.2 billion in 2025, a decrease of $510 million or 8%. The Company’s free cash flow conversion rate was 84% in 2025 and 81% in 2024.

Cash used for investing activities totaled $3.8 billion in 2025, a decrease of $1.5 billion compared with 2024. The decrease was primarily due to the Company's increased ownership stake in Grand Foods Holding in 2024.

Cash used for financing activities totaled $7.1 billion in 2025, down slightly compared with 2024. The decrease was primarily due to lower Treasury stock purchases in the current year.

The Company’s cash and equivalents balance was $774 million and $1,085 million at year end 2025 and 2024, respectively. In addition to cash and equivalents on hand and cash provided by operations, the Company can meet short-term funding needs through its continued access to commercial paper borrowings and line of credit agreements.

Outlook

Based on current conditions, the following is provided to assist in forecasting the Company's future results for 2026.

•The Company expects net restaurant unit expansion will contribute approximately 2.5% to 2026 Systemwide sales growth, in constant currencies.

•The Company expects full year 2026 Selling, general and administrative expenses of about 2.2% of Systemwide sales.

•The Company expects 2026 operating margin percent to be in the mid-to-high 40% range.

•Based on current interest and foreign currency exchange rates, the Company expects interest expense for the full year 2026 to increase between 4% and 6% driven primarily by higher average interest rates.

•The Company expects the effective income tax rate for the full year 2026 to be between 21% and 23%. Some volatility may result in a quarterly tax rate outside of the annual range.

•The Company expects 2026 capital expenditures to be between $3.7 and $3.9 billion, with the majority directed towards new restaurant unit expansion across the U.S. and International Operated Markets. Globally, the Company expects to open approximately 2,600 restaurants. The Company expects to open about 750 restaurants in the U.S. and International Operated Markets, and that developmental licensees and affiliates will contribute capital towards more than 1,800 restaurant openings in their respective markets. The Company expects approximately 2,100 net restaurant additions in 2026.

•The Company expects to achieve a free cash flow conversion rate in the low-to-mid 80% range.

Restaurant Information

SYSTEMWIDE RESTAURANTS


At December 31,	2025	2024	Inc/ (Dec)
U.S.	13,706	13,557	149

International Operated Markets
France	1,630	1,589	41
Canada	1,520	1,489	31
United Kingdom	1,507	1,470	37
Germany	1,382	1,367	15
Australia	1,075	1,051	24
Italy	805	755	50
Spain	665	635	30
Poland	618	580	38
Other	1,643	1,576	67
Total International Operated Markets	10,845	10,512	333

International Developmental Licensed Markets
China	7,740	6,820	920
Japan	3,025	2,989	36
Brazil	1,230	1,173	57
Philippines	851	792	59
India	757	665	92
Saudi Arabia	458	441	17
Taiwan	430	417	13
Other	6,314	6,111	203
Total International Developmental Licensed Markets	20,805	19,408	1,397

Systemwide restaurants	45,356	43,477	1,879

Countries	114	114	—

SYSTEMWIDE RESTAURANTS BY TYPE


At December 31,	2025	2024	Inc/ (Dec)
U.S.
Conventional franchised	13,062	12,886	176
Company-owned and operated	644	671	(27)
Total U.S.	13,706	13,557	149

International Operated Markets
Conventional franchised	9,508	9,191	317
Developmental licensed	177	177	—
Total Franchised	9,685	9,368	317
Company-owned and operated	1,160	1,144	16
Total International Operated Markets	10,845	10,512	333

International Developmental Licensed Markets
Developmental licensed	9,498	9,070	428
Foreign affiliated	11,072	10,108	964
Total Franchised	20,570	19,178	1,392
Company-owned and operated	235	230	5
Total International Developmental Licensed Markets	20,805	19,408	1,397

Systemwide
Conventional franchised	22,570	22,077	493
Developmental licensed	9,675	9,247	428
Foreign affiliated	11,072	10,108	964
Total Franchised	43,317	41,432	1,885
Company-owned and operated	2,039	2,045	(6)
Total Systemwide	45,356	43,477	1,879

Cautionary Statement Regarding Forward-Looking Statements

The information in this report contains forward-looking statements about future events and circumstances and their effects upon revenues, expenses and business opportunities. Generally speaking, any statement in this report not based upon historical fact is a forward-looking statement. Forward-looking statements can also be identified by the use of forward-looking or conditional words, such as “could,” “should,” “can,” “continue,” “aim,” “estimate,” “forecast,” “intend,” “look,” “may,” “will,” “expect,” “believe,” “anticipate,” “plan,” “remain,” “confident,” “commit,” “enable,” “potential” and “trajectory” or similar expressions. In particular, statements regarding our plans, strategies, prospects and expectations regarding our business and industry are forward-looking statements. They reflect our expectations, are not guarantees of performance and speak only as of the dates the statements are made. Except as required by law, we do not undertake to update such forward-looking statements. You should not rely unduly on forward-looking statements.

Risk Factors

Our business results are subject to a variety of risks, including those that are described below and elsewhere in our filings with the SEC. The risks described below are not the only risks we face. Additional risks not currently known to us or that we currently deem to be immaterial may also significantly adversely affect our business. If any of these risks were to materialize or intensify, our expectations (or the underlying assumptions) may change and our performance may be adversely affected.

STRATEGY AND BRAND

If we do not successfully evolve and execute against our business strategies, we may not be able to drive business growth.

To drive Systemwide sales, operating income and free cash flow growth, our business strategies – including the components of our Accelerating the Arches growth strategy – must be effective in maintaining and strengthening customer appeal and capturing additional market share. Whether these strategies are successful depends mainly on our System’s continued ability to:

•capitalize on our global scale, iconic brand and local market presence to build upon our historic strengths and competitive advantages, including by maximizing our marketing, committing to our core menu items, and doubling down on digital, delivery, drive thru and restaurant development;

•innovate and differentiate the McDonald’s experience, including by preparing and serving our food in a way that balances value and convenience to our customers with profitability;

•build upon our investments to transform and enhance the customer experience, including building one of the world’s largest consumer platforms to fuel engagement;

•run great restaurants by building the easiest and most efficient restaurant operating platform which enables franchisees to run restaurants more efficiently and utilize the latest cloud-based technology to make it easier for crews to deliver exceptional customer service;

•accelerate our existing strategies, including through growth opportunities and building a modern company platform that unlocks speed and innovation throughout the organization; and

•evolve and adjust our strategies in response to, among other things, changing consumer behavior, and other events impacting our results of operations and liquidity.

If we are delayed or unsuccessful in evolving or executing against our strategies, if the execution of our strategies proves to be more difficult, costly or time consuming than expected, or if our strategies do not yield the desired results, our business, financial condition and results of operations may suffer.

Failure to preserve the value or relevance of our brand could have an adverse impact on our financial results.

To continue to be successful in the future, we believe we must preserve, enhance and leverage the value and relevance of our brand, including our corporate purpose, mission and values. Brand value is based in part on consumer perceptions, which are affected by a variety of factors, including the nutritional content and preparation of our food, the ingredients we use, the manner in which we source commodities and general business practices across the System, including the people practices at McDonald’s restaurants. Our business could also be impacted by business incidents or practices, whether actual or perceived, particularly if they receive considerable publicity or result in litigation or governmental investigations or proceedings, as well as by our perceived position or lack of position on environmental, social responsibility, public policy, geopolitical and similar matters. In addition, we cannot ensure that franchisees or business partners will not take actions that adversely affect the value and relevance of our brand. Consumer perceptions may also be affected by adverse commentary from third parties, including through social media or conventional media outlets, regarding the quick-service category of the IEO segment or our brand, culture, operations, suppliers or franchisees. If we are unsuccessful in addressing adverse commentary or perceptions, whether or not accurate, our brand and financial results may suffer.

If we do not anticipate and address industry trends and evolving consumer preferences and effectively execute our pricing, promotional and marketing plans, our business could suffer.

Our continued success depends on our System’s ability to build upon our historic strengths and competitive advantages. To do so, we need to anticipate and respond effectively to continuously shifting consumer demographics and industry trends in sourcing, food and beverage preparation, menu offerings, and consumer behavior and preferences, including with respect to the use of digital channels, health and wellness trends and environmental and social responsibility matters. If we are not able to predict, or quickly and effectively respond to, these changes, or if our competitors are able to do so more effectively, our financial results could be adversely impacted.

Consumer acceptance of our menu offerings is subject to change for a variety of reasons, and some changes can occur rapidly. For example, health, environmental and other scientific studies and practices (such as changes to dietary guidelines or use of weight-loss medications), continuously evolve and may have contradictory implications, drive popular opinion, litigation and regulation, and alter consumer behavior in ways that affect the “informal eating out” (“IEO”) segment or perceptions of our brand, generally or relative to available alternatives.

Our ability to build upon our strengths and advantages also depends on the impact of pricing, promotional and marketing plans across the System, and the ability to adjust these plans to respond quickly and effectively to evolving customer behavior and preferences, as well as shifting economic and competitive conditions. Existing or future pricing strategies and marketing plans, as well as the value proposition they represent, are expected to continue to be important components of our business strategy. However, they may not be successful, or may not be as successful as the efforts of our competitors, which could negatively impact sales, guest counts and market share.

Additionally, we operate in a complex and costly advertising environment. Our marketing and advertising programs may not be successful in reaching consumers in the way we intend. Our success depends in part on whether the allocation of our advertising and marketing resources across different channels, including digital, allows us to reach consumers effectively, efficiently and in ways that are meaningful to them. If our advertising and marketing programs are not successful, or are not as successful as those of our competitors, our sales, guest counts and market share could decrease.

Our investments to transform and enhance the customer experience, including through technology, may not generate the expected results.

Our long-term business objectives depend on the successful Systemwide execution of our strategies. We continue to build upon our investments in restaurant development, technology, digital engagement and delivery in order to transform and enhance the customer experience. As part of these investments, we are continuing to place emphasis on improving our service model and strengthening relationships with customers, in part through digital channels and loyalty initiatives, mobile ordering and payment systems, and enhancing our drive thru technologies, which efforts may not generate expected results. We also continue to expand and refine our delivery initiatives, including through integrating delivery and mobile ordering. Utilizing a third-party delivery service may not have the same level of profitability as a non-delivery transaction and may introduce additional food quality, food safety and customer satisfaction risks. If these customer experience initiatives are not successfully executed, or if we do not fully realize the intended benefits of these significant investments, our business results may suffer.

We face intense competition in our markets, which could hurt our business.

We compete primarily in the IEO segment, which is highly competitive. We also face sustained, intense competition from traditional, fast casual and other competitors, which may include many non-traditional market participants such as convenience stores, grocery stores, coffee shops and online retailers. We expect our environment to continue to be highly competitive and our results in any particular reporting period may be impacted by a contracting IEO segment or by new or continuing actions, product offerings, technologies or consolidation of our competitors and third-party partners, which may have short- and long-term impacts on our results.

We compete primarily on the basis of product choice, quality, affordability, service and location. In particular, we believe our ability to compete successfully in the current market environment depends on our ability to improve existing products, successfully develop and introduce new products, price our products appropriately, deliver a relevant customer experience, manage the complexity of our restaurant operations, manage our investments in restaurant development, technology, digital engagement and delivery, and respond effectively to our competitors’ actions or offerings or to unforeseen disruptive actions. There can be no assurance these strategies will be effective, and some strategies may be effective at improving some metrics while adversely affecting others, which could have the overall effect of harming our business.

We may not be able to adequately protect our intellectual property or adequately ensure that we are not infringing the intellectual property of others, which could harm the value of the McDonald’s brand and our business.

Our success depends on our continued ability to use our existing trademarks and service marks in order to increase brand awareness and further develop our branded products in both domestic and international markets. We rely on a combination of trademarks, copyrights, service marks, trade secrets, patents and other intellectual property rights to protect our brand and branded products.

We have registered certain trademarks and have other trademark registrations pending in the U.S. and certain foreign jurisdictions. The trademarks that we currently use have not been, and may never be, registered in all of the countries outside of the U.S. in which we do business or may do business in the future. It may be costly and time consuming to protect our intellectual property, particularly in rapidly evolving areas, and the steps we have taken to do so in the U.S. and foreign countries may not be adequate. In addition, the steps we have taken may not adequately ensure that we do not infringe the intellectual property of others, and third parties may claim infringement by us in the future. In particular, we may be involved in intellectual property claims, including often aggressive or opportunistic attempts to enforce patents used in information technology systems, which might affect our operations and results. Any claim of infringement, whether or not it has merit, could, particularly in rapidly evolving areas, be time consuming, or result in costly litigation and could also have an adverse impact on our business.

We cannot ensure that franchisees and other third parties who hold licenses to our intellectual property will not take actions that adversely affect the value of our intellectual property. Moreover, rapid technological developments, including artificial intelligence (AI)-driven tools, may increase our exposure to existing intellectual property risks, including theft or unlicensed use, intellectual property disputes and enforcement challenges.

OPERATIONS

The global scope of our business subjects us to risks that could negatively affect our business.

We encounter differing and evolving cultural, regulatory, geopolitical and economic environments within and among the more than 100 countries where McDonald’s restaurants operate, and our ability to achieve our business objectives depends on the System’s success in these environments. Meeting customer expectations is complicated by the risks inherent in our global operating environment, and our global success is partially dependent on our System’s ability to leverage operating successes across markets and brand perceptions. Planned initiatives may not have appeal across multiple markets with McDonald’s customers and could drive unanticipated changes in customer perceptions and negatively impact our business results.

Disruptions in operations or price volatility in a market can also result from governmental actions (whether proposed or realized, unilateral or bilateral), such as price, foreign exchange or trade-related tariffs or controls, trade policies and regulations, sanctions and counter sanctions, government-mandated closure of our, our franchisees’ or our suppliers’ operations, and asset seizures. Some or all of the above-referenced disruptions or volatility can also result from acts of war, terrorism or other hostilities. Such governmental actions may have a broader impact on macroeconomic conditions, geopolitical tensions, anti-American sentiment, consumer demand and the ability of us and our franchisees to operate in certain geographic areas, which in turn may have an adverse impact on our business and financial results.

While we may face challenges and uncertainties in any of the markets in which we operate, such challenges and uncertainties are often heightened in developing markets, which may entail a relatively higher risk of political instability, economic volatility, crime, corruption and social and ethnic unrest. In many cases, such challenges may be exacerbated by the lack of an independent and experienced judiciary and uncertainty in how local law is applied and enforced, including in areas most relevant to commercial transactions and foreign investment. An inability to manage effectively the risks associated with our international operations could adversely affect our business and financial results.

Supply chain interruptions may increase costs or reduce revenues.

We depend on the effectiveness of our supply chain management to assure a reliable and sufficient supply of quality products, equipment and other materials on favorable terms. Although many of these items are sourced from a wide variety of suppliers in countries around the world, certain items have limited suppliers, which increases our reliance on those suppliers. Supply chain interruptions and related price increases have in the past and may in the future adversely affect us as well as our suppliers and franchisees, whose performance may have a significant impact on our results. Such interruptions and price increases could be caused by shortages, inflationary pressures, tariffs, unexpected increases in demand, transportation-related issues, labor-related issues, technology-related issues, weather-related events, natural disasters, geo-political tensions, acts of war, terrorism or other hostilities, or other factors beyond our control or that of our suppliers or franchisees. Interruptions in our System’s supply chain or ineffective contingency planning can increase our costs, impact ingredient quality, delay new restaurant openings, and/or limit the quality or availability of products, equipment and other materials that are critical to our System’s operations or to restaurant development.

Our franchise business model presents a number of risks.

Our success as a heavily franchised business relies to a large degree on the financial success and cooperation of our franchisees, including our developmental licensees and affiliates. Our restaurant margins arise from two sources: fees from franchised restaurants (e.g., rent and royalties based on a percentage of sales) and, to a lesser degree, sales from Company-owned and operated restaurants. Our franchisees manage their businesses independently and therefore are responsible for the day-to-day operation of their restaurants. The revenues we realize from franchised restaurants are largely dependent on the ability of our franchisees to grow their sales. Business risks affecting our operations also affect our franchisees. If franchisee sales trends worsen, or any of such risks materialize or intensify, our financial results could be negatively affected, which may be material.

Our success also relies on the willingness and ability of our franchisees and affiliates to implement major initiatives, which may include financial investment, and to remain aligned with us on operating, value/promotional and capital-intensive reinvestment plans. The ability of franchisees to contribute to the achievement of our plans is dependent in large part on the availability to them of funding at reasonable interest rates and may be negatively impacted by the financial markets in general, by their or our creditworthiness or by banks’ lending practices. If our franchisees are unwilling or unable to invest in major initiatives or are unable to obtain financing at commercially reasonable rates, or at all, our future growth and results of operations could be adversely affected.

Our operating performance could also be negatively affected if our franchisees experience food safety or other operational problems or project an image inconsistent with our brand and values, particularly if our contractual and other rights and remedies are limited, costly to exercise or subjected to litigation and potential delays. If franchisees do not successfully operate restaurants in a manner consistent with our required standards, our brand’s image and reputation could be harmed, which in turn could hurt our business and operating results.

Our ownership mix also affects our results and financial condition. The decision to own restaurants or to operate under franchise or license agreements is driven by many factors whose interrelationship is complex. The benefits of our more heavily franchised structure depend on various factors, including whether we have effectively selected franchisees, licensees and/or affiliates that meet our rigorous standards, whether we are able to successfully integrate them into our structure and whether their performance and the resulting ownership mix supports our brand and financial objectives.

Continued challenges with respect to labor, including availability and cost, could adversely impact our business and results of operations.

Our success depends in part on our System’s ability to effectively attract, recruit, develop, motivate and retain qualified individuals to work in McDonald’s restaurants and to maintain appropriately-staffed restaurants in an intensely competitive labor market. We and our franchisees have experienced and may continue to experience challenges in adequately staffing certain McDonald’s restaurants, which can negatively impact operations, including speed of service to customers, and customer satisfaction levels. The System’s ability to meet its labor needs as they evolve is generally subject to a variety of factors, including the availability of sufficient workforce, unemployment levels and prevailing wages in the markets in which we operate.

Further, our System has experienced increased costs and competition associated with attracting, recruiting, developing, motivating and retaining qualified employees, as well as with promoting awareness of the opportunities of working at McDonald’s restaurants. We and our franchisees also continue to be impacted by increasingly complex U.S. and international laws and regulations affecting our respective workforces. These laws and regulations are increasingly focused on, and in certain cases impose requirements with respect to, employment matters such as wages and hours, healthcare, immigration, retirement and other employee benefits and workplace practices. Such laws and regulations can expose us and our franchisees to increased costs and other effects of compliance, including potential liability, and all such labor and compliance costs could have a negative impact on our Company-owned and operated margins and franchisee profitability.

Our potential exposure to reputational and other harm regarding our workplace practices or conditions or those of our independent franchisees or suppliers, including those giving rise to claims of harassment or discrimination (or perceptions thereof) or workplace safety, could have a negative impact on consumer perceptions of us and our business. Additionally, economic action, such as boycotts, protests, work stoppages or campaigns by labor organizations, could adversely affect us (including our ability to attract, recruit, develop, motivate and retain talent) or our franchisees and suppliers, whose performance may have a significant impact on our results.

Effective succession planning is important to our continued success.

Effective succession planning for management is important to our long-term success. Failure to effectively attract, recruit, develop, motivate and retain qualified key personnel, or to execute smooth personnel transitions, could disrupt our business and adversely affect our results.

Food safety concerns may have an adverse effect on our business.

Food safety concerns have had and may in the future have an adverse effect on our business. Our ability to increase sales and profits depends on our System’s ability to meet expectations for safe food and on our ability to manage the potential impact on McDonald’s of food-borne illnesses and food or product safety issues that may arise in the future, including in the supply chain, restaurants or delivery. Food safety is a top priority, and we dedicate substantial resources aimed at ensuring that our customers enjoy safe food products, including as our menu and service model evolve. However, food safety events, including instances of food-borne illness, have occurred within the food industry and our System from time to time and could occur in the future. Instances of food tampering, food contamination or food-borne illness, whether actual or perceived, could adversely affect our brand, reputation and financial results.

If we do not effectively manage our real estate portfolio, our operating results may be negatively impacted.

We have significant real estate operations, primarily in connection with our restaurant business. We generally own or secure a long-term lease on the land and building for conventional franchised and Company-owned and operated restaurant sites. We seek to identify and develop restaurant locations that offer convenience to customers and long-term sales and profit potential. As we generally secure long-term real estate interests for our restaurants, we have limited flexibility to quickly alter our real estate portfolio. The competitive business landscape continues to evolve in light of changing business trends, consumer preferences, trade area demographics, consumer use of digital, delivery and drive thru, local competitive positions and other economic factors. If our restaurants are not located in desirable locations, or if we do not evolve in response to these factors, it could adversely affect Systemwide sales and profitability.

Our real estate values and the costs associated with our real estate operations are also impacted by a variety of other factors, including governmental regulations, insurance, zoning, tax and eminent domain laws, interest rate levels, the cost of financing, natural disasters, acts of war, terrorism or other hostilities, or other factors beyond our control. A significant change in real estate values, or an increase in costs as a result of any of these factors, could adversely affect our operating results.

Information technology system failures or interruptions, breaches of network security, or misuse of technology tools may impact our operations or cause reputational harm.

We are increasingly reliant upon technology systems, such as point-of-sale, that support our business operations, including our digital and delivery solutions, and technologies that facilitate communication and collaboration with affiliated entities, customers, employees, franchisees, suppliers, service providers or other independent third parties, whether developed and maintained by us or provided by third parties. Any failure or interruption of these systems could significantly impact our or our franchisees’ operations, or our customers’ experiences and perceptions.

Security incidents and breaches have occurred from time to time and may occur in the future involving our systems, the systems of the parties with whom we communicate or collaborate (including franchisees) or the systems of third-party providers. Additionally, cybersecurity threats continue to become more sophisticated, including AI-enabled attacks and deepfake technology. Incidents may include unauthorized access, phishing attacks, account takeovers, denial of service, computer viruses, deepfakes and other malicious uses of artificial intelligence, introduction of malware or ransomware, other disruptive problems caused by hackers or unintentional events. Certain of these technology systems contain personal, confidential, financial and other information of our customers, employees, franchisees and their employees, suppliers and other third parties, as well as financial, proprietary and other confidential information related to our business. Despite response procedures and measures in place in the event an incident occurs, an event could result in disruptions, shutdowns, or a security breach including the theft or unauthorized disclosure of certain of the above-described information. The actual or alleged occurrence of any of these types of incidents could result in mitigation costs, reputational damage, adverse publicity, loss of consumer confidence, reduced sales and profits, complications in executing our growth initiatives and regulatory and legal risk, including administrative fines, criminal or civil penalties or civil liabilities.

Despite the implementation of business continuity measures, any of these technology systems could become vulnerable to damage, disability or failures due to fire, power loss, telecommunications failure or other catastrophic events. Certain technology systems may also become vulnerable, unreliable or inefficient in cases where technology vendors limit or terminate product support and/or maintenance. Our increasing reliance on third-party systems also subjects us to risks faced by those third-party businesses, including operational, security and credit risks. Further, the technology systems of third parties upon which we rely to conduct our business could be compromised in a manner that adversely affects us and our technology systems, information and business continuity. If technology systems were to fail or otherwise be unavailable, or if business continuity or disaster recovery plans were not effective, and we were unable to recover in a timely manner, we could experience an interruption in our or our franchisees’ operations. While we maintain insurance coverage designed to address certain aspects of cybersecurity risks, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise.

In addition, the AI tools we are incorporating into certain aspects of our business may not generate the intended efficiencies, may increase our exposure to risks (both known and unknown), and could adversely impact our business results. These risks include potential operational disruptions, data integrity issues, and unintended consequences from algorithmic decision-making. Further, emerging global and U.S. regulations governing AI use – including requirements for responsible use, transparency, bias mitigation, accountability, and explainability – may impose significant compliance obligations and increase reputational risk. Failure to comply with these standards or to effectively manage associated risks, including ethical considerations such as fairness, non-discrimination, and responsible deployment, could result in regulatory penalties, litigation, operational setbacks, or adverse brand perceptions.

LEGAL AND REGULATORY

Increasing regulatory and legal complexity may adversely affect our business and financial results.

Our regulatory and legal environment worldwide exposes us to complex compliance, litigation and similar risks that could affect our operations and results in material ways. Many of our markets are subject to increasing, conflicting and highly prescriptive legislative, regulatory or administrative developments and enforcement priorities involving, among other matters, restaurant operations, product packaging and extended producer responsibility, marketing, use of information technology systems, the nutritional and allergen content and safety of our food and other products, labeling and other disclosure practices. Compliance efforts with those regulations may be affected by ordinary variations in food preparation among our own restaurants and the need to rely on the accuracy and completeness of information from third-party suppliers. We also are subject to increasing public focus, including by governmental and non-governmental organizations, on environmental, social responsibility and corporate governance matters. Our success depends in part on our ability to manage the impact of regulations and other initiatives that can affect our business plans and operations, which have increased and may continue to increase our costs of doing business and exposure to litigation, governmental investigations or other proceedings.

We are also subject to legal proceedings that may adversely affect our business, including, but not limited to, class actions, administrative proceedings, government investigations and proceedings, shareholder proceedings, employment and personal injury claims, landlord/tenant disputes, supplier-related disputes, and claims by current or former franchisees. Regardless of whether claims against us are valid or whether we are found to be liable, claims may be expensive to defend and may divert management’s attention away from operations.

Litigation, legislative and regulatory action concerning our relationship with franchisees and the legal distinction between our franchisees and us for employment law or other purposes, if determined adversely, could challenge our franchise business model, increase costs, negatively impact our business operations and the business prospects of our franchisees and subject us to incremental liability for their actions. Similarly, although our commercial relationships with our suppliers remain independent, there may be attempts to challenge that independence, which, if determined adversely, could also increase costs, negatively impact the business prospects of our suppliers, and subject us to incremental liability for their actions.

Our results could also be affected by the following:

•the relative level of our defense costs, which vary from period to period depending on the number, nature and procedural status of pending proceedings;

•the cost and other effects of settlements, judgments or consent decrees, which may require us to make disclosures or take other actions that may affect perceptions of our brand and products; and

•adverse results of pending or future litigation, including litigation challenging the composition and preparation of our products, or the appropriateness or accuracy of our marketing or other communication practices.

A judgment significantly in excess of any applicable insurance coverage or third-party indemnity could materially adversely affect our financial condition or results of operations. Further, adverse publicity resulting from claims may hurt our business. If we are unable to effectively manage the risks associated with our complex regulatory and legal environment, it could have a material adverse effect on our business and financial condition.

Changes in tax laws and unanticipated tax liabilities could adversely affect the taxes we pay and our profitability.

We are subject to income and other taxes in the U.S. and foreign jurisdictions, and our operations, plans and results are affected by tax and other initiatives around the world. In particular, we are affected by the impact of changes to tax laws or policy or related authoritative interpretations. We are also impacted by settlements of pending or any future adjustments proposed by taxing and governmental authorities inside and outside of the U.S. in connection with our tax audits, all of which will depend on their timing, nature and scope. Any significant increases in income tax rates, changes in income tax laws or unfavorable resolution of tax matters could have a material adverse impact on our financial results.

Changes in accounting standards or the recognition of impairment or other charges may adversely affect our future operations and results.

New accounting standards or changes in financial reporting requirements, accounting principles or practices, including with respect to our critical accounting estimates, could adversely affect our future results. We may also be affected by the nature and timing of decisions about underperforming markets or assets, including decisions that result in impairment or other charges that reduce our earnings.

In assessing the recoverability of our long-lived assets, we consider changes in economic conditions and make assumptions regarding estimated future cash flows and other factors. These estimates are highly subjective and can be significantly impacted by many factors such as global and local business and economic conditions, operating costs, inflation, interest rate levels, competition, consumer and demographic trends and our restructuring activities. If our estimates or underlying assumptions change in the future, we may be required to record impairment charges. Any such changes could have a significant adverse effect on our reported results for the affected periods.

If we fail to comply with privacy and data protection laws, we could be subject to legal proceedings and penalties, which could negatively affect our financial results or brand perceptions.

We are subject to legal and compliance risks and associated liability related to privacy and data protection requirements, including those associated with our technology-related services and platforms made available to business partners, customers, employees, franchisees or other third parties. An increasing number of our markets have enacted privacy and data protection requirements (including the European Union’s General Data Protection Regulation and various U.S. state-level laws), and further requirements are likely to be proposed or enacted in the future. Failure to comply with these privacy and data protection laws could result in legal proceedings and substantial administrative fines, criminal or civil penalties or civil liabilities and materially adversely impact our financial results or brand perceptions. Additionally, as we expand digital engagement, data collection and personalization through AI, we face new and heightened risks under laws and regulations, including U.S. state-level regulations and the EU AI Act. Non-compliance or misuse of personal data could lead to significant fines, litigation, and reputational harm.

MACROECONOMIC AND MARKET CONDITIONS

Unfavorable general economic conditions could adversely affect our business and financial results.

Our results of operations are substantially affected by economic conditions, including inflationary pressures, which can vary significantly by market and can impact consumer disposable income levels and spending habits. Economic conditions can be impacted by a variety of factors, including hostilities, epidemics, pandemics and actions taken by governments to manage national and international economic matters, whether through austerity, stimulus measures or trade measures, and initiatives intended to control wages, unemployment, credit availability, inflation, taxation and other economic drivers. Sustained adverse economic conditions or periodic adverse changes in economic conditions put pressure on our operating performance and business continuity disruption planning, and our business and financial results may suffer as a result.

Our results of operations are also affected by fluctuations in currency exchange rates, and unfavorable currency fluctuations could adversely affect reported earnings.

Health epidemics or pandemics could adversely affect our business and financial results.

Health epidemics or pandemics have in the past and may in the future impact macroeconomic conditions, consumer behavior, labor availability and supply chain management, as well as local operations in impacted markets, all of which can adversely affect our business, financial results and outlook. Governmental responses to health epidemics or pandemics, including operational restrictions and temporary restaurant closures, can also affect the foregoing items and adversely affect our business and financial results. The duration and scope of a health epidemic or pandemic can be difficult to predict and depends on many factors, including the emergence of new variants and the availability, acceptance and effectiveness of preventative measures. A health epidemic or pandemic may also heighten other risks disclosed in these Risk Factors, including, but not limited to, those related to the availability and costs of labor and commodities, supply chain interruptions, consumer behavior, and consumer perceptions of our brand and industry.

Changes in commodity and other operating costs could adversely affect our results of operations.

The profitability of our Company-owned and operated restaurants depends in part on our ability to anticipate and react to changes in commodity costs, including food, paper, supplies, fuel and utilities, as well as distribution and other operating costs, including labor. Volatility in certain commodity prices and fluctuations in labor costs have adversely affected and in the future could adversely affect our operating results by impacting restaurant profitability. The commodity markets for some of the ingredients we use, such as beef and chicken, are particularly volatile due to factors such as seasonal shifts, climate conditions, industry demand and other macroeconomic conditions, international commodity markets, food safety concerns, product recalls, government regulation, and acts of war, terrorism or other hostilities, all of which are beyond our control and, in many instances, unpredictable. Our System can only partially address future price risk through hedging and other activities, and therefore increases in commodity costs could have an adverse impact on our profitability.

A decrease in our credit ratings or an increase in our funding costs could adversely affect our profitability.

Our credit ratings may be negatively affected by our results of operations or changes in our debt levels. As a result, our interest expense, the availability of acceptable counterparties, our ability to obtain funding on favorable terms, our collateral requirements and our operating or financial flexibility could all be negatively affected, especially if lenders were to impose new operating or financial covenants.

Our operations may also be impacted by regulations affecting capital flows, financial markets or financial institutions, which can limit our ability to manage and deploy our liquidity or increase our funding costs. Any such events could have a material adverse effect on our business and financial condition.

The trading volatility and price of our common stock may be adversely affected by many factors.

Many factors affect the trading volatility and price of our common stock in addition to our operating results and prospects. These factors, many of which are beyond our control, include the following:

•the unpredictable nature of global economic and market conditions;

•governmental action or inaction in light of key indicators of economic activity or events that can significantly influence financial markets, particularly in the U.S., which is the principal trading market for our common stock, and media reports and commentary about economic, trade or other matters, even when the matter in question does not directly relate to our business;

•trading activity in our common stock, in derivative instruments with respect to our common stock or in our debt securities, which can be affected by: market commentary (including commentary that may be unreliable or incomplete); unauthorized disclosures about our performance, plans or expectations about our business; our actual performance and creditworthiness; investor confidence, driven in part by expectations about our performance; actions by shareholders and others seeking to influence our business strategies; portfolio transactions in our common stock by significant shareholders; and trading activity that results from the ordinary course rebalancing of stock indices in which McDonald’s may be included, such as the S&P 500 Index and the Dow Jones Industrial Average;

•the impact of our stock repurchase program or dividend rate; and

•the impact of corporate actions, including changes to our corporate structure, and market and third-party perceptions and assessments of such actions, including those we may take from time to time as we implement our business strategies in light of changing business, legal and tax considerations.

Our business is subject to an increasing focus on environmental and social impact matters.

In recent years, there has been an increasing focus by stakeholders – including employees, franchisees, customers, suppliers, governmental and non-governmental organizations and investors – on environmental and social impact matters. A failure, whether real or perceived, to address environmental and social impact matters or to achieve progress on our environmental and social impact initiatives as intended, could adversely affect our business, including by heightening other risks disclosed in these Risk Factors, such as those related to consumer behavior, brand perception, labor availability and costs, supply chain interruptions, commodity costs, and legal and regulatory complexity. Stakeholder expectations may vary significantly, so our taking a position, whether real or perceived, on environmental and social impact, public policy, geopolitical and similar matters could also adversely impact our business. Increasing scrutiny of such initiatives, including via legislative, regulatory or administrative developments and enforcement priorities, may create compliance challenges, reputational risks, and potential litigation exposure.

The standards we set for ourselves regarding environmental and social impact matters, and our ability to meet such standards, may also impact our business. For example, we are working to manage risks and costs to our System related to climate change, greenhouse gases, and diminishing energy and water resources, and we have announced initiatives relating to, among other things, climate action, sustainability, and responsible sourcing. In addition, we are engaging in social impact initiatives, including community engagement, philanthropy, and our commitment to inclusion. We have faced increased scrutiny related to reporting on and achieving these initiatives, as well as continued public focus on similar matters, such as packaging and waste, animal health and welfare, deforestation and land use. We have also experienced increased pressure from stakeholders to provide expanded disclosure and establish additional commitments, targets or goals, and take actions to meet them, which could expose us to additional market, operational, execution and reputational costs and risks. These additional commitments may or may not overlap, and may in some cases conflict, with new disclosure required in these areas. Moreover, addressing environmental and social impact matters requires Systemwide as well as third party coordination and alignment, over which we do not have complete control and which may be unpredictable. The standards by which certain environmental and social impact matters are measured are also evolving and subject to assumptions that could change over time.

Events such as severe weather conditions, natural disasters, hostilities, social and geopolitical unrest and climate change, among others, can adversely affect our results and prospects.

Severe weather conditions, natural disasters, acts of war, terrorism or other hostilities, social and geopolitical unrest, including anti-American sentiment, and climate change (or expectations or uncertainty about them) can adversely affect consumer confidence levels and behavior, supply availability and costs and local operations, including temporary restaurant closures and delayed new restaurant openings, in impacted markets, all of which can affect our results and prospects. Climate change may also increase the frequency and severity of weather-related events and natural disasters. Our receipt of proceeds under any insurance we maintain with respect to some of these risks may be delayed or the proceeds may be insufficient to cover our losses fully.

Source: View Original Filing on SEC EDGAR

FAQ

How did McDonald’s (MCD) perform financially in the fourth quarter of 2025?

McDonald’s delivered strong Q4 2025 results with global comparable sales up 5.7% and revenues rising 10% to $7,009 million. Operating income increased 10% to $3,156 million and diluted EPS grew 8% to $3.03, reflecting broad-based segment strength.

What were McDonald’s (MCD) full year 2025 revenue and earnings?

For 2025, McDonald’s generated revenues of $26,885 million, up 4% year over year. Net income was $8,563 million, a 4% increase, and diluted earnings per share rose 5% to $11.95. Systemwide sales increased 7% to approximately $129.7 billion.

How fast are McDonald’s (MCD) loyalty and Systemwide sales growing?

In 2025, global Systemwide sales increased 7% to about $129.7 billion. Across 70 loyalty markets, Systemwide sales to loyalty members grew 20% to nearly $37 billion, with 90‑day active loyalty users up 19% to nearly 210 million as of year‑end.

What margins and operating income did McDonald’s (MCD) report for 2025?

McDonald’s reported 2025 operating income of $12,393 million, up 6% from 2024. The operating margin was 46.1%. Excluding restructuring and related items, non‑GAAP operating income was $12,621 million, and higher sales-driven franchised margins were the primary driver of growth.

How much cash flow and shareholder returns did McDonald’s (MCD) generate in 2025?

In 2025, McDonald’s produced $10,551 million of cash from operations and $7,186 million of free cash flow. The company paid $5.1 billion in dividends, repurchased 6.7 million shares for $2.0 billion, and achieved a free cash flow conversion rate of 84%.

What dividend changes and capital plans has McDonald’s (MCD) announced?

McDonald’s declared a 5% increase in its quarterly cash dividend to $1.86 per share, first payable on December 15, 2025. For 2026, it plans $3.7–$3.9 billion in capital expenditures, with approximately 2,600 restaurant openings and about 2,100 net additions globally.

What 2026 outlook did McDonald’s (MCD) provide on margins and taxes?

For 2026, McDonald’s expects operating margin in the mid‑to‑high 40% range and net restaurant unit expansion to add about 2.5% to Systemwide sales growth in constant currencies. The company also projects an effective income tax rate between 21% and 23% for the year.

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McDonald’s (NYSE: MCD) grows 2025 sales, boosts dividend and cash returns

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How did McDonald’s (MCD) perform financially in the fourth quarter of 2025?

What were McDonald’s (MCD) full year 2025 revenue and earnings?

How fast are McDonald’s (MCD) loyalty and Systemwide sales growing?

What margins and operating income did McDonald’s (MCD) report for 2025?

How much cash flow and shareholder returns did McDonald’s (MCD) generate in 2025?

What dividend changes and capital plans has McDonald’s (MCD) announced?

What 2026 outlook did McDonald’s (MCD) provide on margins and taxes?

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McDonald’s (NYSE: MCD) grows 2025 sales, boosts dividend and cash returns

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8-K Event Classification

FAQ

How did McDonald’s (MCD) perform financially in the fourth quarter of 2025?

What were McDonald’s (MCD) full year 2025 revenue and earnings?

How fast are McDonald’s (MCD) loyalty and Systemwide sales growing?

What margins and operating income did McDonald’s (MCD) report for 2025?

How much cash flow and shareholder returns did McDonald’s (MCD) generate in 2025?

What dividend changes and capital plans has McDonald’s (MCD) announced?

What 2026 outlook did McDonald’s (MCD) provide on margins and taxes?

Filing Exhibits & Attachments

Press Releases

Other Documents

NYSE:MCD

MCD Rankings

MCD Latest News

MCD Latest SEC Filings

MCD Stock Data