MCDONALDS CORP (MCD)
SIC breadcrumb: Retail Trade > Eating And Drinking Places > SIC 5812 Retail-Eating Places
SEC company page: https://www.sec.gov/edgar/browse/?CIK=63908. Latest filing source: 0000063908-26-000035.
Informational only. Descriptive public-record data — not a rating, forecast, or investment advice. See Disclaimer.
At a glance
- Revenue
- 26,885,000,000 USD verified
- Net income
- 8,563,000,000 USD verified
- Assets
- 59,515,000,000 USD verified
- Free cash flow
- 7,186,000,000 USD computed
- Net margin
- 31.85% computed
- Operating margin
- 46.10% computed
- Revenue YoY
- +3.72% computed
Peer & cluster context
Peer comparisons including MCD
- Restaurants and food-service operators: peer review · market-risk page
Peer percentile fingerprint
Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC industry 5812 Retail-Eating Places, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 26,885,000,000 | USD | 2025 | 2026-02-24 |
| Net income | 8,563,000,000 | USD | 2025 | 2026-02-24 |
| Assets | 59,515,000,000 | USD | 2025 | 2026-02-24 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-24. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000063908.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 24,621,900,000 | 22,820,400,000 | 21,257,900,000 | 21,364,400,000 | 19,207,800,000 | 23,222,900,000 | 23,183,000,000 | 25,494,000,000 | 25,920,000,000 | 26,885,000,000 |
| Net income | 4,686,500,000 | 5,192,300,000 | 5,924,300,000 | 6,025,400,000 | 4,730,500,000 | 7,545,200,000 | 6,177,000,000 | 8,469,000,000 | 8,223,000,000 | 8,563,000,000 |
| Operating income | 7,744,500,000 | 9,552,700,000 | 8,822,600,000 | 9,069,800,000 | 7,324,000,000 | 10,356,000,000 | 9,371,000,000 | 11,647,000,000 | 11,712,000,000 | 12,393,000,000 |
| Diluted EPS | 5.44 | 6.37 | 7.54 | 7.88 | 6.31 | 10.04 | 8.33 | 11.56 | 11.39 | 11.95 |
| Operating cash flow | 6,059,600,000 | 5,551,200,000 | 6,966,700,000 | 8,122,100,000 | 6,265,200,000 | 9,141,500,000 | 7,387,000,000 | 9,612,000,000 | 9,447,000,000 | 10,551,000,000 |
| Capital expenditures | 1,821,100,000 | 1,853,700,000 | 2,741,700,000 | 2,393,700,000 | 1,640,800,000 | 2,040,000,000 | 1,899,000,000 | 2,357,000,000 | 2,775,000,000 | 3,365,000,000 |
| Dividends paid | 3,058,200,000 | 3,089,200,000 | 3,255,900,000 | 3,581,900,000 | 3,752,900,000 | 3,918,600,000 | 4,168,000,000 | 4,533,000,000 | 4,870,000,000 | 5,115,000,000 |
| Share buybacks | 11,171,000,000 | 4,685,700,000 | 5,207,700,000 | 4,976,200,000 | 907,800,000 | 845,500,000 | 3,896,000,000 | 3,054,000,000 | 2,824,000,000 | 2,056,000,000 |
| Assets | 31,023,900,000 | 33,803,700,000 | 32,811,200,000 | 47,510,800,000 | 52,626,800,000 | 53,854,300,000 | 50,436,000,000 | 56,147,000,000 | 55,182,000,000 | 59,515,000,000 |
| Stockholders' equity | -2,204,300,000 | -3,268,000,000 | -6,258,400,000 | -8,210,300,000 | -7,824,900,000 | -4,601,000,000 | -6,003,000,000 | -4,707,000,000 | -3,797,000,000 | -1,791,000,000 |
| Cash and cash equivalents | 1,223,400,000 | 2,463,800,000 | 866,000,000 | 898,500,000 | 3,449,100,000 | 4,709,200,000 | 2,583,800,000 | 4,579,000,000 | 1,085,000,000 | 774,000,000 |
| Free cash flow | 4,238,500,000 | 3,697,500,000 | 4,225,000,000 | 5,728,400,000 | 4,624,400,000 | 7,101,500,000 | 5,488,000,000 | 7,255,000,000 | 6,672,000,000 | 7,186,000,000 |
Ratios
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Net margin | 19.03% | 22.75% | 27.87% | 28.20% | 24.63% | 32.49% | 26.64% | 33.22% | 31.72% | 31.85% |
| Operating margin | 31.45% | 41.86% | 41.50% | 42.45% | 38.13% | 44.59% | 40.42% | 45.69% | 45.19% | 46.10% |
| Return on assets | 15.11% | 15.36% | 18.06% | 12.68% | 8.99% | 14.01% | 12.25% | 15.08% | 14.90% | 14.39% |
| Current ratio | 1.40 | 1.84 | 1.36 | 0.98 | 1.01 | 1.78 | 1.43 | 1.16 | 1.19 | 0.95 |
Industry Peer Context
Net margin peer context
Operating margin peer context
ROA peer context
Financial Bridges
Free cash flow = operating cash flow - capital expenditures
Figure provenance: SEC companyfacts FY 2025. Operating cash flow: accession 0000063908-26-000035; concept NetCashProvidedByUsedInOperatingActivities; source concepts us-gaap:NetCashProvidedByUsedInOperatingActivities | Capital expenditures: accession 0000063908-26-000035; concept PaymentsToAcquirePropertyPlantAndEquipment; source concepts us-gaap:PaymentsToAcquirePropertyPlantAndEquipment | Free cash flow: accession 0000063908-26-000035; concept NetCashProvidedByUsedInOperatingActivities - PaymentsToAcquirePropertyPlantAndEquipment; source concepts us-gaap:NetCashProvidedByUsedInOperatingActivities; us-gaap:PaymentsToAcquirePropertyPlantAndEquipment
Financial Charts
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0000063908-26-000035; filed 2026-02-24. Concept: Revenues. Source concepts: us-gaap:Revenues.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0000063908-26-000035; filed 2026-02-24. Concept: NetIncomeLoss. Source concepts: us-gaap:NetIncomeLoss.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0000063908-26-000035; filed 2026-02-24. Concept: OperatingIncomeLoss. Source concepts: us-gaap:OperatingIncomeLoss.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0000063908-26-000035; filed 2026-02-24. Concept: EarningsPerShareDiluted. Source concepts: us-gaap:EarningsPerShareDiluted.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0000063908-26-000035; filed 2026-02-24. Concept: NetCashProvidedByUsedInOperatingActivities. Source concepts: us-gaap:NetCashProvidedByUsedInOperatingActivities.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0000063908-26-000035; filed 2026-02-24. Concept: PaymentsToAcquirePropertyPlantAndEquipment. Source concepts: us-gaap:PaymentsToAcquirePropertyPlantAndEquipment.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0000063908-26-000035; filed 2026-02-24. Concept: PaymentsOfDividendsCommonStock. Source concepts: us-gaap:PaymentsOfDividendsCommonStock.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0000063908-26-000035; filed 2026-02-24. Concept: PaymentsForRepurchaseOfCommonStock. Source concepts: us-gaap:PaymentsForRepurchaseOfCommonStock.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0000063908-26-000035; filed 2026-02-24. Concept: Assets. Source concepts: us-gaap:Assets.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0000063908-26-000035; filed 2026-02-24. Concept: StockholdersEquity. Source concepts: us-gaap:StockholdersEquity.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0000063908-26-000035; filed 2026-02-24. Concept: CashAndCashEquivalentsAtCarryingValue. Source concepts: us-gaap:CashAndCashEquivalentsAtCarryingValue.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0000063908-26-000035; filed 2026-02-24. Concept: NetCashProvidedByUsedInOperatingActivities - PaymentsToAcquirePropertyPlantAndEquipment. Source concepts: us-gaap:NetCashProvidedByUsedInOperatingActivities; us-gaap:PaymentsToAcquirePropertyPlantAndEquipment.
As-reported value updates
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-08-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000063908.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2022-Q3 | 2022-09-30 | 2.68 | reported discrete quarter | ||
| 2023-Q1 | 2023-03-31 | 2.45 | reported discrete quarter | ||
| 2023-Q2 | 2023-06-30 | 3.15 | reported discrete quarter | ||
| 2023-Q3 | 2023-09-30 | 6,692,200,000 | 2,317,100,000 | 3.17 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 6,406,200,000 | 2,039,000,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-03-31 | 6,169,000,000 | 1,929,000,000 | 2.66 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 6,490,000,000 | 2,022,000,000 | 2.80 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 6,873,000,000 | 2,255,000,000 | 3.13 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 6,388,000,000 | 2,016,000,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-31 | 5,956,000,000 | 1,868,000,000 | 2.60 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 6,843,000,000 | 2,253,000,000 | 3.14 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 7,078,000,000 | 2,278,000,000 | 3.18 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 7,009,000,000 | 2,164,000,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-03-31 | 6,517,000,000 | 1,983,000,000 | 2.78 | reported discrete quarter |
| 2026-Q2 | 2026-06-30 | 7,099,000,000 | 2,362,000,000 | 3.32 | reported discrete quarter |
Quarterly Charts
Figure provenance: SEC companyfacts. Latest point: FY 2026 ended 2026-06-30; accession 0000063908-26-000073; filed 2026-08-07. Concept: Revenues. Source concepts: us-gaap:Revenues.
Figure provenance: SEC companyfacts. Latest point: FY 2026 ended 2026-06-30; accession 0000063908-26-000073; filed 2026-08-07. Concept: NetIncomeLoss. Source concepts: us-gaap:NetIncomeLoss.
Figure provenance: SEC companyfacts. Latest point: FY 2026 ended 2026-06-30; accession 0000063908-26-000073; filed 2026-08-07. Concept: EarningsPerShareDiluted. Source concepts: us-gaap:EarningsPerShareDiluted.
Latest quarter (10-Q)
Latest 10-Q source: 0000063908-26-000073.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Basis of Presentation
This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the accompanying Condensed Consolidated Financial Statements and the notes thereto, and the audited Consolidated Financial Statements and notes thereto included in our 2025 Annual Report on Form 10-K.
Certain columns and rows in financial tables within MD&A may not add due to rounding. Percentages have been calculated from the underlying whole-dollar amounts for all periods presented.
Overview
The Company franchises and owns and operates McDonald's restaurants, which serve a locally relevant menu of quality food and beverages in communities across more than 100 countries. Of the 46,028 McDonald's restaurants at June 30, 2026, approximately 95% were franchised.
The Company's reporting segments are aligned with its strategic priorities and reflect how management reviews and evaluates operating performance. Significant reportable segments include the United States ("U.S.") and International Operated Markets. In addition, the International Developmental Licensed Markets & Corporate includes the results of over 75 countries as well as Corporate activities.
McDonald's franchised restaurants are owned and operated under one of the following structures - conventional franchise, developmental license or affiliate. The optimal ownership structure for an individual restaurant, trading area or market (country) is based on a variety of factors, including the availability of individuals with entrepreneurial experience and financial resources, as well as the local legal and regulatory environment in critical areas such as property ownership and franchising. The business relationship between the Company and its independent franchisees is supported by adhering to standards and policies, including McDonald's Global Brand Standards, and is of fundamental importance to overall performance and to protecting the McDonald’s brand.
The Company is primarily a franchisor and believes franchising is paramount to delivering great-tasting food, locally relevant customer experiences and driving profitability. Franchising enables an individual to be their own employer and maintain control over all employment related matters, marketing and pricing decisions, while also benefiting from the strength of McDonald's global brand, operating system and financial resources.
Directly operating McDonald's restaurants contributes significantly to the Company's ability to act as a credible franchisor. One of the strengths of the franchising model is that the expertise from Company-owned and operated restaurants allows McDonald's to improve the operations and success of all restaurants, and allows innovations from franchisees to be tested and, when viable, efficiently implemented across relevant restaurants. Having Company-owned and operated restaurants provides Company personnel with a venue for restaurant operations training experience. In addition, in our Company-owned and operated restaurants, and in collaboration with franchisees, the Company is able to further develop and refine operating standards, marketing concepts and product and pricing strategies.
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. Fees vary by type of site, amount of Company investment, if any, and local business conditions. These fees, along with occupancy and operating rights, are stipulated in franchise/license agreements that generally have 20-year terms. The Company's Other revenues are 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.
Conventional Franchise
Under a conventional franchise arrangement, the Company generally owns or secures a long-term lease on the land and building for the restaurant location and the franchisee pays for equipment, signs, seating and décor. The Company believes that ownership of real estate, combined with the co-investment by franchisees, enables it to achieve restaurant performance levels that are among the highest in the industry.
Franchisees are responsible for reinvesting capital in their businesses over time. In addition, to accelerate implementation of certain initiatives, the Company may co-invest with franchisees to fund improvements to their restaurants or operating systems. These investments, developed in collaboration with franchisees, are designed to cater to consumer preferences, improve local business performance and increase the value of the McDonald's brand through the development of modernized, more attractive and higher revenue generating restaurants.
The Company requires franchisees to meet rigorous standards and generally does not work with passive investors. The business relationship with franchisees is designed to facilitate consistency and high quality at all McDonald’s restaurants. Conventional franchisees contribute to the Company's revenue, primarily through the payment of rent and royalties based upon a percent of sales, with specified minimum rent payments, along with initial fees paid upon the opening of a new restaurant or grant of a new franchise. 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.
16
Table of Contents
Developmental License or Affiliate
Under a developmental license or affiliate arrangement, licensees are responsible for operating and managing their businesses, providing capital (including the real estate interest) and developing and opening new restaurants. The Company generally does not invest any restaurant capital under a developmental license or affiliate arrangement, and it receives a royalty based on a percent of sales, and generally receives initial fees upon the opening of a new restaurant or grant of a new license.
While developmental license and affiliate arrangements are largely the same, affiliate arrangements are used in a limited number of foreign markets (primarily China and Japan) within the International Developmental Licensed Markets, as well as a limited number of individual restaurants within the International Operated Markets, where the Company also has an equity investment and records its share of net results in equity in earnings of unconsolidated affiliates.
17
Table of Contents
Strategic Direction
Introduced in 2020 and refreshed in 2023, the Company’s Accelerating the Arches strategy has been built on three growth pillars: Maximize our Marketing, Commit to the Core and Double Down on the 4D’s (Digital, Delivery, Drive Thru and Restaurant Development). Through these growth pillars, the Company has invested in culturally relevant marketing, focused on its iconic products, expanded its digital ecosystem and delivery capabilities, enhanced its drive thru advantage and accelerated restaurant development.
Building on the foundation established by Accelerating the Arches, in June 2026, the Company introduced McDonald’s NEXT (the “NEXT Strategy”), its strategy to unlock the next era of growth and productivity. McDonald's NEXT is how the Company will meet customers’ expectations for great value, great tasting food, great hospitality, convenience and affordability by elevating taste and quality, co-creating with our fans, unlocking better customer and restaurant experiences, and redefining hospitality.
Purpose, Mission and Values
As was true with the Accelerating the Arches strategy, at the heart of the NEXT Strategy are the Company’s purpose, mission and values which underpin our success.
Through its size and scale, the Company embraces and prioritizes its role and commitment to the communities in which it operates through its purpose to feed and foster communities, and its mission to make delicious feel-good moments easy for everyone. The Company is guided by five core values that define who it is and how it runs the business across the three-legged stool of McDonald's franchisees, suppliers and employees:
1.Serve - We put our guests and people first;
2.Inclusion - We open our doors to everyone;
3.Integrity - We do the right thing;
4.Community - We are good neighbors; and
5.Family - We get better together.
The Company believes that its people, all around the world, set it apart and bring these values to life daily.
The NEXT Strategy continues to reflect and advance the Company’s purpose, mission and values, and is comprised of four key pillars designed around one simple ambition: to be more customers’ first choice.
Growth Pillars
•Menu NEXT is focused on elevating taste and quality across its menu while continuing to strengthen the Company’s position in its core categories: beef, chicken and beverages. Through menu innovation and operational excellence, the Company aims to deliver food that customers crave and create experiences that drive guest count growth.
•Consumer NEXT is focused on creating more personal, relevant and engaging experiences that strengthen customers’ connection to the McDonald’s brand and encourage more visits. The Company aims to deepen customer relationships by combining the power of its brand, the influence of its fandom, the breadth of its customer insights and the scale of its digital capabilities to drive demand.
•Restaurant NEXT is intended to improve restaurant efficiency with AI-enabled operating systems that reduce complexity and enable restaurant teams to serve customers great tasting food more effectively. The Company is focused on improving customer and restaurant experiences through technology, operational simplification, and holistic restaurant design that will improve operations, increase capacity and enhance the experience for crew and customers.
•People NEXT makes excellence in execution for taste, quality, and hospitality the standard that restaurants are taught, measured on and coached to deliver. This includes equipping restaurant teams with improved tools, support and smarter ways of working to deliver exceptional hospitality, better serve customers, and strengthen the overall restaurant performance and resulting guest experience.
The NEXT Strategy is aligned with the Company’s capital allocation philosophy of (i) investing in opportunities to grow the business and drive strong returns, including capital expenditures and investments in technology and other capabilities, (ii) prioritizing its dividend, and (iii) repurchasing shares with remaining free cash flow over time.
The Company believes the size, scale, agility and the power of the McDonald’s brand positions it well to execute on the NEXT Strategy and create long-term value for customers, franchisees and shareholders.
18
Table of Contents
Second Quarter and Six Months 2026 Financial Performance
Global comparable sales increased 1.3% for the quarter and 2.5% for the six months.
•U.S. comparable sales increased 0.8% for the quarter and 2.3% for the six months. Comparable sales results for both periods were primarily driven by positive check growth, including favorable product mix, partly offset by negative comparable guest counts.
•International Operated Markets comparable sales increased 1.5% for the quarter and 2.6% for the six months. Most markets reflected positive comparable sales for both periods, led by Germany, Australia and the U.K., partly offset by France.
•International Developmental Licensed Markets comparable sales increased 1.9% for the quarter and 2.6% for the six months. Positive comparable sales for both periods were led by Japan, with all geographic r
[Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A (excerpt)
Latest 10-K Item 7 source: 0000063908-26-000035. The complete FY 2025 MD&A is published at /company/MCD/mda/fy2025/.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MANAGEMENT'S VIEW OF THE BUSINESS
In analyzing business trends, management reviews results on a constant currency basis and considers a variety of performance and financial measures, some of which are considered to be non-GAAP, including comparable sales and guest count growth, Systemwide sales growth, after-tax return on invested capital from continuing operations, free cash flow and free cash flow conversion rate, as described below. Management believes these measures are important in understanding the financial performance of the Company.
•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.
•The Company’s after-tax return on invested capital ("ROIC") from continuing operations is a metric that management believes measures capital-allocation effectiveness over time. Other companies may calculate ROIC differently, limiting the usefulness of the measure for comparisons with other companies. Refer to the reconciliation in Exhibit 99.1 to this Form 10-K for further information on the Company's calculation of ROIC.
•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. Refer to the reconciliations in Exhibit 99.1 to this Form 10-K for further information on the Company's calculations of free cash flow and free cash flow conversion rate.
McDonald's Corporation 2025 Annual Report 7
2025 FINANCIAL PERFORMANCE
In 2025, global comparable sales increased 3.1%.
•Comparable sales in the U.S. increased 2.1%, benefiting from average check growth.
•Comparable sales in the International Operated Markets increased 3.2%, reflecting positive comparable sales in nearly all markets, led by Germany and Australia.
•Comparable sales in the International Developmental Licensed Markets increased 4.6%. Positive comparable sales were led by Japan, with all geographic regions reflecting positive comparable sales.
Earnings and cash flow growth rates presented below were impacted in 2025 and 2024 by restructuring charges associated with Accelerating the Organization. Additionally, 2024 results were also impacted by net charges primarily consisting of transaction costs, property sale gains 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.
Current year and prior year charges and gains are detailed along with reconciliations to the non-GAAP measures in the Net Income and Diluted Earnings Per Share section on page 13 and Operating Income section on page 18 in this Form 10-K.
In addition to the comparable sales results above, the Company had the following financial results in 2025:
•Consolidated revenues increased 4% (2% in constant currencies) to $26.9 billion.
•Systemwide sales increased 7% (5% in constant currencies) to $139.4 billion.
•Consolidated operating income increased 6% (4% in constant currencies) to $12.4 billion.
•Operating margin, defined as operating income as a percent of total revenues, increased from 45.2% in 2024 to 46.1% in 2025.
•Diluted earnings per share of $11.95 increased 5% (4% in constant currencies).
•Cash provided by operations was $10.6 billion, a 12% increase from the prior year.
•Capital expenditures of $3.4 billion were mainly allocated to new restaurant openings and, to a lesser extent, to reinvestment in existing restaurants.
•Free cash flow was $7.2 billion, an 8% increase from the prior year.
•Across the System, nearly 2,300 new restaurants (including those in our developmental licensee and affiliated markets) were opened.
•The Company increased its quarterly cash dividend per share by 5% to $1.86 for the fourth quarter, equivalent to an annual dividend of $7.44 per share. The Company returned a total of $7.1 billion to shareholders through dividends and share repurchases in 2025.
McDonald's Corporation 2025 Annual Report 8
STRATEGIC DIRECTION
The Company’s Accelerating the Arches growth strategy (the “Strategy”) encompasses all aspects of McDonald’s business as the leading global omni-channel restaurant brand. Our Strategy reflects the Company’s purpose, mission and values, as well as growth pillars that build on the Company’s competitive advantages. The Company's guiding purpose, mission and values are discussed in a dedicated section on page 4 of this Form 10-K.
GROWTH PILLARS
The following growth pillars, M-C-D, build on historic strengths and articulate areas of further opportunity. Under our Strategy, the Company will:
•Maximize our Marketing by investing in new, culturally relevant approaches, grounded in fan truths, to effectively communicate the story of our brand, food and purpose. The Company continues to build relevance with customers through emotional connections and world class creative, which are central to the brand’s “Feel-Good Marketing” approach. This is exemplified by campaigns that elevate the entire brand and continue to be scaled around the globe to connect with customers in authentic and relatable ways. The Company is committed to a marketing strategy that highlights value at every tier of the menu, as providing delicious and affordable menu options remains a cornerstone of the McDonald’s brand. This includes everyday low-price options on our menu, affordable meal bundles, limited-time deals and personalized value and digital offers available in our mobile app.
•Commit to the Core menu by tapping into customer demand for the familiar and focusing on serving our iconic products that are beloved by customers around the world such as our World Famous Fries, Big Mac, Quarter Pounder and Chicken McNuggets, which are some of our seventeen unique billion-dollar brands. Building on its foundational strength with burgers, the Company will continue to evolve and innovate its longest-standing menu item with plans to continue to implement “Best Burger”; a series of operational and formulation changes designed to deliver hotter, juicier, tastier burgers to nearly all markets by the end of 2026. Further, the Company is focused on continuing to gain share in the rapidly growing chicken category, as we continue to aggressively grow our chicken brands. This includes offering the McCrispy sandwich, which was deployed in nearly all major markets by the end of 2025 and the extension of the McCrispy brand into strips and wraps in several markets. These innovations and new menu offerings reflect the Company's ability to meet evolving customer preferences. The Company also continues to see a significant opportunity with beverages to drive long-term growth.
•Double Down on the 4D's: Digital, Delivery, Drive Thru and Restaurant Development by continuing to leverage competitive strengths and building a powerful digital experience growth engine to deliver a personalized and convenient customer experience. As another way to unlock further growth, the Company plans to continue to accelerate the pace of restaurant openings and technology innovation so that whenever and however customers choose to interact with McDonald’s, they can enjoy a fast, easy experience that meets their needs.
◦Digital: The Company’s digital experience is transforming how customers order, pay and receive their food. Through digital tools, customers can access personalized offers, participate in a loyalty program, order through our mobile app and receive McDonald's food through the channel of their choice. We are also providing increased convenience to customers through “Ready on Arrival”; a digital enhancement that enables crew to begin assembling a customer's mobile order prior to arrival at the restaurant to expedite service and elevate customer satisfaction. The Company successfully deployed this initiative in its top six markets by the end of 2025. The Company has loyalty programs in 70 markets, including nearly all major markets. McDonald's loyalty customers have proven to be highly engaged, and the Company plans to increase its 90-day active users to 250 million by the end of 2027. Further, the Company plans to grow its annual Systemwide sales to loyalty members to $45.0 billion by the end of 2027.
◦Delivery: The Company offers delivery from nearly 41,000 restaurants across approximately 100 markets, representing approximately 90% of McDonald's restaurants. The Company is continuing to build on and enhance the delivery experience for customers, including adding the ability to place a delivery order in our mobile app (a feature that is currently available in five of the Company’s top markets). The Company continues to scale this capability and expects to increase the percentage of Systemwide delivery sales originating from our mobile app to 30% by the end of 2027. The Company also has long-term strategic partnerships with delivery providers that continue to benefit the Company, customers and franchisees by optimizing operational efficiencies and creating a seamless customer experience.
◦Drive Thru: The Company has the most drive t
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MD&A history
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