Black Rock Coffee Bar Fourth Quarter 2025 Earnings Call - Same-store sales and margins accelerated, fueling aggressive expansion

Brian Harbor, Analyst, Morgan Stanley0: Good afternoon, everyone, and thanks for joining us for Black Rock Coffee Bar’s fourth quarter results. Before we begin, we would like to remind you that this conference call may include forward-looking statements. These statements, which are subject to various risks, uncertainties, and assumptions could cause our actual results to differ materially from these statements. These risks, uncertainties, and assumptions are detailed in this afternoon’s press release, as well as our filings with the SEC, which can be found on our IR website. We undertake no obligation to revise or update any forward-looking statements or information, except as required by law. During our call today, we will also reference certain non-GAAP financial information. We use non-GAAP measures to assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our operating performance.

The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Reconciliations of GAAP to non-GAAP measures can be found in this afternoon’s press release and in our SEC filings. Joining me on the call today is our CEO, Mark Davis, and our CFO, Rod Booth. Following our prepared remarks, we’ll open the call for your questions. With that, I’ll turn the call over to Mark.

Mark Davis, Chief Executive Officer, Black Rock Coffee Bar: Thank you, Will. Good afternoon, everyone. We appreciate you joining us today on our fourth quarter earnings call. I’ll start by briefly highlighting our full year performance before walking through our fourth quarter operational highlights. I’ll then pass it over to Rod, who will provide an update on our fourth quarter financials, followed by our outlook for 2026 and key metrics. 2025 was a year of strong execution and meaningful acceleration across the business. We delivered 10.1% same-store sales growth, a 16.4% growth stack over the last 2 years, supported by healthy traffic and strong guest engagement. We opened a total of 32 new stores over the course of the year ahead of our plan, broadening our presence in existing growth markets and driving above plan new unit cohort performance.

We achieved revenue growth of 25% and expanded adjusted EBITDA by 36% for the year, reflecting operational discipline, cost management, and strong store-level profit margins of 29%, a 130 basis point expansion versus the prior year. These exceptional full-year results underscore the durability of our model and give us tremendous confidence in the momentum we’re carrying into 2026. Building off this strong foundation, our investments in our new store pipeline, supported by our growing team and a scalable development playbook, sets us on a clear path to achieve 1,000 units by 2035. In the fourth quarter, Black Rock delivered outstanding results, achieving revenue growth of 25% and adjusted EBITDA growth of 52% compared to the prior year period.

We opened 12 new locations in the quarter and same-store sales growth reached 9.3% or 18.8% on a two-year basis, with another quarter of positive comp growth across all of our markets. Heading into year-end, our teams remain focused on execution and advancing our three strategic priorities. 1. Deepening customer engagement. 2. Strengthening our people-oriented culture. 3. Expanding our market presence. These priorities are foundational to our business and will continue to support our long-term growth trajectory. I’ll start with a few updates on customer engagement. Our overall same-store transaction growth was 4.2% in the fourth quarter and 11.2% on a two-year basis for the quarter, highlighting very healthy momentum across our business, supported by a number of engagement initiatives.

Starting with loyalty, during the fourth quarter, our loyalty rewards participation rate remained strong at 65%, continuing the trend of healthy guest adoption and growing engagement since the platform launched in June of 2024. Loyalty members are visiting more often and spending more per visit than non-loyalty members, underscoring the program’s role in strengthening retention and deepening customer relationships. Our loyalty database continues to grow every day and has become a key channel for how we communicate and drive value with our guests. In just the first 18 months, we have built a strong data foundation and meaningful guest behavior insights, setting the stage for sustained program growth and customization potential. In the fourth quarter, we tested segmented, targeted offers across specific guest cohorts to improve relevance and performance.

Based on those results, we’ve established a more disciplined segmentation strategy for 2026 that we expect to drive measurable gains in engagement, transaction frequency, and offer efficiency, creating incremental value for both our guests and the business. We are very excited about the significant opportunities we see for loyalty as we expand our reach and elevate the digital experience to more Black Rock fans across markets. Beyond our loyalty program, digital sales also continue to support transaction growth, with app, online ordering, and third-party delivery driving greater guest frequency following our native Olo launch last year. In Q4, alongside our always-on media channels, we increased investment in paid media through a series of structured tests that have continued into Q1. We’re using those results to refine a more performance-driven, regionally tailored approach going forward.

Paid media remains a strategic lever for us to efficiently build brand awareness and demand, and we will continue to invest with test and learn discipline to optimize returns by market. Turning to menu mix and performance, in the fourth quarter, we leaned heavily into holiday seasonal flavors across our LTO lineup. The menu featured drinks like Butterscotch Breve, sour candy Fuel with gummy worms, and guest favorite peppermint bark. These ran alongside a series of surprise and delight one-off drops throughout the quarter, including our Halloween Fuels, Magic Fuels, and Naughty and Nice Fuels, which help drive traffic, engagement, and trial. Our top-performing beverages for the quarter were the Peppermint Bark Blondie, Pumpkin Blondie, White Chocolate Milano Mocha, and Butterscotch Breve.

We also launched our second collaboration with influencer Avery Woods during the quarter, a tangerine strawberry pomegranate Fuel, which outperformed our first viral Avery Woods drink collaboration featured over the summer. The campaign provided valuable learnings on how to authentically connect with our core guests and extend our reach to new audiences through our influencer network and creator partnerships. This quarter, we’ve started to apply those insights more broadly as we explore a structured micro-influencer strategy to support future LTOs, NSOs, brand awareness, and menu innovation. We’re prioritizing local creators who are already genuine fans of Black Rock and have an organic connection to our brand, allowing us to stay authentic while driving high intent engagement with opportunity to scale over time. As it relates to our food offerings, Egg Bites continues to exceed expectations with our guests, driving attachment and check growth over prior year as anticipated.

Product mix for Fuel and food increased sequentially during the fourth quarter, reflecting continued demand and engagement for our menu innovation and elevated sweet and savory food options. On innovation, this month, we’re excited to partner with OLIPOP to launch a dirty soda drink as a seasonal limited time offer to kick off the new year. We’re intentionally using LTOs to validate guest demand and performance before scaling new items system-wide. We’re also continuing to innovate and test across food and functional beverage offerings as part of our 2026 pipeline. Taken together, our diverse menu and multiple points of service are driving healthy customer engagement. We believe they provide significant opportunity to further elevate brand visibility and expand within our markets.

Turning now to our people-oriented culture, investing in our teams and fostering a collaborative and performance-driven culture is translating into stronger guest connection and amazing engagement for team members. Retention rates continue to be a real strength at Black Rock, highlighting our unique model, approach, and incentives, which are grounded in business acumen, career growth, and operational execution across our teams. Team member turnover improved year-over-year, driven by the evolution of our learning management system, which delivers onboarding and training support, builds business acumen, and drives greater new hire confidence, which supports even stronger engagement with our guests. Store lead turnover also improved year-over-year, supported by our Career Roadmap training program, which focuses on elevating the business acumen and leadership skills of our retail leaders, enabling them to run their stores more effectively and thrive in their roles.

This program gives us confidence in the ever-growing pipeline of leaders at Black Rock who are well equipped to support our store opening plan. To complement the success of our Career Roadmap program, in the fourth quarter, we launched our new high potential talent development program in partnership with the Bold Font team, prepping our most advanced team members for senior leadership. In conjunction with our Career Roadmap, this talent development program is designed to build a high-performing organization while investing deeply in our people and their long-term career growth. As we’ve outlined, the career development and business acumen of our teams is a core business pillar at Black Rock. We’re committed to teaching, coaching, and growing our people at every step, so they know Black Rock is the place to build a career, not just a job.

These programs meaningfully contribute to our success and have resulted in a stronger Black Rock delivering exceptional guest satisfaction. I’m incredibly proud of our team, and we are energized about continuing to develop our people pipeline for long-term growth. In addition to our training programs, our inventory management module, designed to enhance COGS performance and elevate business acumen across our employee base, continues to drive improvements. As we deepen our team’s understanding of the why behind inventory management, the efficiencies we create allow us to reinvest those savings into our people. We are optimistic about the impact this program will have over time on the performance of each store, area, and region as we continue to scale its implementation. Finally, I want to highlight one of the most important moments in our year, our annual top quartile meeting, which took place in Scottsdale, Arizona, just last week.

It’s a cornerstone of who we are as a company, a time when we come together to celebrate the year’s accomplishments, recognize our top performers across the organization, and align on our goals for 2026. This gathering reinforces the culture we’re building, one rooted in growth, accountability, and appreciation, and ensures our teams feel connected to both our purpose and our future. Last, I’ll share a few updates on our expansion strategy in the fourth quarter. We opened 12 new locations across several growth markets, Arizona, Colorado, Texas, and California, bringing our store openings for the year to 32, ahead of plan, and our total store count to 181. Of the 12 new store openings in the quarter, we opened our first modular prototype with a lobby, marking an important milestone as we look to accelerate our speed to market and drive cash-on-cash returns.

Our California stores are already producing strong AUVs out of the gate, reinforcing the effectiveness of our disciplined and data-driven site selection strategy while also lifting brand awareness in the market. Following the successful opening of our first drive-through with a lobby in Southern California in the third quarter, our second opening in quarter four was another exciting addition in this high-performing market. More broadly, our 2025 new unit cohort continues to perform ahead of plan, exceeding sales forecasts, delivering strong store-level margin acceleration and strong cash-on-cash returns, while also leading the system in barista retention and guest satisfaction. This sustained outperformance, together with the depth of our development pipeline, gives us confidence in our ability to drive continued AUV growth from $1.3 million system-wide as we close the year.

As we communicated last quarter, unexpected landlord delays and extended permitting timelines caused several planned store openings to shift later in the quarter. This timing dynamic in the third quarter also reduced the store weeks we carried into the start of quarter four and modestly limited new unit contribution early in the fourth quarter. Despite the temporary shift in timing, underlying demand remained healthy, highlighted by our strong comp momentum and the continued outperformance from our newest stores. Our development pipeline has continued to mature and the learnings from this process have allowed us to refine our systems, strengthen cross-functional coordination and position ourselves for a more robust 2026 opening cadence, which ensures we capture the full benefit of store weeks throughout the year.

Our robust pipeline refined process and additional investments backed by our strong earnings and sales growth further drives our confidence to open 1,000 units over the next 10 years. As we step into a new year, we are energized about the opportunities ahead of us with significant white space for continued growth across our existing markets, supported by our deep bench of talented team members and leaders. Before turning it over to Rod, I want to thank the Black Rock team, our baristas, our field operators, and our home office for their dedication and passion in serving our guests, our loyal guests for being a part of our community and making Black Rock part of their daily routines, and to our shareholders for their support as we pursue significant opportunities for growth and value creation ahead of us.

I also want to thank Jake Spellmeyer and Bryan Pereboom, who have retired from their board roles effective February 25, 2026, to focus on family and pursue other interests. We’re grateful for their contributions to Black Rock over the years and wish them the very best in this next chapter. With that, I’ll turn the call over to Rod to provide more detail on our fourth quarter 2025 financial performance and 2026 guidance.

Rod Booth, Chief Financial Officer, Black Rock Coffee Bar: Thanks, Mark. Good afternoon, everyone. We ended the 2025 calendar year with strong momentum across the business, we are excited about the growth and opportunity ahead in 2026. Let me start with a brief overview of our 2025 results before diving into our fourth quarter performance. For the 2025 year, we achieved $200.3 million in total revenue and $27.5 million in adjusted EBITDA. We recognized revenue growth of 24.5%, driven by 10.1% same-store sales growth and 32 new store openings, ending the year with 181 stores and counting. Our adjusted EBITDA growth was 36.2% and our adjusted EBITDA margin expanded 120 basis points to 13.7%.

We’re very proud of our team for their strong performance throughout 2025, which underscores the long-term growth opportunity that Mark highlighted earlier. Turning to the fourth quarter, we generated $53.6 million in total revenue, an increase of 25.3% year-over-year. Our growth was fueled by 9.3% same-store sales growth despite lapping a strong 9.5% comp in the prior year, along with same-store transaction growth of 4.2% and 12 new store openings during the quarter. Store-level profit was $15.7 million in the fourth quarter, up 35.8% over the prior year, and store-level profit margin was a strong 29.4%, 230 basis points favorable year-over-year.

Notably, for the full year, store-level profit margin expanded to 29.2%, up from 27.9% in the prior year, highlighting the commitment and execution of our retail teams across the organization, driving operating efficiencies and store-level profitability. As Mark mentioned, our annual top quartile meeting last week was a key moment for us to recognize our team’s contributions, celebrating their success and building excitement for the year ahead. Consolidated adjusted EBITDA for the quarter was $6.5 million, up 52.4% over the prior year as we executed against our strategic initiatives. Beverage, food, and packaging costs were $14.7 million or 27.4% of total revenue and 190 basis points favorable year-over-year. Store-level labor costs were $11.4 million or 21.3% of total revenue and 70 basis points favorable year-over-year.

Occupancy and related expenses were $4.4 million or 8.3% of total revenues and 20 basis points unfavorable year-over-year. Pre-opening costs were $1.2 million or 2.3% of total revenues, driven by 12 new store openings in the quarter. As Mark mentioned, we have continued to invest and reinforce our pipeline to support our long-term target of 1,000 stores by 2035. Cost margins improved year-over-year as a result of great execution from our retail teams, in addition to closely managed procurement and pricing with our supply chain team. We closely track cost centers and work with our partners to offset any potential increases whenever we can. As it specifically relates to coffee costs, while prices remained elevated through the fourth quarter and into the early part of 2026, we do anticipate some relief in the second half of the year.

Adjusted SG&A was $8 million in the quarter or 15% of revenue, compared to $6.4 million in the prior year period. We will continue to manage our SG&A growth with discipline to ensure it supports our ongoing expansion of our business. Our approach remains deliberate and focused, investing in team growth that enables our strategic initiatives, fuel sales performance, and underpins our new store development. Shifting to the balance sheet. As of December 31st, 2025, we had cash and cash equivalents of $28.4 million and a total debt position of $26.7 million, consisting of $18.7 million outstanding under our current credit facility and $8 million of financing obligations related to failed sale-leaseback arrangements.

We had a net cash position of $9.7 million and access to our unfunded revolver of $25 million. As it relates to CapEx, we invested $35.3 million for the year. Total CapEx for our 2025 class was $27.5 million before TI contributions of $6.7 million, with the remaining investments attributable to our existing stores and our 2026 pipeline of new stores. Build costs remain stable despite a volatile environment, a testament to our disciplined project management and vendor relationships. As Mark mentioned, we have made additional investments in our pipeline to support our growth target and build on the momentum from 2025. Turning to our outlook.

As we look ahead to 2026, we’re building off an exceptionally strong year of performance in 2025, marked by industry-leading same-store sales growth, strong store level margins, and continued unit expansion. While it’s early in our journey as a new public company, and our performance to date has been strong, we have tremendous conviction in our model. Our 2026 outlook aligns with our long-term algorithm, reflecting strong momentum in the business and the investments we’re making to position the company for sustained long-term success.

For the full year of 2026, we expect 36 new store openings, total revenue in the range of $255 million-$257 million, same-store sales growth in the mid-single digits, consolidated adjusted EBITDA in the range of $33.5 million-$34.5 million, capital expenditures in the range of $40 million-$41 million, including anticipated tenant improvement allowances or $58 million-$61 million in excluding anticipated tenant improvement allowances of $18 million-$20 million. Our CapEx guidance supports our 2026 class, our existing stores, as well as investments in our 2027 class later this year. Our teams continue to execute on our strategic initiatives with discipline, driving strong performance across our organization and the markets we operate in.

Our ability to deliver a differentiated guest experience paired with a premium product offering, engaged teams, and a scalable expansion model gives us confidence in our ability to sustain this trajectory. Looking further ahead, we remain firmly committed to delivering on our long-term targets of 20% annual new unit growth, revenue growth of 20% or more, mid-single digit same-store sales growth, and adjusted EBITDA growth that outpaces revenue growth. With this trajectory, we are confident we will achieve 1,000 units by 2035. With that, I’ll turn it over to the operator to open the line for questions.

Operator: Thank you. We’ll now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. In the interest of time, we ask that participants limit themselves to one question and one follow-up. One moment, please, while we poll for questions. Thank you. Our first question is from John Ivankoe with JPMorgan.

Rod Booth, Chief Financial Officer, Black Rock Coffee Bar: Hi. Thank you so much. The question is on new unit development. I wanna go a couple places with this. First, an increase in CapEx from $35 million approximately to $40 million-$41 million in 2026. Does that, you know, partially include maybe more units than we were previously expecting in 2027? At least the number that I have in the model is 43 units in 2027, and I wonder if there’s kind of a change

Mark Davis, Chief Executive Officer, Black Rock Coffee Bar: You know, to that number that we can begin to talk about in 26. Secondly, if I may, as you’re entering new markets and also as competition is entering your markets, are you seeing a change in the competitive intensity for your employees? Which sounds like it’s not, but, you know, comment on your employees, customers, and also site availability as capital in this industry is clearly chasing some of the high returns that you and some others are getting. Thank you so much.

Rod Booth, Chief Financial Officer, Black Rock Coffee Bar: Thanks for the question, John. I think I’ll take the first one and the first part, and Mark can take the second. To your point about CapEx, you’re spot on it, and Mark mentioned it, as did I. You know, I think what we learned in the third quarter and the fourth quarter was just really giving ourselves a little bit more in terms of investment in the pipeline and more opportunity. When you think about those targets for 2026, probably about 25% of that CapEx is actually going to be committed to the 2027 pipeline. Obviously, we’ve got the 2026 class of stores and then the ongoing maintenance CapEx. Yes, to your point, a significant portion of that is going to be for the 2027 class. You had asked another question. What was that?

Mark Davis, Chief Executive Officer, Black Rock Coffee Bar: Okay. Yeah.

Rod Booth, Chief Financial Officer, Black Rock Coffee Bar: Yeah.

Mark Davis, Chief Executive Officer, Black Rock Coffee Bar: Is 43 still the right number for 27, or might there be an upward bias to that relative to the previous expectations?

Rod Booth, Chief Financial Officer, Black Rock Coffee Bar: No, we’re still committed to the modeling at the moment. Again, as we’ve continued to build out not only the 2026, but the 2027 class, we’re getting way out in front of that. Again, when we look at some of these stores where they have a longer build time, we think about some of these reverse build-to-suit where there’s about a 9-12 month build time for us, you’ll see some of that CapEx in 2026 for stores that open in 2027, but no change to total units.

Mark Davis, Chief Executive Officer, Black Rock Coffee Bar: John, you asked about the competitors in markets. I think, you know, as Rod pointed out, when you look at our third quarter with the store weeks, we have adjusted the pipeline to make sure that not only are we gonna be great on store weeks, but we’re gonna be great on the units. You know, when you look at the availability, we have seen no pressure. If anything, we’ve seen significant opportunity of volume. The quality of sites has improved, and nothing has suggested that the market dynamics are changing. Us being a growing brand again has made us a really attractive tenant. You also asked about the people pipeline. Again, 98% of our team members above the barista are promoted within.

Again, as you think about the acumen, the Career Roadmap, the leadership pathway, the high potential talent development, profit sharing, and then the scorecard, all of that has produced very strong store leads, multi-store leads, and AMs in every state that we’re in. We’ve got an incredibly deep bench. When you think about the career development, both professional and personally, it’s really helped. That ownership from the team from the ground floor has really made us a great growing company. I think ultimately the answer to your question is we’re gonna make sure we hit the store weeks. We’re gonna make sure that we hit the development pipeline that we’ve committed to. Then on the people side, we’ve really doubled down to make sure that we’ve got the right teams to open each of those stores up in a quality way.

Mark Davis, Chief Executive Officer, Black Rock Coffee Bar: Thank you so much, guys.

Mark Davis, Chief Executive Officer, Black Rock Coffee Bar: Thanks for being on, John.

Operator: Our next question is from Andy Barish with Jefferies.

Andy Barish, Analyst, Jefferies: Hey, guys. Good evening. two things I just wanted to touch on. The first being, you know, kinda increased paid media and still I know in the testing mode, but I’m assuming that’s in your newer markets. Would you care to kind of comment on how many of those newer markets you’re seeing or testing paid media in to drive brand awareness?

Mark Davis, Chief Executive Officer, Black Rock Coffee Bar: Andy, thanks for being on. You know, I think, 1, paid media doesn’t drive loyalty. It obviously drives awareness. You know, when you look at our loyalty at 18 months, we’ve got about 2 million members, and that participation rate is growing month after month. Regarding the paid media, we’re using it to support all of the new store openings and the new member acquisition. Again, while it’s still very early, what we’ve seen is an increased personalization and scale, and that’s driving higher traffic check and overall sales. You know, as you know, Jessica, our CMO, she’s done great things with it. We not only feel good about how the paid media has gone, but we’re gonna continue to do more of it. As you pointed out, we’re gonna do it in all the new markets.

Andy Barish, Analyst, Jefferies: Gotcha. just circling back on the OLIPOP Dirty Soda, you know, LTO, is there a implication there that if it works really well in terms of customer demand, that that could wind up being, you know, a permanent addition to the menu in terms of Dirty Sodas?

Mark Davis, Chief Executive Officer, Black Rock Coffee Bar: You know, when you look at OLIPOP, you’re aware we’re only a couple days in, but the partnership was intentional, and it’s driven by guest demand for functional, cleaner label beverage. You know, I think it allows us to enter the Dirty Soda space in a differentiated, elevated way. To your point, the way that we roll out from an expansion system-wide, it’s an LTO today, and the hope is that we gain some insights that guide us to the next steps. You know, we certainly see it as an avenue where we can grow the business, and at the moment, we feel really strongly about it.

Sharon Zakya, Analyst, William Blair: Thank you very much.

Mark Davis, Chief Executive Officer, Black Rock Coffee Bar: Thank you, Andy.

Operator: Our next question is from David Tarantino with Baird.

David Tarantino, Analyst, Baird: Hi. Good afternoon. You know, Mark, I just wanna come back to the timing of your openings, I guess the second quarter in a row here, we’ve seen the openings, you know, kind of very back weighted in the quarter and causing you not to capture all the revenue that you might have hoped for. I guess the explanation for that is kind of landlord delays, I’m just wondering how you, how you resolve that issue. I know you sound pretty confident that you can get that done, but it sounds like the explanation is a bit out of your control. I guess, what are you gonna do exactly to sort of get a more even weighted set of openings across the quarter?

Mark Davis, Chief Executive Officer, Black Rock Coffee Bar: Yeah, David, thank you for being on, and I appreciate the opportunity to talk about it. You know, I think when we went public, we had a pipeline where we felt we had enough buffer. What we found is the way to be better at that is to not only have more stores in the pipeline, but also, you know, going through the data-based approach and pushing on that. When you look at store weeks, I would say generally that what was once our opportunity is now one of our strengths. I think when you look at the third quarter, when we had the landlord issues, we pulled stores forward from the fourth quarter, which obviously took some of the stores out of the fourth quarter. We did that again to make sure that we were ahead.

What we did, and I’m really proud of, you know, the team was able to hit the units. Again, I think for the future where we’ve added into the pipeline, we are far better set up for success. I’d say that we have better systems. We’ve got cross-functional support that works. When you look at the 2026 pipeline, David, we have a larger pipeline, and we have more buffer. Again, based on that, what you’re gonna see is better performance on store weeks. We’ll be ahead of it, and what’ll end up happening is we’re gonna have this strong pipeline, quality stores, and again, the goal is to eclipse that commitment on store weeks.

You know, really, if I could go back in time, we would have had more buffer as we went public, and I think what we’ve done now is made sure moving forward that we’re in a better place. You won’t see that in the 2026 year.

David Tarantino, Analyst, Baird: Got it. Thank you for that. If I can tack one more on development. You mentioned this modular prototype, that you opened in the quarter. Can you elaborate on what the benefits of that prototype are and maybe specifically address whether it’s lower cost to build or the same cost? I guess, you know, kind of what are the total benefits of that prototype?

Mark Davis, Chief Executive Officer, Black Rock Coffee Bar: Of course. When you look at the modular, we originally had drive-through only, and we now have a modular that is also with a lobby. Again, because we build end caps, reverse build-to-suits, build-to-suits, and ground leases, it’s very site-specific, and as you think about it varies quarter-to-quarter dependent upon the site. It does in fact reduce the capital expenditures. I think the greatest thing, back to your first question, is it speeds up store openings, and it gets us more store weeks. With those two formats, we’ll continue to do the drive-through only and the drive-through with the lobby, and that’ll help us leverage. I think when you’re looking at the units, you know, we opened 6 in Arizona, 1 in Texas, 4 in Colorado, and 1 in California in the fourth quarter.

What we’re seeing again is that we’re going into those high-performing markets, and we’re seeing really strong success with the current cohort and the prior cohort, and that’s been really good for us. Back to your original question, by having more quality sites in the pipeline, and again, pushing them earlier into the quarter, you’ll see that in the quarters ahead, we will have that strong same-store sales with the addition of the store weeks, and it sets us up to leverage and hit the guidance that Rod provided.

David Tarantino, Analyst, Baird: Great. Thank you.

Mark Davis, Chief Executive Officer, Black Rock Coffee Bar: Appreciate you being on, David.

Operator: Our next question is from Sharon Zakya with William Blair.

Sharon Zakya, Analyst, William Blair: Hey, thanks for taking the question. You know, I think, in the adjusted EBITDA guidance, it’s, you know, for a slight decline in margin year-over-year, I think 30-60 bps. Can you talk about what the embedded outlook is for unit level margins within that? Is there enough opportunity with the inventory management system to kind of keep that margin stable even with higher coffee costs in the first half?

Mark Davis, Chief Executive Officer, Black Rock Coffee Bar: Yeah. Thanks for the question, Sharon. I think to start, what I would say is, when you look at our overall company adjusted EBITDA margin, you know, we’re keeping it pretty consistent with our modeling, and what you have is all of these new stores that are coming online, and we’ve modeled them, you’ve seen it, where they’re coming online, and they’re copying just below the base, and then they ramp up to the base between, call it, that 18, 24, 36 month range. You know, really consistent with how we’ve been thinking about it. I think the opportunity in terms of the margin, you’re essentially asking, can it be better? I think, you know, we saw costs elevated with beans, you know, throughout 2025, as I mentioned, end of 2025 and into 2026.

We have seen some relief coming. I think one of the things we take a lot of pride in, our team does a really, really good job and is

Rod Booth, Chief Financial Officer, Black Rock Coffee Bar: Is really executing on our internal strategic initiatives. Mark mentioned the inventory management. We talked about it last time, but that was a big one to help out in terms of margin, and we still think we have opportunity there. Even if in the first half of the year, the coffee costs remain high, they’re not gonna be much higher than they were in the fourth quarter and really the opportunity is in the second half. We’re also trying to be cautious with that because last year was a pretty tough year to predict it that way. I think we feel really good about the guidance, really feel really good about our model, and then it’s our opportunity and our team’s opportunity to continue to go out and execute and, you know, continue performing at a high level.

Sharon Zakya, Analyst, William Blair: Mark, you talked about the segmented targeted offers that you did in test, and you kind of teased with some positive results you saw there. Can you put some more, maybe meat on the bone of what you saw and how quickly you’re going to roll that out more broadly in 2026? Thanks.

Mark Davis, Chief Executive Officer, Black Rock Coffee Bar: You bet. You know, Sharon, when you’re looking at the marketing spend, we had tested segmented targeted marketing to deliver more customized offers. That’s the first time we had done that. What we found is that the broad scalable approach, one being data-driven, has worked really well for us. You know, Jess has done a great job of pushing that multi-channel strategy, and so you’re seeing it across loyalty. We’ve obviously got paid media innovation in the new store openings. Rod spoke to this when he talked about the sales and the traffic. What you’re seeing is it’s been effective in driving traffic and spend. It’s obviously helped with awareness. I think for everybody on the call, what we’ve tried to do, and Jess has pushed real hard on this, is be responsible in our spend.

We’re increasing year-over-year, and really what we want from that is to support the unit growth, the brand awareness, and we wanna make sure it’s targeted. We’ll have more results as we come into the first quarter, and then I think what you’ll see is we’ll continue to do that through the year. It’s obviously helped us with the sales and the transactions, and we see it as something we’re gonna push in the future.

Sharon Zakya, Analyst, William Blair: Thank you.

Mark Davis, Chief Executive Officer, Black Rock Coffee Bar: Thank you, Sharon.

Operator: Our next question is from Brian Harbor with Morgan Stanley.

Brian Harbor, Analyst, Morgan Stanley: Yeah, thanks. Good afternoon, guys. Since we’re almost through it, I guess, would you care to say anything about the first quarter? Do you think, would you sort of endorse current consensus estimates, or is the growth rate, you know, kind of consistent with your full year guidance, for example?

Mark Davis, Chief Executive Officer, Black Rock Coffee Bar: Of course. Bryan, thank you for being on. When you look at the first quarter, we feel really, really good about it. You know, the quarter is trending strong, and it allowed us to provide that guidance. We’re excited about the momentum. You know, with that momentum, we had about 200 basis points of weather in January that was in Texas. Again, based upon what we’re seeing, we still felt good to increase our initial guidance. I would say, generally speaking, the first quarter is off to a great start, and we feel good about it.

Brian Harbor, Analyst, Morgan Stanley: Okay, sounds good. How are you thinking about new store productivity this year? It seems like, you know, you have an expectation that it’ll be higher than the prior year. Is that driven by sort of the markets you’re entering? Or maybe comment specifically on that piece.

Rod Booth, Chief Financial Officer, Black Rock Coffee Bar: I’ll take that one, Brian. I think from a terms of store productivity, we’re essentially modeling our stores to produce similar margins as they did in 2025. I think our opportunity is always to, as Mark mentioned earlier, to go after the sales, to leverage those sales into, you know, better margin. Also, you know, just continue to focus on those newer cohorts and the way those stores ramp to profitability. You know, I think we feel really good from a modeling standpoint, and our opportunity is just for the teams to continue to go out and execute and our new stores to continue to get better.

Brian Harbor, Analyst, Morgan Stanley: Thank you.

Operator: Our next question is from Chris O’Call with Stifel.

Patrick O’Call, Analyst, Stifel: Thanks, guys. This is Patrick on for Chris. Mark, given the momentum in the business, I know at one point you were holding back on, you know, discounted loyalty offers within the loyalty program. You know, I was wondering if that was still the case here as you think about going into 2026. As you think about the slate of LTOs that you have coming in 2026, given you had a lot of effectiveness in 25, what gives you confidence you can continue to drive some of that strong engagement you’ve seen from the innovation standpoint this year?

Mark Davis, Chief Executive Officer, Black Rock Coffee Bar: Yeah, Patrick, it’s great to hear from you. I think when you look at our marketing, you know, we had always planned on doing segmented offers and driving more of the loyalty. I think, you know, one of the things that we’re very proud of, and Rod spoke to this, but when you look at our two-year comp, it’s gonna be right around 18.894% on average. So, you know, one of the things that Jessica again has pushed on is the ability to go out and test these different offers and try them and all of the above there. We obviously are looking at collaborations. You know, I spoke to it on the call, but we had a very strong second collaboration around the LTO.

You think about the OLIPOP we’re doing that’s coming on, and all of these things I think are incremental. I’ll go back to Egg Bites for a moment. You know, Egg Bites has been really strong for us as well. What we’ve seen there is while, you know, coffee and beverage are our primary focus. What we’ve seen is that the LTOs, the segmented loyalty, and then obviously the food platform has provided opportunities for us to grow our business and grow our AUV, which we’re really proud of. You look at that AUV, and we said this in the script as well, but we came in right at $1.3 million.

Again, when you look at that same-store sales and how it’s growing, I think what we see is we’re going to be able to continue to grow the business and leverage, and all of the platforms I spoke to earlier help with that.

Patrick O’Call, Analyst, Stifel: Great. That’s helpful. Rod, I know you touched on the fact that, you know, EBITDA is growing at a slightly slower rate than revenue this year, and that’s largely due to coffee costs. Is there anything else in the sort of the waterfall of the P&L down to EBITDA that we should keep in mind that’s kinda helping to drive that dynamic outside of elevated coffee costs this year?

Rod Booth, Chief Financial Officer, Black Rock Coffee Bar: No. I think, again, I think we even touched on this last call, when you think about coffee, it really represents just under 3% of our net sales. Certainly if it were to stay elevated, it could impact the business. Like I said, you know, we’re buying coffee four to six months out, and I think if anything, we expect that to continue to come down, which would help. I think in terms of store productivity, we talked about that one. As a company, you know, we’re just continuing to manage our G&A and the growth of that G&A, especially as a new public company, closely. You know, Mark mentioned it, we’ll continue to invest in marketing, trying new things. We’ll continue to invest in the team to really support our growth.

We’re really happy with our modeling of, you know, how we think about sales, how we think about profitability from the stores, and then the overall company profitability.

Patrick O’Call, Analyst, Stifel: Got it. Helpful. Thanks, guys.

Mark Davis, Chief Executive Officer, Black Rock Coffee Bar: Thanks for being on, Patrick.

Operator: Our next question is from Jared Klein with Raymond James.

Jared Klein, Analyst, Raymond James: Hi, this is Jared Klein on for Brian Harbor. Thanks for taking my question. Just two quick ones. Sorry if I missed this, but could you share the level of commodity inflation and pricing that is embedded in the guidance? Just more of a high-level one on the customer base. Are there any changes you may be seeing in order patterns or maybe daypart trends that are worth noting? Thanks.

Rod Booth, Chief Financial Officer, Black Rock Coffee Bar: Sure. Jared, thanks for the question. What was the first part of the question? Sorry, it cut out for me.

Jared Klein, Analyst, Raymond James: Yes. Could you share the level of commodity inflation and pricing that is embedded within the guidance?

Rod Booth, Chief Financial Officer, Black Rock Coffee Bar: Yeah. From a pricing standpoint, you know, we’ve continued to approach price, you know, essentially with the goal of being neutral with inflation. I think we saw in 2025 that was harder to do. We’ve continued to do that in 2026, although I don’t think you’ll see us take as much price just considering, you know, we’ve got healthy margins. We’re really happy with our margins, our real opportunity is to go after more sales and leverage they provide. From a modeling standpoint, we are expecting the same level of, you know, store-level productivity. Really the balance between price and inflation overall is something we’re continuing to manage and monitor, but again, feel pretty good about it, knowing, you know, we’ve got some opportunity for it to come down with coffee.

Our other costs, primary inputs, when you think about dairies, the sugars, and the things like that, they’ve been very stable for us.

Mark Davis, Chief Executive Officer, Black Rock Coffee Bar: Then, Jared, the second part of your question, I’ll talk a little bit about the positioning. You know, our demographic is roughly 18-45, and what that does is it allows us to have a little bit diversity in the mix. We are coffee first. Again, our coffee mix is gonna be about 55%. Our energy has grown to about 24%. Again, you had asked about dayparts and different mediums. The digital mix is gonna be right around 51.5%-52% on coffee, and it’s gonna be around 27% on energy. With the Egg Bites and everything else, our food has grown to about 12%. All of this, what it does for us, especially with that broad demographic, we lean heavy on coffee, and coffee is obviously resilient, which is great for us.

We focus on that strong customer experience. When you think about the strategy, when you’re pushing on quality beverage and you’ve got that great experience, it attracts new guests and increased transaction frequency, which is great. I think overall, when you look across the company, while the volume is growing, our mix has stayed fairly consistent, and I think that gives us great confidence in our brand growth, even despite the macroeconomic pressures that some of our peer group is feeling.

Jared Klein, Analyst, Raymond James: That’s helpful. Thanks.

Operator: Thank you. There are no further questions at this time. I would like to hand the floor back over to Mark Davis for any closing comments.

Mark Davis, Chief Executive Officer, Black Rock Coffee Bar: Thank you. I appreciate it very much. I wanna thank everyone for what was an outstanding fourth quarter and a 2025 year. I’m also excited for the guidance we provided for 2026 and our ability to continue to advance our company for our customers, our teams, and our shareholders. I wanted to reiterate, because I think we had a really strong quarter and a really strong year, that in the fourth quarter, revenue growth was 25.3%. Again, the same-store sales over the two years was 18.8%, averaging 9.4%. The store-level profit in the fourth quarter was up 35.8% over the prior year. Going to 2025, the revenue growth was 24.5%, and it was driven by same-store sales of 10.1%. Again, the EBITDA for the year was 36.2% better.

We opened 32 stores against a target of 30, which is growth of 21.4%. Back to David’s question, we have continued to learn and get better on the store weeks, which you’ll see as we move forward. Better based upon the performance in 2025, Rod came out and helped guide the $255 million-$257 million of total revenue. Again, we guided to 33.5%-34.5% of consolidated adjusted EBITDA, which is all ahead of our long-term algorithm. Most importantly, we continue to double down on our world-class teams. We run exceptional team member turnover, and our baristas continue to be the point of difference with the experience they provide. Our culture and our exceptional retention continues to drive what we believe is a very sustainable team member model.

It continues to help us exceed expectations. I just wanna say that I’m beyond grateful for our teams and everyone that continues to believe in what Black Rock can be. I appreciate your time today.

Operator: This concludes today’s conference call. You may disconnect your lines at this time. Thank you again for your participation.