Breaking Down Restaurant Brands International Inc. (QSR) Financial Health: Key Insights for Investors

You're looking at Restaurant Brands International Inc. (QSR) because you want to know if the multi-brand strategy-Burger King, Tim Hortons, Popeyes, and Firehouse Subs-is actually paying off in a tough consumer environment. Honestly, the Q3 2025 numbers show a mixed but resilient picture, suggesting the international and coffee segments are doing the heavy lifting. The company just reported Q3 revenue of $2.45 billion and an Adjusted EPS of $1.03, both beating analyst expectations, but you have to look deeper than the headline. Overall system-wide sales grew a solid 6.9%, but that growth is uneven; for instance, Tim Hortons Canada posted a strong 4.2% comparable sales increase, while Popeyes' comparable sales actually fell 2.4%. Management is still confident in delivering at least 8% organic Adjusted Operating Income (AOI) growth for the full year 2025, a crucial metric for a franchisor model like this. We need to map out which brand is driving that confidence and what the $0.62 quarterly dividend really signals about free cash flow (FCF) stability.

Revenue Analysis

You need to know where the money is coming from to truly understand Restaurant Brands International Inc. (QSR)'s financial stability. The direct takeaway is that QSR's revenue growth is accelerating, driven less by domestic franchise fees alone and more by its global footprint and supply chain operations, which is a strategic shift. For the trailing twelve months (TTM) ending September 30, 2025, QSR's total revenue hit a solid $9.264 billion, marking a strong 16.82% increase year-over-year.

The primary revenue streams for Restaurant Brands International Inc. come from a mix of franchise-based income and sales from its supply chain and company-owned restaurants. This isn't just a royalty business; it's a complex model. The core sources break down into three main categories:

• Franchise and Property Revenues: Royalties (a percentage of franchisee sales) and rent from leased properties. This is the high-margin, predictable cash flow.
• Supply Chain Sales: Revenue from selling food, packaging, and equipment to franchisees, often through its supply chain operations. This is a high-volume, lower-margin business.
• Advertising Revenues and Other Services: Contributions to national and local advertising funds, plus fees for technology and other services.

The revenue growth rate has shown a clear acceleration. The TTM growth of 16.82% through Q3 2025 is a significant jump from the 7.95% growth seen in 2023, for example. This growth isn't uniform, though. Q3 2025 revenue came in at $2.45 billion, a 6.9% year-over-year increase, beating analyst estimates. The momentum is defintely there, but you have to look deeper than the top-line number.

Segment Contribution and Key Changes

The contribution from different business segments reveals the real drivers of QSR's recent performance. The International (INTL) segment and Tim Hortons (TH) are the heavy hitters, together generating approximately 70% of the company's earnings as of Q3 2025. The International business, which includes all four brands outside the US/Canada, is a powerhouse, driving system-wide sales growth of 12.1% in Q3 2025. That's where the future growth is being built.

A significant change in the revenue structure is the creation of the Restaurant Holdings (RH) segment. This new segment, established in 2024 following the acquisition of Carrols Restaurant Group Inc. (a major Burger King franchisee) and Popeyes China, represents a shift. It means QSR now directly owns and operates a larger number of restaurants, which adds a new stream of sales revenue and operating costs, moving away from a pure franchisor model in those specific areas. This move gives QSR more direct control over brand execution, especially for Burger King's 'Reclaim the Flame' plan.

Here's a quick look at the operational drivers for the latest quarter:

The increase in Supply Chain Sales has also been a major contributor to the jump in total revenue, primarily due to rising commodity prices being passed through to franchisees. While this boosts the top line, it's important to remember that it also increases the cost of sales, so the impact on profit margins is often less pronounced than growth from pure royalty revenue. It's a volume story, not a margin one. If you want to dive deeper into who is betting on this model, check out Exploring Restaurant Brands International Inc. (QSR) Investor Profile: Who's Buying and Why?

Profitability Metrics

You're looking for a clear picture of Restaurant Brands International Inc. (QSR)'s financial engine, and profitability margins are the best place to start. The short answer is that QSR's core business model-largely franchised-delivers margins that significantly outperform the typical quick-service restaurant (QSR) industry average, but you need to watch the operational efficiency trends closely.

For the third quarter of 2025 (Q3 2025), Restaurant Brands International Inc. reported a total revenue of $2.45 billion. This top-line performance translated into some impressive margins, which reflect the company's fee-based revenue structure from its four major brands: Tim Hortons, Burger King, Popeyes, and Firehouse Subs. Honestly, it's a much different animal than a typical restaurant operator.

Here's the quick math on the key profitability ratios for Q3 2025:

• Gross Profit Margin: The gross profit of $1.19 billion on $2.45 billion in revenue gives us a margin of approximately 48.57%. This is a strong indicator of the company's ability to generate revenue well above its direct cost of goods sold (COGS), which stood at $1.26 billion for the quarter.
• Operating Profit Margin: The operating income of $663.00 million translates to an operating margin of roughly 27.06% for the quarter. This is defintely a high-leverage model.
• Net Profit Margin: The reported net profit margin for Q3 2025 was 12.86%.

QSR vs. Industry Profitability

When you stack QSR's margins against the broader industry, the difference is stark. The typical QSR business model-which is what most franchisees operate-sees net profit margins ranging from 6% to 10% of revenue in 2025. A gross profit margin of 40% or higher is considered robust for a standard fast-food chain. Restaurant Brands International Inc.'s margins are significantly higher because it collects royalties and rent from its franchisees, which are high-margin revenue streams, instead of bearing the full operational costs of every location.

This comparison highlights the value of the franchisor model:

Operational Efficiency and Profit Trends

The trend in profitability shows a company focused on execution. Management is targeting over 8% organic adjusted operating income growth for the full 2025 fiscal year, a clear sign of confidence in their strategic plans like Burger King's 'Reclaim the Flame.' While the Q2 2025 net income dropped to $189 million from the previous year, the Q3 2025 rebound to $315.00 million in net income suggests the turnaround efforts are gaining traction.

Operational efficiency is improving, but there are still headwinds. The increase in Adjusted Operating Income in Q3 2025 was driven by higher total revenues and a decrease in Segment General and Administrative (G&A) expenses. That's good cost management. But, this was partially offset by higher Supply Chain Cost of Sales, which is a direct consequence of rising commodity prices and the company's exposure through its supply chain segment, particularly with Tim Hortons. To be fair, managing those supply chain costs is a constant battle in this environment, but QSR is still on track for an estimated full-year net margin of 14.36%. If you want a deeper look at the capital behind these operations, check out Exploring Restaurant Brands International Inc. (QSR) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

You're looking at Restaurant Brands International Inc. (QSR)'s balance sheet to understand how they fund their global growth, and the quick takeaway is this: QSR is a company that leans heavily on debt, a typical strategy for a mature, franchised quick-service restaurant (QSR) model. Their financial structure is aggressive, but it's a calculated move to boost equity returns.

As of the most recent data from November 7, 2025, Restaurant Brands International Inc.'s Debt-to-Equity (D/E) ratio stood at approximately 4.08. This is a high number, especially when you compare it to the median D/E ratio for the broader 'Eating and Drinking Places' industry, which was around 2.01 in 2024. This tells you QSR uses significantly more debt than its peers to finance assets, which can amplify both gains and losses. It's a classic private-equity-style capital structure.

Here's the quick math on their debt load as of the end of the third quarter of 2025 (September 30, 2025). The total debt is overwhelmingly long-term, which gives them breathing room, but still represents a massive obligation:

• Long-Term Debt & Capital Lease Obligation: $15,552 million
• Short-Term Debt & Capital Lease Obligation: $316 million
• Total Stockholders Equity: $3,381 million

The company's reliance on debt financing is defintely the core of their capital strategy. They balance this high leverage by generating stable, predictable franchise-fee revenue, which is why a credit rating agency like S&P Global Ratings affirmed their 'BB' long-term issuer credit rating with a Positive Outlook in November 2025. They project QSR's adjusted debt to EBITDA will be about 4.6x at year-end 2025, showing a gradual deleveraging from prior years, which is a good sign.

Restaurant Brands International Inc. is actively managing its debt maturity profile. For example, in June 2024, they priced a $1.2 billion offering of 6.125% First Lien Senior Secured Notes due 2029 to refinance a portion of an existing term loan. Also, in September 2024, they launched a $500 million notes offering due 2029, specifically to redeem outstanding 5.750% notes that were due in 2025. This is smart treasury work-extending maturities to avoid a near-term cash crunch and locking in rates.

The balance between debt and equity funding is clear: QSR uses debt to fund growth, acquisitions, and most importantly, to return capital to shareholders. They are forecasting to use about 79% of their reported free operating cash flow (FOCF) in 2025 to pay a recurring dividend. This leaves little for meaningful debt repayment, so their deleveraging is primarily dependent on increasing their earnings before interest, taxes, depreciation, and amortization (EBITDA). If you want to dive deeper into the strategic intent behind this, check out their Mission Statement, Vision, & Core Values of Restaurant Brands International Inc. (QSR).

What this estimate hides is the interest rate risk. While they've refinanced, a high debt load means any unexpected spike in interest rates or a dip in global sales could quickly pressure their interest coverage ratio. You need to keep a close eye on their FOCF, which S&P projects will be more than $1.3 billion in 2025.

Liquidity and Solvency

You need to know if Restaurant Brands International Inc. (QSR) has the cash to cover its near-term bills, and the data for the 2025 fiscal year is clear: the company operates with a tight but manageable liquidity profile, backed by substantial cash reserves. It's a classic mature franchise model-not holding excessive cash on the balance sheet, but generating significant cash flow.

The core liquidity metrics, the current and quick ratios, show a deliberate approach to working capital. For the quarter ending September 2025, Restaurant Brands International Inc.'s current ratio was 1.06. This means current assets are just slightly higher than current liabilities, which is better than the restaurant industry median of 0.99. But here's the quick math on the more stringent test: the quick ratio (or acid-test ratio), which strips out less-liquid inventory, was approximately 0.7x for the latest reported quarter.

What this tells you is that Restaurant Brands International Inc. relies on its daily cash generation, not a huge stockpile of easily convertible assets, to pay its immediate obligations. This is defintely a strength for a franchised model, where inventory is minimal and receivables are high quality.

Working capital trends also reflect this efficiency. For the quarter ending June 2025, the change in other working capital was a minor outflow of -$9.0 million. The company is not building up large amounts of net current assets; it's keeping capital moving. This is a sign of operational discipline, but it leaves little margin for error if sales suddenly drop.

The cash flow statement, however, is where the real strength of Restaurant Brands International Inc. lies. The cash flow from operations (OCF) for the Trailing Twelve Months (TTM) ending September 30, 2025, was a very healthy $1,503 million. This is the lifeblood of the company, and it's robust.

• Operating Cash Flow (OCF): $1,503 million TTM Sep 2025.
• Investing Cash Flow (ICF): -$257 million TTM Sep 2025.
• Free Cash Flow (FCF): $566 million in Q3 2025.

The negative cash flow from investing activities (ICF) of -$257 million TTM Sep 2025 is expected, as it includes capital expenditures (CapEx) to support growth initiatives like the Burger King 'Royal Reset' program, which has funded $160 million as of September 30, 2025. Cash flow from financing activities is also a net outflow, which is typical for a mature, dividend-paying company. In Q3 2025 alone, Restaurant Brands International Inc. returned $282 million to shareholders through dividends and repaid approximately $100 million of debt.

The most important liquidity strength is the sheer size of the company's reserves. As of Q3 2025, total liquidity was approximately $2.5 billion, which included $1.2 billion of cash. This is a massive safety net that completely mitigates any concern from a sub-optimal quick ratio. While the net leverage ratio sits at 4.4 times, which is high, the consistent and predictable nature of franchise royalty cash flows makes this level of debt serviceable. The company's capital allocation priorities confirm this: they are actively working to reduce leverage while maintaining the dividend and investing in growth.

For a deeper dive into who is betting on this model, you should check out Exploring Restaurant Brands International Inc. (QSR) Investor Profile: Who's Buying and Why?

Valuation Analysis

You want to know if Restaurant Brands International Inc. (QSR) is a buy, a hold, or a sell right now. The short answer is that Wall Street's consensus is leaning toward a Moderate Buy, but the valuation multiples suggest the stock is priced for solid growth, not a deep bargain. You're paying a premium for a stable, global franchise business.

As of November 2025, the stock price sits around the $68.68 mark. Over the last 12 months, the stock has been relatively flat, showing a slight dip of about 1.27%. This tells you the market is digesting the company's recent performance and macro pressures, keeping it range-bound between its 52-week low of $58.71 and its high of $72.32.

Here's the quick math on the key valuation ratios:

• Price-to-Earnings (P/E): The trailing twelve months (TTM) P/E is about 24.63x. This is higher than the broader S&P 500 average, suggesting investors expect QSR's earnings per share to grow.
• Price-to-Book (P/B): The 2025 forecast P/B is 6.26x. A high P/B ratio is typical for asset-light, franchised models like QSR, but it's defintely something to watch.
• Enterprise Value-to-EBITDA (EV/EBITDA): The TTM EV/EBITDA is 15.50x. This ratio, which accounts for debt, is also on the higher side, indicating the market values QSR's operating cash flow at a premium compared to many peers.

The valuation multiples point to a stock that is fully valued, not undervalued. You are buying a quality asset at a fair, but not cheap, price.

When you look at the dividend, the story gets interesting. Restaurant Brands International Inc. is a reliable payer, with an annual dividend of $2.48 per share. This gives you a current dividend yield of about 3.68%. However, the payout ratio-the percentage of earnings paid out as dividends-is high at 118.00%. This means the company is currently paying out more in dividends than it is earning, which is not sustainable long-term without strong cash flow or debt financing. What this estimate hides is the strength of their free cash flow, which is often a better measure for a franchisor, but a 118% earnings payout is a clear yellow flag for future dividend growth.

The analyst community is split, which is why you see a 'Moderate Buy' consensus. Out of 16 recent analyst ratings, you have 8 Buy ratings, 7 Hold ratings, and 1 Sell rating. The average 12-month price target is set at $76.71. This suggests an upside of around 11.69% from the current price, which is a respectable return but not a screaming buy signal.

To dig deeper into the operational levers driving these numbers, check out the full analysis on Breaking Down Restaurant Brands International Inc. (QSR) Financial Health: Key Insights for Investors.

Your next step: Compare QSR's EV/EBITDA to direct peers like McDonald's and Yum! Brands to truly gauge if that 15.50x multiple is justified.

Risk Factors

You're looking at Restaurant Brands International Inc. (QSR) and its impressive global scale, but even a giant with over 32,000 restaurants faces real, near-term risks. My job is to map those for you, and honestly, the biggest threats in 2025 are the ones hitting every quick-service restaurant (QSR) operator: costs and competition.

The core financial risk is the persistent creep of inflation on commodity and labor costs. This isn't just a headline; it's already compressing margins. The Burger King corporate-owned restaurants, for instance, are expected to see a margin compression of approximately 100 basis points in the second half of 2025. This drop is primarily driven by commodity cost inflation, plus a 50 basis point step-up in the advertising fund contribution. That's a direct hit to profitability we need to watch closely.

Another key financial and strategic risk is the company's leverage. As of the end of the third quarter of 2025, Restaurant Brands International Inc. (QSR) reported a net leverage ratio of 4.4 times. While they ended Q3 with strong total liquidity of approximately $2.5 billion, including $1.2 billion of cash, that leverage level still emphasizes a reliance on debt in the overall capital structure. The constant focus on deleveraging is a strategic imperative.

Operational and external challenges are also in play:

• Franchisee Health: The success of Restaurant Brands International Inc. (QSR) hinges on its franchisees. Any widespread struggle with rising costs or operational efficiency can lead to disputes and closures, as seen in the broader industry.
• Digital and Cyber Risk: As the company leans heavily on digital ordering and loyalty programs, its digital ecosystem expands, opening up new vulnerabilities. The average cost of a cyberattack now exceeds $3.3 million across the industry, encompassing ransom and recovery expenses.
• Macro-economic Pressures: Currency fluctuations and shifting consumer spending habits due to inflation remain a constant headwind, especially for a company with operations in over 120 countries and territories.

To mitigate these risks, management is executing clear, actionable plans. The strategic refranchising effort is a prime example, aiming to sell between 50 and 100 Burger King restaurants in 2025 to strong, committed operators, which simplifies the business model and reduces capital intensity. They are also on track to deliver at least 8% organic Adjusted Operating Income (AOI) growth in 2025 by focusing on operational excellence across all brands.

The 'Reclaim the Flame' plan for Burger King, which has seen $160 million funded out of a planned up to $550 million for 'Royal Reset' investments by Q3 2025, is the core strategic mitigation against competitive pressure and menu stagnation. This is a multi-year effort to improve restaurant image and boost franchisee profitability. For a deeper dive into the company's long-term vision, review their Mission Statement, Vision, & Core Values of Restaurant Brands International Inc. (QSR).

Growth Opportunities

You want to know where the next dollar of growth is coming from for Restaurant Brands International Inc. (QSR), and the answer is clear: it's a disciplined, two-pronged attack focused on international expansion and a massive domestic brand overhaul. This isn't just about adding new stores; it's about making the existing ones work harder and smarter.

The company is firmly on track to deliver at least 8% organic Adjusted Operating Income (AOI) growth for the full 2025 fiscal year, a strong signal of operational focus. Here's the quick math: with analysts forecasting full-year revenue around $9.37 billion, the focus on cost management and sales acceleration is defintely paying off.

The primary engine for new unit growth and revenue is the international segment. In the third quarter of 2025, consolidated system-wide sales grew by 6.9% year-over-year, but the international segment surged ahead with a 12.1% jump. Markets like Asia-Pacific, the Middle East, and Latin America are key expansion targets, capitalizing on rising middle-class populations and urbanization.

Strategic Initiatives Driving 2025 Performance

The core of the near-term strategy is a significant capital investment across the portfolio, plus smart partnerships that de-risk market entry. The most visible initiative is the multi-year Burger King 'Reclaim the Flame' plan, which commits up to $700 million through 2028. This is a huge investment in infrastructure.

• Royal Reset: Funds for high-quality remodels, relocations, and restaurant technology. As of September 30, 2025, $160 million has been funded toward this part of the plan.
• China Joint Venture: In November 2025, QSR announced a new joint venture for Burger King China with Chinese private equity company CPE, which includes a $350 million capital infusion to fund new restaurant openings and marketing. This shifts the operational and financial burden to a strong local partner while QSR retains a 17% stake.
• Digital-First Innovation: Leveraging technology like AI-powered drive-thrus and sophisticated loyalty programs is critical for customer retention and increased traffic.

What this estimate hides is the operational lift required to execute these remodels without disrupting sales, but the strong franchisee alignment across all brands is a major competitive advantage, ensuring disciplined execution.

Competitive Edge and Product Focus

QSR's competitive advantage in 2025 stems from its cost structure and global brand recognition. Quick-service restaurants (QSRs) generally operate with lower labor costs and have experienced lower inflation rates (3.6% as of 2024 for QSRs versus 4.3% for full-service) which helps keep consumer prices affordable, a crucial factor in the current economic environment.

Product innovation is also shifting to meet the modern consumer. You see a clear move toward healthier options, plant-based alternatives, and globally-inspired, yet hyper-localized, menu items. The company's diversified portfolio-Tim Hortons, Burger King, Popeyes, and Firehouse Subs-allows it to capture growth across coffee, burgers, chicken, and subs segments.

To understand the foundation of this strategy, you should review the core principles that guide their decisions: Mission Statement, Vision, & Core Values of Restaurant Brands International Inc. (QSR).

Here is a snapshot of the Q3 2025 performance, showing where the momentum is strongest:

So, the action for you as an investor is to monitor the execution of the 'Royal Reset' investments and the new China joint venture. If the capital deployment translates directly into sustained comparable sales growth at Burger King US, the 8%+ AOI target for 2025 is just the beginning.