AI Takeaway
YUM Brands delivered solid FY2025 results with revenue growing 8.8% to $8.21B and net income rising 4.9% to $1.56B, supported by strong operating cash flow of $2.01B, though cost pressures weighed modestly on margins.
Revenue
$8.21B
++8.81% YoY
EPS (Basic)
$5.59
++5.87% YoY
Operating Income
$2.57B
++7.12% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
YUM Brands grew total revenue by 8.8% year-over-year to $8.21B in FY2025, up from $7.55B in the prior year, reflecting continued global franchise expansion and same-store sales momentum across its brand portfolio.
Source: Source: 10-K Income Statement
Cost of revenue rose 17.1% YoY to $2.48B, significantly outpacing the 8.8% revenue growth rate, which compressed gross profit margins and signals rising input or operational costs across the system.
Source: Source: 10-K Income Statement
Operating income grew 7.1% to $2.57B, while operating margin edged slightly lower to 31.3% from 31.8% in the prior year, indicating that cost pressures were largely but not fully offset by revenue gains.
Source: Source: 10-K Income Statement & Key Ratios
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Upgrade to unlockCost of revenue grew at nearly double the pace of total revenue (17.1% vs. 8.8%), which could signal structural cost inflation in food, labor, or franchise support. If this trend persists, it may further compress margins in future periods.
Source: Source: 10-K Income Statement
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Upgrade to unlockReported EPS of $1.73 versus the $1.79 analyst consensus — a -3.3% miss for FY2025.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $8.21B | $7.55B | +8.81% |
Cost of Revenue | $2.48B | $2.12B | +17.12% |
Operating Income | $2.57B | $2.4B | +7.12% |
Net Income | $1.56B | $1.49B | +4.91% |
EPS (Basic) | $5.59 | $5.28 | +5.87% |
EPS (Diluted) | $5.55 | $5.22 | +6.32% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $8.2B | $6.73B | +21.85% |
Current Assets | $2.04B | $1.87B | +9.03% |
Total Liabilities | $15.52B | $14.38B | +7.97% |
Current Liabilities | $1.52B | $1.27B | +19.46% |
Cash & Equivalents | $709M | $616M | +15.10% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $2.01B | $1.69B | +19.01% |
Investing Cash Flow | $-1B | $-422M | -137.68% |
Financing Cash Flow | $-924M | $-1.16B | +20.55% |
Share Buybacks | $552M | $441M | +25.17% |
D&A | $206M | $175M | +17.71% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 31.3% | 31.8% | -0.50% |
Net Margin | 19.0% | — | — |
ROA | 19.0% | — | — |
Current Ratio | $1.346 | — | — |
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YUM Brands delivered strong FY2025 results with total revenue of $8.21B, up 8.8% year-over-year, and net income of $1.56B, up 4.9%. Diluted EPS grew 6.3% to $5.55, and operating cash flow surged 19.0% to $2.01B, reflecting the strength of its global franchise model.
The key takeaways from YUM's FY2025 report include robust revenue and cash flow growth, but also notable cost pressure as cost of revenue rose 17.1%—nearly double the revenue growth rate. Operating margin dipped slightly to 31.3% from 31.8%, and YUM significantly increased share buybacks to $552M, up 25.2% YoY.
Yes, YUM Brands grew diluted EPS by 6.3% in FY2025 to $5.55, compared to $5.22 in the prior year. The growth was supported by both higher net income of $1.56B and a lower share count resulting from $552M in share repurchases during the year.
Based on the financial data, key risks include a highly leveraged balance sheet where total liabilities of $15.52B far exceed total assets of $8.20B, rising cost of revenue growing at 17.1% versus 8.8% revenue growth, and a sharp increase in investing cash outflows to -$1.00B from -$422M in the prior year. These factors could pressure margins and financial flexibility going forward.
YUM Brands maintains strong operational health with a 31.3% operating margin, $2.01B in operating cash flow, and a current ratio of 1.35, indicating adequate short-term liquidity. However, the company carries a structurally negative equity position due to its leveraged capital return strategy, which is a deliberate financial structure common among mature franchise businesses rather than a sign of distress.