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October 15, 2025 • 3 min read
Domino's Pizza, Inc. (DPZ) recently served up its financial results for the third quarter of 2025 in its latest 10-Q filing with the SEC. To understand the company's performance, let's slice into the income statement and see what's driving the numbers. You can review the full report here for a more detailed look.
For the quarter ending September 7, 2025, Domino's cooked up total revenues of $1.15 billion, a solid increase from the prior-year period. The company's net income landed at $139.3 million, translating to a diluted earnings per share (EPS) of $4.08.
To better visualize how Domino's generates revenue and manages its costs, the following flow diagram breaks down the income statement from top-line revenue to bottom-line profit.
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In the diagram, you may notice a small "Unallocated" cost of sales. This primarily represents reconciliation items between the costs directly assigned to business segments and the total consolidated cost of sales for the company.
Domino's business is organized into three main segments, and each tells a distinct part of the company's financial story.
U.S. Stores: This division, which includes both company-owned stores and royalties from U.S. franchisees, generated $371.5 million in revenue. The key driver here was the U.S. franchise business, which saw royalties and fees climb to $157.2 million thanks to strong same-store sales growth. Revenue from company-owned stores actually declined, but this was primarily due to the company's strategy of "refranchising"—selling corporate-owned stores to franchisees. This segment produced a robust operating income of $136.3 million.
Supply Chain: The engine of the Domino's system, the supply chain segment, was the largest contributor to revenue at $697.0 million. This division sells food, equipment, and supplies to nearly all U.S. and some international stores. The revenue increase was driven by higher order volumes. More importantly, the segment's operating income jumped to $70.2 million, showing improved profitability.
International Franchise: With an operating margin of nearly 86%, the international franchise segment is a highly profitable, asset-light part of the business. It generated $78.5 million in revenue from royalties and fees, leading to $67.3 million in operating income. Growth was fueled by store expansion and positive same-store sales.
While total revenue grew, the most encouraging sign in the report is the improvement in core profitability. Domino's consolidated gross margin expanded to 40.1% for the quarter, up from 39.2% in the same period last year. Similarly, the operating margin increased to 19.5% from 18.4%. This indicates that the company is running its primary business operations more efficiently.
Interestingly, net income was slightly lower than the $146.9 million reported in the third quarter of 2024. This wasn't due to weaker operations but rather a swing in "Other income/expense." The filing reveals this was largely caused by fluctuations in the value of the company's investment in DPC Dash, its master franchisee in China, which is a non-operational factor.
Overall, Domino's Q3 filing paints a picture of a healthy and efficient business. The company's franchise and supply chain model continues to be a powerful engine for growth and cash flow. The expansion in operating margin underscores strong execution in its core business, demonstrating that its "Hungry for MORE" strategy is delivering more than just pizza—it's delivering solid financial results.
Last updated: October 15, 2025