PAPA JOHNS INTERNATIONAL INC 10-Q

Item 1. Financial Statements Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In thousands, except per share amounts) September 28, 2025 December 29, 2024 (Unaudited) Assets Current assets: Cash and cash equivalents $ 38,972 $ 37,955 Accounts receivable, net 104,384 101,677 Notes receivable, current portion 3,815 4,928 Income tax receivable 3,689 2,214 Inventories 35,761 35,245 Prepaid expenses and other current assets 53,272 48,586 Assets held for sale (a) 30,949 — Total current assets 270,842 230,605 Property and equipment, net 262,294 273,272 Finance lease right-of-use assets, net 36,295 28,761 Operating lease right-of-use assets, net 160,975 184,425 Notes receivable, less current portion, net 3,237 8,867 Goodwill 67,450 75,460 Other assets 83,004 87,562 Total assets $ 884,097 $ 888,952 Liabilities, Redeemable noncontrolling interests and Stockholders’ deficit Current liabilities: Accounts payable $ 70,378 $ 61,842 Income and other taxes payable 9,632 11,987 Accrued expenses and other current liabilities 164,306 155,579 Current deferred revenue 12,555 15,519 Current finance lease liabilities 9,700 7,280 Current operating lease liabilities 25,724 25,756 Current portion of long-term debt 2,500 — Liabilities held for sale (a) 16,034 — Total current liabilities 310,829 277,963 Deferred revenue 18,604 21,287 Long-term finance lease liabilities 28,312 22,885 Long-term operating lease liabilities 156,788 173,557 Long-term debt, less current portion, net 727,135 741,650 Other long-term liabilities 65,880 64,923 Total liabilities 1,307,548 1,302,265 Redeemable noncontrolling interests 925 903 Stockholders’ deficit: Common stock ($ 0.01 par value per share; issued 49,296 at September 28, 2025 and 49,283 at December 29, 2024) 493 493 Additional paid-in capital 455,099 452,449 Accumulated other comprehensive loss ( 6,733 ) ( 8,456 ) Retained earnings 219,041 241,717 Treasury stock ( 16,510 shares at September 28, 2025 and 16,637 shares at December 29, 2024, at cost) ( 1,107,205 ) ( 1,115,729 ) Total stockholders’ deficit ( 439,305 ) ( 429,526 ) Noncontrolling interests in subsidiaries 14,929 15,310 Total Stockholders’ deficit ( 424,376 ) ( 414,216 ) Total Liabilities, Redeemable noncontrolling interests and Stockholders’ deficit $ 884,097 $ 888,952 (a) Refer to “Note 11. Divestitures” for additional details. See accompanying notes. 1 Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended Nine Months Ended (In thousands, except per share amounts) September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024 Revenues: Company-owned restaurant sales $ 168,421 $ 171,097 $ 521,291 $ 546,988 Franchise royalties and fees 47,051 45,830 143,409 139,535 Commissary revenues 229,581 228,989 693,098 660,823 Other revenues 21,424 19,521 68,317 60,866 Advertising funds revenue 41,677 41,370 129,514 120,405 Total revenues 508,154 506,807 1,555,629 1,528,617 Costs and expenses: Cost of sales 369,130 370,079 1,107,342 1,100,783 General and administrative expenses 56,478 12,883 191,763 127,806 Depreciation and amortization 24,914 17,260 62,076 52,528 Advertising funds expense 41,461 41,356 129,822 120,327 Total costs and expenses 491,983 441,578 1,491,003 1,401,444 Operating income 16,171 65,229 64,626 127,173 Net interest expense ( 9,945 ) ( 10,629 ) ( 30,608 ) ( 32,588 ) Income before income taxes 6,226 54,600 34,018 94,585 Income tax expense (a) ( 1,753 ) ( 12,812 ) ( 10,531 ) ( 25,347 ) Net income 4,473 41,788 23,487 69,238 Net (income) loss attributable to noncontrolling interests 234 20 ( 27 ) ( 551 ) Net income attributable to the Company $ 4,707 $ 41,808 $ 23,460 $ 68,687 Net income attributable to common shareholders $ 4,447 $ 41,808 $ 22,742 $ 68,687 Basic earnings per common share $ 0.14 $ 1.28 $ 0.69 $ 2.10 Diluted earnings per common share $ 0.13 $ 1.27 $ 0.69 $ 2.09 Basic weighted average common shares outstanding 32,889 32,745 32,834 32,701 Diluted weighted average common shares outstanding 33,043 32,930 32,962 32,850 (a) The signage of Income tax expense has been changed from the historic presentation for purposes of signage consistency with other expense items. See accompanying notes. 2 Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three Months Ended Nine Months Ended (In thousands) September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024 Net income $ 4,473 $ 41,788 $ 23,487 $ 69,238 Other comprehensive income (loss), before tax: Foreign currency translation adjustments ( 908 ) 2,051 2,720 1,670 Interest rate swaps (a) ( 84 ) ( 1,059 ) ( 547 ) ( 103 ) Other comprehensive income (loss), before tax ( 992 ) 992 2,173 1,567 Income tax effect: Foreign currency translation adjustments 207 ( 453 ) ( 574 ) ( 367 ) Interest rate swaps (b) 19 239 124 23 Income tax effect 226 ( 214 ) ( 450 ) ( 344 ) Other comprehensive income (loss), net of tax ( 766 ) 778 1,723 1,223 Comprehensive income before attribution to noncontrolling interests 3,707 42,566 25,210 70,461 Less: comprehensive (income) loss, redeemable noncontrolling interests ( 32 ) ( 43 ) ( 84 ) ( 233 ) Less: comprehensive (income) loss, nonredeemable noncontrolling interests 266 63 57 ( 318 ) Comprehensive income attributable to the Company $ 3,941 $ 42,586 $ 25,183 $ 69,910 ___________________________________ (a) Amounts reclassified out of accumulated other comprehensive loss into net interest income (expense) include $ 158 and $ 117 for the three and nine months ended September 28, 2025, respectively and $ 194 and $ 591 for the three and nine months ended September 29, 2024, respectively. (b) The income tax benefit (expense) effects of amounts reclassified out of accumulated other comprehensive loss were $( 35 ) and $( 26 ) for the three and nine months ended September 28, 2025, respectively and $ 43 and $ 133 for the three and nine months ended September 29, 2024, respectively. See accompanying notes. 3 Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Statements of Stockholders’ Deficit (Unaudited) Papa John’s International, Inc. (In thousands) Common Stock Shares Outstanding Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss (b) Retained Earnings Treasury Stock Noncontrolling Interests in Subsidiaries Total Stockholders’ Deficit For the three months ended September 28, 2025 Balance at June 29, 2025 32,753 $ 493 $ 452,787 $ ( 5,967 ) $ 229,868 $ ( 1,109,178 ) $ 15,243 $ ( 416,754 ) Net income (loss) (a) — — — — 4,707 — ( 266 ) 4,441 Other comprehensive income (loss), net of tax — — — ( 766 ) — — — ( 766 ) Dividends on common stock ($ 0.46 per share) — — 23 — ( 15,534 ) — — ( 15,511 ) Exercise of stock options — — — — — — — — Stock-based compensation expense — — 4,639 — — — — 4,639 Issuance of restricted stock 43 — ( 1,770 ) — — 1,769 — ( 1 ) Tax effect of restricted stock awards ( 13 ) — ( 583 ) — — — — ( 583 ) Distributions to noncontrolling interests — — — — — — ( 48 ) ( 48 ) Other 3 — 3 — — 204 — 207 Balance at September 28, 2025 32,786 $ 493 $ 455,099 $ ( 6,733 ) $ 219,041 $ ( 1,107,205 ) $ 14,929 $ ( 424,376 ) For the nine months ended September 29, 2025 Balance at December 29, 2024 32,646 $ 493 $ 452,449 $ ( 8,456 ) $ 241,717 $ ( 1,115,729 ) $ 15,310 $ ( 414,216 ) Net income (loss) (a) — — — — 23,460 — ( 57 ) 23,403 Other comprehensive income (loss), net of tax — — — 1,723 — — — 1,723 Dividends on common stock ($ 1.38 per share) — — 76 — ( 46,136 ) — — ( 46,060 ) Exercise of stock options 9 — 397 — — — — 397 Stock-based compensation expense — — 12,132 — — — — 12,132 Issuance of restricted stock 153 — ( 7,376 ) — — 7,360 — ( 16 ) Tax effect of restricted stock awards ( 40 ) — ( 1,791 ) — — — — ( 1,791 ) Distributions to noncontrolling interests — — — — — — ( 324 ) ( 324 ) Other 18 — ( 788 ) — — 1,164 — 376 Balance at September 28, 2025 32,786 $ 493 $ 455,099 $ ( 6,733 ) $ 219,041 $ ( 1,107,205 ) $ 14,929 $ ( 424,376 ) (a) Net income to the Company for the three and nine months ended September 28, 2025 excludes $ 32 and $ 84 , respectively, allocable to the redeemable noncontrolling interests for our joint venture arrangements. (b) At September 28, 2025, the accumulated other comprehensive loss of $ 6,733 was comprised of net unrealized foreign currency translation loss of $ 6,187 and net unrealized loss on the interest rate swap agreements of $ 546 . See accompanying notes. 4 Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Statements of Stockholders’ Deficit (continued) (Unaudited) Papa John’s International, Inc. (In thousands) Common Stock Shares Outstanding Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss (b) Retained Earnings Treasury Stock Noncontrolling Interests in Subsidiaries Total Stockholders’ Deficit For the three months ended September 29, 2024 Balance at June 30, 2024 32,622 $ 493 $ 446,547 $ ( 7,358 ) $ 215,800 $ ( 1,117,140 ) $ 15,518 $ ( 446,140 ) Net income (loss) (a) — — — — 41,808 — ( 63 ) 41,745 Other comprehensive income (loss), net of tax — — — 778 — — — 778 Dividends on common stock ($ 0.46 per share) — — 31 — ( 15,339 ) — — ( 15,308 ) Exercise of stock options 2 — 88 — — — — 88 Stock-based compensation expense — — 3,358 — — — — 3,358 Issuance of restricted stock 14 — ( 632 ) — — 632 — — Tax effect of restricted stock awards ( 4 ) — ( 178 ) — — — — ( 178 ) Distributions to noncontrolling interests — — — — — — ( 141 ) ( 141 ) Other 3 — ( 73 ) — — 252 — 179 Balance at September 29, 2024 32,637 $ 493 $ 449,141 $ ( 6,580 ) $ 242,269 $ ( 1,116,256 ) $ 15,314 $ ( 415,619 ) For the nine months ended September 29, 2024 Balance at December 31, 2023 32,488 $ 492 $ 452,290 $ ( 7,803 ) $ 219,027 $ ( 1,123,098 ) $ 15,476 $ ( 443,616 ) Net income (loss) (a) — — — — 68,687 — 318 69,005 Other comprehensive income (loss), net of tax — — — 1,223 — — — 1,223 Dividends on common stock ($ 1.38 per share) — — 95 — ( 45,445 ) — — ( 45,350 ) Exercise of stock options 22 1 1,020 — — — — 1,021 Stock-based compensation expense — — 5,903 — — — — 5,903 Issuance of restricted stock 171 — ( 6,242 ) — — 6,242 — — Tax effect of restricted stock awards ( 52 ) — ( 3,508 ) — — — — ( 3,508 ) Distributions to noncontrolling interests — — — — — — ( 480 ) ( 480 ) Other 8 — ( 417 ) — — 600 — 183 Balance at September 29, 2024 32,637 $ 493 $ 449,141 $ ( 6,580 ) $ 242,269 $ ( 1,116,256 ) $ 15,314 $ ( 415,619 ) (a) Net income to the Company for the three and nine months ended September 29, 2024 excludes $ 43 and $ 233 , respectively, allocable to the redeemable noncontrolling interests for our joint venture arrangements. (b) At September 29, 2024, the accumulated other comprehensive loss of $ 6,580 was comprised of net unrealized foreign currency translation loss of $ 6,186 and net unrealized gain on the interest rate swap agreements of $ 394 . See accompanying notes. 5 Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) Nine Months Ended (In thousands) September 28, 2025 September 29, 2024 Operating activities Net income $ 23,487 $ 69,238 Adjustments to reconcile net income to net cash provided by operating activities: Provision for allowance for credit losses on accounts and notes receivable 5,669 2,936 Depreciation and amortization 62,076 52,528 Deferred income taxes 1,731 3,877 Stock-based compensation expense 12,132 5,903 Refranchising and impairment loss 8,127 17,433 Loss (gain) on disposal of property and equipment 2,771 ( 42,034 ) Other 1,082 573 Changes in operating assets and liabilities, net of acquisitions: Accounts receivable ( 9,439 ) ( 359 ) Income tax receivable ( 1,412 ) 232 Inventories ( 1,544 ) ( 207 ) Prepaid expenses and other current assets 1,426 ( 1,278 ) Other assets and liabilities ( 972 ) ( 5,923 ) Accounts payable 8,134 ( 11,896 ) Income and other taxes payable ( 2,399 ) ( 7,609 ) Accrued expenses and other current liabilities ( 2,087 ) ( 9,551 ) Deferred revenue ( 4,739 ) ( 2,073 ) Advertising fund assets and liabilities 2,149 ( 15,906 ) Net cash provided by operating activities 106,192 55,884 Investing activities Purchases of property and equipment ( 47,002 ) ( 46,931 ) Purchases of property and equipment related to damages from natural disasters ( 5,121 ) — Insurance proceeds related to damages from natural disasters 3,300 — Notes issued — ( 154 ) Repayments of notes issued 5,703 3,148 Proceeds from dispositions and refranchising, net of cash transferred 831 49,012 Proceeds from investments 4,739 2,275 Other ( 68 ) 98 Net cash (used in) provided by investing activities ( 37,618 ) 7,448 Financing activities Net repayments of revolving credit facilities ( 210,042 ) ( 31,589 ) Proceeds from term loan 200,000 — Debt issuance costs ( 3,223 ) — Proceeds from exercise of stock options 397 1,021 Dividends paid to common stockholders ( 45,817 ) ( 45,381 ) Tax payments for equity award issuances ( 1,791 ) ( 3,508 ) Distributions to noncontrolling interests ( 387 ) ( 627 ) Principal payments on finance leases ( 7,455 ) ( 6,778 ) Other 110 278 Net cash used in financing activities ( 68,208 ) ( 86,584 ) Effect of exchange rate changes on cash and cash equivalents 651 215 Change in cash and cash equivalents 1,017 ( 23,037 ) Cash and cash equivalents at beginning of period 37,955 40,587 Cash and cash equivalents at end of period $ 38,972 $ 17,550 See accompanying notes. 6 Papa John’s International, Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) September 28, 2025 1. Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP” or “U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 28, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending December 28, 2025. For further information, refer to the Consolidated Financial Statements and footnotes thereto included in the Annual Report on Form 10-K for Papa John’s International, Inc. (referred to as the “Company,” “Papa John’s,” “Papa Johns” or in the first-person notations of “we,” “us” and “our”) for the year ended December 29, 2024. In discussions of our business, “Domestic” is defined as within the contiguous United States, “North America” includes Canada, and “International” includes the rest of the world other than North America. 2. Significant Accounting Policies Principles of Consolidation The accompanying Condensed Consolidated Financial Statements include the accounts of Papa John’s International, Inc. and its subsidiaries. All intercompany balances and transactions have been eliminated. During the year ended December 29, 2024, the Company implemented several financial statement changes in its Annual Report on Form 10-K, concurrent with the adoption of Accounting Standard Update (“ASU”) 2023-07, “Improvements to Reportable Segment Disclosures.” These changes evolve and modernize our financial statements and footnotes to increase transparency and better reflect management’s key performance metrics. Presentation changes to the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Cash Flows have been applied retrospectively, and as such, the results from the three and nine months ended September 29, 2024, have been reclassified for consistency with the current year presentation. Additionally, during the year ended December 29, 2024, the Company updated its internal cost allocation methodology to better reflect current levels of time and effort spent managing our different segments. These updates resulted in a higher allocation of previously unallocated corporate expenses to primarily each of the North America franchising and International segments. This update in methodology did not impact total reported expenses and was implemented prospectively beginning with the year ended December 29, 2024, and as such prior-period comparative information has been recast. Variable Interest Entity Papa Johns Domestic restaurants, both Company-owned and franchised, participate in Papa John’s Marketing Fund, Inc. (“PJMF”), a nonstock corporation designed to operate at break-even as it spends all annual contributions received from the system. PJMF collects a percentage of revenues from Company-owned and franchised restaurants in the United States for the purpose of designing and administering advertising and promotional programs. PJMF is a variable interest entity (“VIE”) that funds its operations with ongoing financial support and contributions from the Domestic restaurants, of which approximately 85 percent are franchised, and does not have sufficient equity to fund its operations without these ongoing financial contributions. Based on an assessment of the governance structure and operating procedures of PJMF, the Company determined it has the power to control certain significant activities of PJMF, and therefore, is the primary beneficiary. The Company has consolidated PJMF in its financial results in accordance with Accounting Standards Codification (“ASC”) 810, “ Consolidation .” Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and 7 accompanying notes. Significant items that are subject to such estimates and assumptions include the allowance for credit losses on accounts and notes receivable, property and equipment, net and impairment of long-lived assets, insurance reserves and tax reserves. Although management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, actual results could significantly differ from these estimates. Noncontrolling Interests Papa Johns has joint venture arrangements in which there are noncontrolling interests held by third parties that includ ed 98 restaurants at September 28, 2025 and September 29, 2024, respectively. Consolidated net income is required to be reported separately at amounts attributable to both the Company and the noncontrolling interests held by third parties. Net income (loss) attributable to these joint ventures for the three and nine months ended September 28, 2025 and September 29, 2024 was as follows: Three Months Ended Nine Months Ended (In thousands) September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024 Papa John’s International, Inc. $ ( 544 ) $ ( 46 ) $ 58 $ 1,285 Redeemable noncontrolling interests 32 43 84 233 Nonredeemable noncontrolling interests ( 266 ) ( 63 ) ( 57 ) 318 Total net income (loss) $ ( 778 ) $ ( 66 ) $ 85 $ 1,836 The following summarizes the redemption feature, location and related accounting within the Condensed Consolidated Balance Sheets for these joint venture arrangements: Type of Joint Venture Arrangement Location within the Condensed Consolidated Balance Sheets Recorded Value Joint ventures with no redemption feature Permanent equity Carrying value Joint ventures with option to require the Company to purchase the noncontrolling interest - not currently redeemable or redemption not probable Temporary equity Carrying value Deferred Income Tax Accounts and Tax Reserves We are subject to income taxes in the United States and several foreign jurisdictions. Management judgment is required in determining the provision for income taxes and the related assets and liabilities. The provision for income taxes includes income taxes paid, currently payable or receivable and those deferred. We use an estimated annual effective rate based on expected annual income to determine our quarterly provision for income taxes. The effective income tax rate includes the estimated domestic state effective income tax rate and applicable foreign income tax rates. The effective income tax rate is also impacted by various permanent items and credits, net of any related valuation allowances, and can vary based on changes in estimated annual income. Discrete items are recorded in the quarter in which they occur. Our effective income tax rates were 28.2 % and 31.0 % for the three and nine months ended September 28, 2025, respectively, as compared to an income tax rate of 23.5 % and 26.8 % for the prior year comparable periods, respectively. The higher effective tax rates during 2025 were primarily due to lower pretax book income and larger tax shortfall generated by vesting of restricted shares. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences reverse. Deferred tax assets and liabilities are netted by tax jurisdiction. Deferred tax assets are also recognized for the estimated future effects of tax attribute carryforwards (e.g., net operating losses, capital losses, and foreign tax credits). The effect on deferred taxes due to changes in tax rates is recognized in the period in which the new tax rate is enacted. Valuation allowances are established when necessary on a jurisdictional basis to reduce deferred tax assets to the amounts we expect to realize. Deferred tax assets and liabilities are recorded within Other assets and Other long-term liabilities on the Condensed Consolidated Balance Sheets. Tax authorities periodically audit the Company. We record reserves and related interest and penalties for identified exposures as income tax expense. We evaluate these issues on a quarterly basis to adjust for events, such as statute of limitations expirations, court rulings or audit settlements, which may impact our ultimate payment for such exposures. 8 Fair Value Measurements and Disclosures The Company determines the fair value of financial assets and liabilities based on the price that would be received to sell the asset or paid to transfer the liability to a market participant. Certain assets and liabilities are measured at fair value on a recurring basis and are required to be classified and disclosed in one of the following three categories: • Level 1: Quoted market prices in active markets for identical assets or liabilities. • Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. • Level 3: Unobservable inputs that are not corroborated by market data. Fair value is a market-based measurement, not an entity-specific measurement. Considerable judgment is required to interpret market data to estimate fair value; accordingly, the fair values presented do not necessarily indicate what the Company or its debtholders could realize in a current market exchange. Our financial assets and liabilities that were measured at fair value on a recurring basis as of September 28, 2025 and December 29, 2024 are as follows: Fair Value Measurements (In thousands) Carrying Value Level 1 Level 2 Level 3 September 28, 2025 Financial assets: Cash surrender value of life insurance policies (a) $ 28,714 $ 28,714 $ — $ — Interest rate swaps (b) $ 62 $ — $ 62 $ — Financial liabilities: Interest rate swaps (b) $ 770 $ — $ 770 $ — December 29, 2024 Financial assets: Cash surrender value of life insurance policies (a) $ 30,775 $ 30,775 $ — $ — Financial liabilities: Interest rate swaps (b) $ 161 $ — $ 161 $ — ___________________________________ (a) Represents life insurance policies held in our non-qualified deferred compensation plan, which are classified as Other assets on the Condensed Consolidated Balance Sheets (b) The fair value of our interest rate swaps is based on the sum of all future net present value cash flows. The future cash flows are derived based on the terms of our interest rate swaps, as well as considering published discount factors, and projected Secured Overnight Financing Rates (“SOFR”). See “Note 8. Debt” for further discussion. There were no transfers among levels within the fair value hierarchy during the three and nine months ended September 28, 2025 or fiscal year 2024. The fair value of certain assets and liabilities approximates carrying value because of the short-term nature of the accounts, including cash and cash equivalents, accounts receivable, net of allowances, and accounts payable. The carrying value of notes receivable, net of allowances, also approximates fair value. The Company’s revolving credit facilities and term loan borrowings under the Company’s credit agreement approximate carrying value due to their variable market-based interest rate. See “Note 8. Debt” for further discussion on the amendment to our credit agreement executed during the first quarter of 2025. The Company’s 3.875 % senior notes are classified as a Level 2 fair value measurement since the Company 9 estimates the fair value by using recent trading transactions, and have the following estimated fair values and carrying values (excluding the impact of unamortized debt issuance costs) as of September 28, 2025 and December 29, 2024: September 28, 2025 December 29, 2024 (In thousands) Carrying Value Fair Value Carrying Value Fair Value 3.875 % Senior Notes $ 400,000 $ 382,000 $ 400,000 $ 356,000 Allowance for Credit Losses Estimates of expected credit losses, even if remote, are based upon historical account write-off trends, facts about the current financial condition of the debtor, forecasts of future operating results based upon current trends of select operating metrics, and macroeconomic factors. Credit quality is monitored through the timing of payments compared to the prescribed payment terms and known facts regarding the financial condition of the franchisee or customer. Account and note balances are charged against the allowance after recovery efforts have ceased. The following table summarizes changes in our allowances for credit losses for accounts receivable and notes receivable: (In thousands) Accounts Receivable Notes Receivable Balance at December 29, 2024 $ 8,468 $ 15,238 Current period provision for expected credit losses, net 3,611 2,058 Write-offs charged against the allowance ( 1,240 ) — Balance at September 28, 2025 $ 10,839 $ 17,296 Impairment of Long-lived Assets The Company evaluates its property and equipment and other long-lived assets for potential indicators of impairment at least annually, or as facts and circumstances arise that indicate the carrying value of the asset group may not be recoverable. For Domestic Company-owned restaurants, the evaluation is performed at the operating market level while International Company-owned restaurants are evaluated at the restaurant level as these respective levels represent the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. If the carrying amount of the long-lived asset group exceeds the amount of estimated future undiscounted cash flows, the fair value of the asset group is estimated and an impairment loss is recorded if the carrying value exceeds the estimated fair value. The assumptions used in the undiscounted cash flow calculation related to future growth are subjective and may be negatively impacted by future changes in operating performance or economic conditions. During 2025, the Company has been developing and beta testing a new omnichannel experience, including new customer-facing technology such as new apps on the Android and iOS platforms and a new web experience. Based on the Company's progress during the three months ended September 28, 2025, including releasing the new apps to both Android and iOS users, the Company reassessed the remaining useful lives of certain legacy omnichannel and other technology long-lived assets and recognized $ 6.1 million in accelerated depreciation charges. Tornado Impact During the first quarter of 2025, a tornado caused real and personal property damage to the Company’s leased Quality Control Center (“QC Center”) in Grand Prairie, Texas. The Company recorded pre-tax expenses of $ 0.9 million during the nine months ended September 28, 2025, related to these damages, which primarily reflect operating lease right-of-use asset impairment charges related to the leased property offset by expected property-related insurance proceeds. Expenses incurred and the related anticipated insurance proceeds were recorded within General and administrative expenses in the Condensed Consolidated Statements of Operations. During the second quarter of 2025, a tornado caused real and personal property damage to the Company’s restaurant support center and QC Center in Louisville, Kentucky. The Company recorded asset impairment charges of $ 2.7 million and incurred additional operating expenses of $ 1.6 million during the nine months ended September 28, 2025, for which 10 we recorded an anticipated insurance recovery as we believe such losses are probable of recovery under our insurance policy. The Company received $ 4.0 million of insurance proceeds related to the two incidents during the nine months ended September 28, 2025, of which $ 3.3 million were classified as cash inflows from investing activities and $ 0.7 million were classified as cash inflows from operating activities based on the nature of the underlying losses and expected usage of the proceeds. To the extent that proceeds received from our insurer in future periods exceed losses recognized in the financial statements, we may record income within our Condensed Consolidated Statements of Operations once such insurance proceeds are realized or realizable. Neither of the tornadoes had a significant impact on our operations, as our other QC Centers were able to ensure that restaurants were adequately supplied. Recent Accounting Pronouncements Accounting Standards Not Yet Adopted In December 2023, the FASB issued ASU 2023-09, “ Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The ASU provides for additional levels of details within the required rate reconciliation table to include additional categories of information about federal, state, and foreign income taxes and requires entities to further disaggregate information about income taxes paid, net of refunds. The ASU is effective for fiscal years beginning after December 15, 2024, and shall be applied prospectively. The Company is finalizing its assessment of the additional disclosure requirements and does not expect the adoption to have a material impact on its financial position or results of operations. In November 2024, the FASB issued ASU No. 2024-03, “ Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” The ASU includes required disclosures in the notes to the consolidated financial statements of specific information about certain costs and expenses. The amendments are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted and the standard may be applied either prospectively or retrospectively. The Company is in the process of assessing the impact of the new standard, including an evaluation of the Company’s financial systems and availability of data to meet the requirements. In September 2025, the FASB issued ASU 2025-06, “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software”. The ASU modernizes the accounting guidance for costs incurred to develop software for internal use by removing references to project stages of a software development project, which better aligns with current software development methods. Under the new standard, entities will commence capitalizing eligible costs when management has authorized and committed to funding the software project, and when it is probable that the project will be completed and the software will be used to perform the function intended. The amendments are effective for annual periods beginning after December 15, 2027, and interim periods within those fiscal years. The guidance can be applied using a prospective, retrospective, or modified transition approach. The Company is currently evaluating the impact of this accounting standard to its consolidated financial statements. 3. Leases Lessor Operating Leases The Company subleases certain retail space to our franchisees in the UK, which are primarily operating leases. At September 28, 2025, we leased and subleased approximately 340 Papa Johns restaurants to franchisees in the UK. The initial lease terms on the franchised sites in the UK are generally 15 years. The Company has the option to negotiate an extension toward the end of the lease term at the landlord’s discretion. The initial lease terms of the franchisee subleases are generally five to ten years . Rental income, primarily derived from properties leased and subleased to franchisees in the UK, is recognized on a straight-line basis over the respective operating lease terms. The Company recognized total sublease income of $ 2.4 million and $ 7.8 million for the three and nine months ended September 28, 2025, respectively, and $ 2.7 million and $ 7.1 million for the three and nine months ended September 29, 2024, respectively, within Other revenues in the Condensed Consolidated Statements of Operations. Lease Guarantees As a result of assigning our interest in obligations under property leases as a condition of the refranchising of certain restaurants, we are contingently liable for payment of approximately 70 Domestic leases. These leases have varying terms, the latest of which expires in 2036. As of September 28, 2025, the estimated maximum amount of undiscounted payments 11 the Company could be required to make in the event of nonpayment by the primary lessees was $ 8.9 million. This contingent liability is not included in the Condensed Consolidated Balance Sheets as it is not probable to occur. The fair value of the guarantee is not material. Supplemental Cash Flow & Other Information Supplemental cash flow information related to leases for the periods reported is as follows: Nine Months Ended (In thousands) September 28, 2025 September 29, 2024 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 1,626 $ 1,096 Financing cash flows from finance leases 7,455 6,778 Operating cash flows from operating leases (a) 31,593 30,045 Right-of-use assets obtained in exchange for new finance lease liabilities 15,738 3,809 Right-of-use assets obtained in exchange for new operating lease liabilities 17,785 60,120 Cash received from sublease income 7,768 5,287 ___________________________________ (a) Included within the change in Other assets and liabilities within the Condensed Consolidated Statements of Cash Flows offset by non-cash operating lease right-of-use asset amortization and lease liability accretion. 4. Papa John’s Marketing Fund, Inc. PJMF, which is a consolidated VIE where the Company has been identified as the primary beneficiary, collects a percentage of revenues from Company-owned and franchised restaurants in the United States for the purpose of designing and administering advertising and promotional programs for all participating Domestic restaurants. Contributions and expenditures are reported on a gross basis in the Condensed Consolidated Statements of Operations within Advertising funds revenue and Advertising funds expense, respectively. PJMF also has a wholly-owned subsidiary, Papa Card, Inc., which administers the Company’s gift card programs. 12 Assets and liabilities of PJMF, which are utilized solely for the Company’s advertising and promotional programs, were as follows in the Condensed Consolidated Balance Sheets: (In thousands) September 28, 2025 December 29, 2024 Assets Current assets: Cash and cash equivalents $ 15,476 $ 12,038 Accounts receivable, net 15,550 17,854 Prepaid expenses and other current assets 7,780 2,683 Total current assets 38,806 32,575 Deferred income taxes 1,019 1,019 Other assets 67 122 Total assets $ 39,892 $ 33,716 Liabilities Current liabilities: Income and other taxes payable 24 298 Accrued expenses and other current liabilities 36,781 30,324 Current deferred revenue 4,184 4,911 Total current liabilities 40,989 35,533 Deferred revenue 2,314 2,783 Total liabilities $ 43,303 $ 38,316 5. Revenue Recognition Contract Balances Our contract liabilities primarily relate to franchise fees, unredeemed gift card liabilities, and loyalty program obligations, which we classify within Current deferred revenue and Deferred revenue on the Condensed Consolidated Balance Sheets. During the three and nine months ended September 28, 2025, the Company recognized $ 8.2 million and $ 25.9 million in revenue, respectively, related to deferred revenue compared to $ 7.8 million and $ 24.1 million, respectively, for the three and nine months ended September 29, 2024. The following table includes a breakout of contract liability balances: (In thousands) September 28, 2025 December 29, 2024 Change Unearned franchise fees and royalties $ 19,592 $ 21,860 $ ( 2,268 ) Unredeemed gift card liabilities 6,498 7,694 ( 1,196 ) Customer loyalty program obligations 5,069 7,252 ( 2,183 ) Total contract liabilities $ 31,159 $ 36,806 $ ( 5,647 ) Our contract assets consist primarily of equipment incentives provided to franchisees. Equipment incentives are related to the future value of commissary revenue the Company will receive over the term of the incentive agreement. Contract assets were approximately $ 17.1 million and $ 16.6 million, respectively, at September 28, 2025, and December 29, 2024. Revenue was reduced by approximately $ 2.1 million and $ 5.5 million for the three and nine months ended September 28, 2025, and approximately $ 1.3 million and $ 4.0 million for the three and nine months ended September 29, 2024, respectively, for the amortization of contract assets over the applicable contract terms. Contract assets are included in Prepaid expenses and other current assets and Other assets on the Condensed Consolidated Balance Sheets. 13 Transaction Price Allocated to the Remaining Performance Obligations The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied at the end of the reporting period: Performance Obligations by Period (In thousands) Less than 1 Year 1-2 Years 2-3 Years 3-4 Years 4-5 Years Thereafter Total Unearned franchise fees and royalties $ 3,186 $ 2,847 $ 2,600 $ 2,373 $ 2,154 $ 4,132 $ 17,292 At September 28, 2025, approximately $ 2.3 million of area development fees related to unopened restaurants and International unearned franchise fees are included in Deferred revenue. Timing of revenue recognition is dependent upon the timing of restaurant openings and franchisees’ revenues. Unredeemed gift card liabilities, which are included in Deferred revenue, will be recognized in Company-owned restaurant sales when gift cards are redeemed. The Company will recognize redemption fee revenue in Other revenues when cards are redeemed at franchised restaurant locations. 6. Common Stock Shares Authorized and Outstanding The Company has authorized 100.0 million shares of common stock as of September 28, 2025 and December 29, 2024. The Company’s outstanding shares of common stock, net of repurchased shares of common stock held as treasury stock, were 32.8 million shares at September 28, 2025, compared to 32.6 million shares at December 29, 2024. Share Repurchase Program On October 28, 2021, our Board of Directors approved a share repurchase program with an indefinite duration for up to $ 425.0 million of the Company’s common stock. There was no share repurchase activity during the three and nine months ended September 28, 2025 or September 29, 2024. Approximately $ 90.2 million remained available under the Company’s share repurchase program as of September 28, 2025. The timing and volume of share repurchases under the Company’s share repurchase programs may be executed at the discretion of management on an opportunistic basis, subject to market and business conditions, regulatory requirements and other factors, or pursuant to trading plans or other arrangements. Repurchases under the programs may be made through open market, block, and privately negotiated transactions, including Rule 10b5-1 plans, at times and in such amounts as management deems appropriate. Repurchases under the Company’s share repurchase programs may be commenced or suspended from time to time at the Company’s discretion without prior notice. Funding for the share repurchase programs will be provided through our credit facility, operating cash flow and cash and cash equivalents. Dividends The Company paid aggregate cash dividends of approximately $ 45.8 million ($ 1.38 per share) for the nine months ended September 28, 2025. On October 29, 2025, our Board of Directors declared a fourth quarter dividend of $ 0.46 per common share (approximately $ 15.4 million in the aggregate), which will be paid on November 28, 2025 to stockholders of record as of the close of business on November 17, 2025. The declaration and payment of any future dividends will be at the discretion of our Board of Directors. 7. Earnings per Share We compute earnings per share using the two-class method. The two-class method requires an earnings allocation formula that determines earnings per share for common shareholders and participating security holders according to dividends declared and participating rights in undistributed earnings. Time-based restricted stock awards are participating securities because holders of such unvested shares have rights to receive non-forfeitable dividends. Under the two-class method, total dividends provided to the holders of participating securities are subtracted from net income attributable to the Company to determine net income attributable to common shareholders. The Company may, at its sole discretion, require any dividends 14 paid on the unvested restricted stock awards to be paid in shares rather than in cash, which could then be forfeited if the employee forfeits the underlying awards. Basic earnings per common share are computed by dividing net income attributable to common shareholders by the weighted-average common shares outstanding. Diluted earnings per common share are computed by dividing the net income attributable to common shareholders by the diluted weighted average common shares outstanding. Diluted weighted average common shares outstanding consist of basic weighted average common shares outstanding plus weighted average awards outstanding under our equity compensation plans, which are dilutive securities. 15 The calculations of basic and diluted earnings per common share are as follows (in thousands, except per share data): Three Months Ended Nine Months Ended September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024 Calculation of net income attributable to common shareholders Net income attributable to the Company $ 4,707 $ 41,808 $ 23,460 $ 68,687 Net income attributable to participating securities ( 260 ) — ( 718 ) — Net income attributable to common shareholders $ 4,447 $ 41,808 $ 22,742 $ 68,687 Basic earnings per common share Basic weighted average common shares outstanding 32,889 32,745 32,834 32,701 Basic earnings per common share $ 0.14 $ 1.28 $ 0.69 $ 2.10 Diluted earnings per common share Weighted average common shares outstanding 32,889 32,745 32,834 32,701 Dilutive effect of outstanding equity awards (a) 154 185 128 149 Diluted weighted average common shares outstanding 33,043 32,930 32,962 32,850 Diluted earnings per common share $ 0.13 $ 1.27 $ 0.69 $ 2.09 ___________________________________ (a) Excludes 85,000 and 259,000 shares underlying equity awards for the three and nine months ended September 28, 2025 and 345,000 and 384,000 shares underlying awards for the three and nine months ended September 29, 2024, respectively, as the effect of including such awards would have been anti-dilutive. 8. Debt Long-term debt, net, consists of the following (in thousands): September 28, 2025 December 29, 2024 Senior Notes $ 400,000 $ 400,000 Term Loan 200,000 — Revolving Facilities 136,690 346,732 Outstanding debt $ 736,690 $ 746,732 Unamortized debt issuance costs ( 7,055 ) ( 5,082 ) Current portion of long-term debt ( 2,500 ) — Total long-term debt, net $ 727,135 $ 741,650 Senior Notes On September 14, 2021, the Company issued $ 400.0 million of 3.875 % Senior Notes (the “Notes”) which mature on September 15, 2029. Interest on the Notes is payable semi-annually in cash in arrears on March 15 and September 15 of each year at a fixed interest rate of 3.875 % per annum. Refer to Note 12 of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 29, 2024 for further description of the provisions and covenant requirements under the Senior Notes. Term Loan and Revolving Facilities On March 26, 2025, the Company amended and restated the Amended and Restated Credit Agreement, dated as of September 14, 2021 and amended May 30, 2023 (together, the “Previous Credit Agreement”) pursuant to the Second Amended and Restated Credit Agreement dated as of March 26, 2025 (the “Second Amended and Restated Credit Agreement”). The Second Amended and Restated Credit Agreement provides for a senior secured term loan in a principal amount of $ 200.0 million (the “Term Loan”) and a senior secured revolving credit facility in an aggregate available principal amount of $ 600.0 million (the “PJI Revolving Facility” together with the Term Loan, the “PJI Credit Facilities”), of which up to $ 40.0 million is available as swingline loans and up to $ 80.0 million as letters of credit. The PJI Credit 16 Facilities will mature on March 26, 2030 (the “Maturity Date”) with term loans amortizing in quarterly installments commencing on June 30, 2026 in amounts as set forth in the Second Amended and Restated Credit Agreement and the unpaid balance maturing on the Maturity Date. The remaining availability under the PJI Revolving Facility was approximately $ 463.3 million as of September 28, 2025. The Term Loan was advanced in full at the closing of the Second Amended and Restated Credit Agreement, with the proceeds used to repay borrowings outstanding under the senior secured revolving credit facility under the Previous Credit Agreement. The Company incurred $ 3.2 million of lender and third-party fees, which are being amortized into Net interest expense over the term of the Second Amended and Restated Credit Agreement. The covenant requirements under the Second Amended and Restated Credit Agreement remain in place and are similar to the terms of the Previous Credit Agreement; refer to Note 12 of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 29, 2024 for further description of covenant terms under the Previous Credit Agreement. PJMF Revolving Facility PJMF has a $ 30.0 million revolving line of credit (the “PJMF Revolving Facility”) pursuant to a Revolving Loan Agreement, dated September 30, 2015, and most recently amended on September 30, 2025. The PJMF Revolving Facility is secured by substantially all assets of PJMF. The PJMF Revolving F acility matures on September 30, 2026, but is subject to annual renewals. The borrowings under the PJMF Revolving Facility accrue interest at a variable rate of a one month SOFR plus 1.975 %. The Company did no t have any borrowings under the PJMF Revolving Facility as of September 28, 2025 or December 29, 2024. The PJMF operating results and the related debt outstanding do not impact the financial covenants under the Company’s Second Amended and Restated Credit Agreement. Derivative Financial Instruments The Company has historically entered into interest rate swaps with the objective of mitigating the Company’s exposure to the impact of interest rate changes associated with our variable rate debt under the PJI Credit Facilities. As of September 28, 2025, we had the following interest rate swap agreements: Effective Dates Floating Rate Debt Fixed Rates April 29, 2025 through April 25, 2028 $ 50 million 3.49 % June 30, 2025 through June 30, 2028 $ 50 million 3.72 % We have designated the interest rate swaps as cash flow hedges and assess hedge effectiveness on a quarterly basis. The interest rate swaps are recorded at fair value at each reporting date, and any unrealized gains or losses are included in Accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets and reclassified to Net interest expense in the Condensed Consolidated Statements of Operations in the same period or periods during which the hedged transaction affect earnings. The following table provides information on the location and amounts of our current swaps in the accompanying Condensed Consolidated Balance Sheets (in thousands): Interest Rate Swap Derivatives Balance Sheet Location Fair Value September 28, 2025 Fair Value December 29, 2024 Prepaid and other current assets $ 62 $ — Accrued expenses and other current liabilities $ 33 $ 161 Other long-term liabilities $ 737 $ — 17 The effect of derivative instruments on the accompanying condensed consolidated financial statements is as follows (in thousands): Derivatives - Cash Flow Hedging Relationships Amount of Gain or (Loss) Recognized in AOCL on Derivative Location of (Loss) or Gain Reclassified from AOCL into Income Amount of (Loss) or Gain Reclassified from AOCL into Income Net Interest Expense on Condensed Consolidated Statements of Operations Interest rate swaps for the three months ended: September 28, 2025 $ ( 65 ) Interest expense $ 158 $ ( 9,945 ) September 29, 2024 $ ( 820 ) Interest expense $ 194 $ ( 10,629 ) Interest rate swaps for the nine months ended: September 28, 2025 $ ( 423 ) Interest expense $ 117 $ ( 30,608 ) September 29, 2024 $ ( 80 ) Interest expense $ 591 $ ( 32,588 ) Net interest paid, including payments made or received under the swaps, was $ 11.4 million and $ 34.6 million for the three and nine months ended September 28, 2025, respectively, and $ 13.9 million and $ 34.3 million for the three and nine months ended September 29, 2024, respectively. 18 9. Restructuring International Restructuring In December 2023, the Company announced international transformation initiatives (the “International Transformation Plan”) designed to evolve our business structure to deliver an enhanced value proposition to our International customers and franchisees, ensure targeted investments and efficient resource management, and better position our largest markets, including the UK, for long-term profitable growth and brand strength. During fiscal 2023 and 2024, the Company implemented approved initiatives under the International Transformation Plan related to establishing new regional hubs across APAC (Asia Pacific), EMEA (Europe, Middle East and Africa), and Latin America. During 2024, the Company commenced the next phase of the International Transformation Plan, which involved strategic restaurant closures and divestitures in the UK in order to optimize the Company’s UK restaurant portfolio and improve overall profitability by closing unprofitable locations and mitigating remaining occupancy costs at closed locations, as well as enhancing profitability across the remaining portfolio of Company-owned restaurants. Execution on this phase resulted in the closure of 43 underperforming UK Company-owned restaurants and 32 franchised locations during 2024 and 2025. We recognized impairment charges of $ 1.1 million and $ 10.1 million during the three and nine months ended September 29, 2024, respectively, for the amount by which the carrying value exceeded the estimated fair value of the asset groups. During 2024, the Company also completed the refranchising of 60 formerly Company-owned restaurants to primarily existing franchisees. We have completed substantially all of the strategic restaurant closures in the UK market and the Company’s efforts during 2025 have turned towards growth opportunities and mitigating closure-related costs as we complete optimization of the portfolio. The following table summarizes restructuring related costs recorded for the three and nine months ended September 28, 2025 and September 29, 2024 (in thousands): Three Months Ended Nine Months Ended September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024 Professional services and other related costs $ 416 $ 2,029 $ 2,630 $ 4,730 Loss on franchisee notes receivable ( 10 ) 171 2,151 1,735 Long-lived asset impairment charges 33 1,145 834 10,121 Lease terminations and other lease related costs ( 215 ) 426 ( 775 ) 732 Employee termination costs 7 98 22 542 Loss on refranchising Company-owned restaurants — 7 — 1,744 Total international transformation costs $ 231 $ 3,876 $ 4,862 $ 19,604 Stock-based compensation expense/(forfeitures on unvested awards) — ( 14 ) ( 21 ) ( 90 ) Total international transformation costs, inclusive of stock-based award expense/forfeitures $ 231 $ 3,862 $ 4,841 $ 19,514 The Company has incurred total restructuring related costs of $ 34.3 million since commencement of the International Transformation Plan, all of which were included in General and administrative expenses in the Condensed Consolidated Statements of Operations. Total estimated pre-tax costs associated with the International Transformation Plan are approximately $ 35 million (inclusive of the $ 34.3 million incurred through the third quarter of 2025), substantially all of which will be recorded within our International segment, and we expect to incur the remainder of these costs through 2025. 19 The following table presents changes in the balance of accrued expenses relating to approved initiatives, which are recorded in Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets (in thousands): Employee termination costs Professional services and other related costs Lease terminations and other lease related costs Total Balance as of December 29, 2024 $ 133 $ 2,335 $ 2,073 $ 4,541 Charges 22 2,630 — 2,652 Payments ( 136 ) ( 4,577 ) ( 1,149 ) ( 5,862 ) Balance as of September 28, 2025 $ 19 $ 388 $ 924 $ 1,331 10. Litigation, Commitments and Contingencies Litigation The Company is involved in a number of lawsuits, claims, investigations and proceedings, including those specifically identified below, consisting of intellectual property, employment, consumer, commercial and other matters arising in the ordinary course of business. In accordance with ASC 450, “ Contingencies, ” the Company has made accruals with respect to these matters, where appropriate, which are reflected in the Company’s condensed consolidated financial statements. We review these provisions at least quarterly and adjust these provisions to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. In re Papa John’s Employee & Franchise Employee Antitrust Litigation is a putative class action filed in December 2018 in the United States District Court for the Western District of Kentucky. The suit alleges that the “no-poaching” provision previously contained in the Company’s franchise agreement constituted an unlawful agreement or conspiracy in restraint of trade and commerce in violation of Section 1 of the Sherman Antitrust Act. On April 14, 2022, the parties reached a settlement in principle to resolve the case. Pursuant to the terms of the proposed settlement, in exchange for the Company’s payment of a total aggregate settlement amount of $ 5.0 million and other non-monetary consideration, all claims in the action will be dismissed, the litigation will be terminated, and the Company will receive a release. The settlement amount was recorded in General and administrative expenses in the Condensed Consolidated Statements of Operations in the first quarter of 2022. The District Court granted preliminary approval of the proposed settlement on August 2, 2025, and the Company made an initial payment of $ 2.5 million on September 5, 2025 towards the settlement with $ 2.5 million remaining accrued within Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets as of September 28, 2025. The proposed settlement contains certain customary contingencies and is subject to final approval by the District Court. The Company continues to deny any liability or wrongdoing in this matter. 20 11. Divestitures Anticipated Sale of Joint Venture On July 18, 2025, the Company entered into an asset purchase agreement (the “Purchase Agreement”) to sell its 70 % interest in a consolidated joint venture that currently operates 85 Domestic Company-owned restaurants. The total purchase price for the 85 restaurants was approximately $ 35 million, which does not include transaction costs and is subject to customary post-closing adjustments under the terms of the Purchase Agreement. We expect to receive cash proceeds of approximately $ 25 million for our 70 % interest and the sale is expected to close during the fourth quarter of 2025, at which point the restaurants formerly subject to the joint venture will convert to franchised locations. The assets and liabilities associated with the sale of the joint venture are classified as held for sale in the Condensed Consolidated Balance Sheets as of September 28, 2025. September 28, 2025 Current assets $ 1,317 Property and equipment, net 5,229 Operating lease right-of-use assets, net 14,972 Finance lease right-of-use assets, net 395 Goodwill 9,036 Total assets held for sale $ 30,949 Current deferred revenue $ 936 Current finance lease liabilities 13 Current operating lease liabilities 3,874 Long-term finance lease liabilities 380 Long-term operating lease liabilities 10,831 Total liabilities held for sale $ 16,034 The Company incurred transaction costs of $ 0.5 million during the three months ended September 28, 2025 related to the sale, which were recorded within General and administrative expenses in the Condensed Consolidated Statements of Operations. We expect to record a pre-tax gain on sale between $ 15 million and $ 20 million upon closing of the sale, which is net of estimated transaction costs and subject to change based on settlement of certain post-closing adjustments. Sale-Leaseback of Texas and Florida Quality Control Centers On August 2, 2024, the Company finalized the sale and subsequent leaseback of two Domestic QC Centers in Texas and Florida for an aggregate purchase price of $ 46.7 million. Under the terms of the leases, each of which commenced on August 2, 2024, we will lease the QC Centers for 17 years with two five-year renewal options. The Company will pay annual rents under the operating leases of the Texas and Florida QC Centers of $ 2.0 million and $ 1.0 million, respectively, for the first year with annual rents increasing by 2.75 % thereafter. During the three months ended September 29, 2024, we recorded a pre-tax gain on sale of approximately $ 41.3 million, net of transaction costs, which was recorded within General and administrative expenses in the Condensed Consolidated Statements of Operations, and sales proceeds of $ 46.7 million were recorded as investing cash inflows in the Condensed Consolidated Statements of Cash Flows. Refranchising Loss On September 30, 2024, the Company refranchised 15 Domestic Company-owned restaurants to an existing franchisee for a purchase price of approximately $ 2.6 million. In connection with the divestiture, we recorded non-cash charges of $ 1.5 million and $ 5.5 million during the three and nine months ended September 29, 2024, to remeasure the net assets within the disposal group to fair value, less estimated costs to sell. The remeasurement charges were recorded within General and administrative expenses in the Condensed Consolidated Statements of Operations. 21 12. Segment Information We have four reportable segments: Domestic Company-owned restaurants, North America franchising, North America commissaries, and International operations. The Domestic Company-owned restaurants segment consists of the operations of all Domestic Company-owned restaurants and principally generates revenues from retail sales of pizza and other food and beverage products. The North America franchising segment consists of our franchise sales and support activities and derives its revenues from sales of franchise and development rights and the collection of royalties from our franchisees located in the United States and Canada. The North America commissaries segment consists of the operations of our regional dough production and product distribution centers in the United States and Canada and derives its revenues principally from the sale and distribution of food and paper products to Domestic Company-owned and franchised restaurants in the United States and Canada. The International segment consists of the operations of all Company-owned restaurants located in the UK, as well as distribution sales to franchised Papa Johns restaurants located in the UK and our franchise sales and support activities, which derive revenues from sales of franchise and development rights and the collection of royalties from our International franchisees. International franchisees are defined as all franchise operations outside of the United States and Canada. Our reportable segments are distinct business units that provide different products or services. Separate management of each segment is required because each business unit is subject to different operational issues and strategies. Certain administrative and capital costs are allocated to each of our segments based upon predetermined rates or estimated resource usage. All other business units that do not meet the quantitative or qualitative thresholds for determining reportable segments, which are not operating segments, we refer to as “All Other”. These consist of operations that derive revenues from franchise contributions to marketing funds and information systems and related services used in restaurant operations, including our point-of-sale system, online and other technology-based ordering platforms. Our chief operating decision maker (“CODM”) is the Chief Executive Officer. Beginning in the first quarter of 2025, the Company updated its measure of segment profit or loss to be adjusted EBITDA, which aligns with how the CODM evaluates performance of and allocates resources to our segments. For comparability purposes, segment results for the prior year period have been recast to reflect this change in measure of segment profit or loss. Adjusted EBITDA represents Net income before Net interest expense, Income tax expense, Depreciation and amortization, Stock-based compensation expense, and other adjustments that vary from period to period, including certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business. During the annual budget and forecasting process, the CODM uses adjusted EBITDA to allocate resources (including employees, property, and financial or capital resources) to the segments. The CODM regularly reviews trends in adjusted EBITDA on at least a quarterly basis to evaluate the profitability of the segments and to make resource allocation decisions. When our CODM reviews balance sheet information, it is at a consolidated level. 22 Segment Results The tables below present our operating results by segment (in thousands). The significant expense categories and amounts presented in the tables below align with the segment-level information that is regularly provided to the CODM. A reconciliation to Company results is included in the following section. Three Months Ended September 28, 2025 Domestic Company-Owned Restaurants North America Franchising North America Commissaries International Total Revenues from external customers $ 165,194 $ 33,797 $ 209,403 $ 44,721 $ 453,115 Intersegment revenues — 1,161 50,086 — 51,247 Segment revenue $ 165,194 $ 34,958 $ 259,489 $ 44,721 $ 504,362 Less segment expenses (a) : COS - Product Costs $ 49,836 $ — $ 186,617 $ 13,426 $ 249,879 COS - Salaries & Benefits 55,124 — 31,052 1,941 88,117 COS - Other (d) 45,957 — 16,779 8,677 71,413 General & Administrative 10,335 9,452 5,839 10,858 36,484 Other Segment Expenses (c) — — — 4,519 4,519 Segment adjusted EBITDA $ 3,942 $ 25,506 $ 19,202 $ 5,300 $ 53,950 Three Months Ended September 29, 2024 Domestic Company-Owned Restaurants North America Franchising North America Commissaries International Total Revenues from external customers $ 168,672 $ 33,831 $ 210,389 $ 39,098 $ 451,990 Intersegment revenues — 1,011 52,063 — 53,074 Segment revenue $ 168,672 $ 34,842 $ 262,452 $ 39,098 $ 505,064 Less segment expenses (a) : COS - Product Costs $ 52,953 $ — $ 191,868 $ 12,996 $ 257,817 COS - Salaries & Benefits 56,554 — 29,307 1,615 87,476 COS - Other (d) 45,577 — 16,118 7,208 68,903 General & Administrative (b) 9,234 8,181 8,473 9,944 35,832 Other Segment Expenses (c) — — — 3,284 3,284 Segment adjusted EBITDA $ 4,354 $ 26,661 $ 16,686 $ 4,051 $ 51,752 23 Nine Months Ended September 28, 2025 Domestic Company-Owned Restaurants North America Franchising North America Commissaries International Total Revenues from external customers $ 511,786 $ 104,708 $ 637,168 $ 128,016 $ 1,381,678 Intersegment revenues — 3,664 154,356 — 158,020 Segment revenue $ 511,786 $ 108,372 $ 791,524 $ 128,016 $ 1,539,698 Less segment expenses (a) : COS - Product Costs $ 155,169 $ — $ 566,640 $ 37,645 $ 759,454 COS - Salaries & Benefits 170,305 — 91,095 5,473 266,873 COS - Other (d) 136,441 — 49,439 25,116 210,996 General & Administrative 31,033 28,776 26,145 28,983 114,937 Other Segment Expenses (c) — — — 14,479 14,479 Segment adjusted EBITDA $ 18,838 $ 79,596 $ 58,205 $ 16,320 $ 172,959 Nine Months Ended September 29, 2024 Domestic Company-Owned Restaurants North America Franchising North America Commissaries International Total Revenues from external customers $ 518,103 $ 103,937 $ 611,873 $ 132,318 $ 1,366,231 Intersegment revenues — 3,101 151,633 — 154,734 Segment revenue $ 518,103 $ 107,038 $ 763,506 $ 132,318 $ 1,520,965 Less segment expenses (a) : COS - Product Costs $ 154,441 $ — $ 555,264 $ 39,224 $ 748,929 COS - Salaries & Benefits 170,532 — 87,799 12,118 270,449 COS - Other (d) 131,478 — 45,028 31,541 208,047 General & Administrative (b) 28,884 24,662 26,511 28,258 108,315 Other Segment Expenses (c) — — — 9,219 9,219 Segment adjusted EBITDA $ 32,768 $ 82,376 $ 48,904 $ 11,958 $ 176,006 ___________________________________ (a) Segment expenses exclude Depreciation and amortization, Stock-based compensation expense, and certain General and Administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business (see reconciliation that follows). (b) The Company prospectively adjusted for updates in internal cost allocation methodologies in our Annual Report on Form 10-K for the year ended December 29, 2024, which increased the amount of internal general and administrative expenses allocated to the segments from Unallocated corporate expenses. These methodology updates have been reflected in the 2024 comparable results. Refer to Note 23 of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 29, 2024 for additional information. (c) Other Segment Expenses represent all operating expenses that are not included in the significant segment expense categories. The components of Other Segment Expenses are advertising fund expenses and other operating expenses. (d) We have included “COS - Other” as a significant expense category beginning in the first quarter of 2025, consistent with the segment expense categories regularly provided to the CODM when evaluating segment performance and allocating resources. “COS - Other” includes delivery expenses, Company-owned restaurant advertising costs, insurance, rent, aggregator fees, and other costs of sales. For comparability purposes, we have recast quarterly 2024 segment results to include this expense category. 24 Reconciliation of Segment Results to Company Results The following table reconciles total revenue from our segments to Total revenues and total adjusted EBITDA from our segments to Income before income taxes (in thousands): Three Months Ended Nine Months Ended September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024 Total Segment revenue $ 504,362 $ 505,064 $ 1,539,698 $ 1,520,965 All Other Revenue (a) 68,866 68,289 216,958 202,808 Elimination of intersegment revenue ( 65,074 ) ( 66,546 ) ( 201,027 ) ( 195,156 ) Total revenues $ 508,154 $ 506,807 $ 1,555,629 $ 1,528,617 Three Months Ended Nine Months Ended September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024 Total Segment adjusted EBITDA $ 53,950 $ 51,752 $ 172,959 $ 176,006 All Other adjusted EBITDA (a) 4,498 6,841 23,896 19,559 Unallocated corporate expenses, adjusted (b) ( 10,689 ) ( 8,678 ) ( 46,857 ) ( 26,241 ) Other income/(expense) adjustments to reconcile to income before income before income taxes (c) ( 31,588 ) 15,314 ( 85,372 ) ( 42,151 ) Net interest expense ( 9,945 ) ( 10,629 ) ( 30,608 ) ( 32,588 ) Income before income taxes $ 6,226 $ 54,600 $ 34,018 $ 94,585 ___________________________________ (a) As noted in the commentary above, All Other revenue and adjusted EBITDA is derived from business units that do not meet the quantitative or qualitative thresholds for determining reportable segments. These consist of operations that derive revenues from franchise contributions to marketing funds and information systems and related services used in restaurant operations, including our point-of-sale system, online and other technology-based ordering platforms. Our largest marketing fund is PJMF, which is designed to operate at break-even for the purpose of designing and administering advertising and promotional programs for all participating Domestic restaurants. Technology-based franchisee fees are meant to offset the costs of building, operating, and depreciating technology that supports franchisee operations. As such, these fees may vary from period to period, as they are designed to operate near break-even over time including the impact of depreciation. (b) Unallocated corporate expenses represent administrative fees incurred by the restaurant support centers, including information systems and related services, corporate salaries and bonuses, and other corporate costs. These expenses are adjusted for depreciation and amortization, stock-based compensation expense, and certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business (see reconciliation that follows). The increases in unallocated corporate expenses for the three and nine month periods ended September 28, 2025 were primarily due to incremental marketing investments and an increase in management incentive compensation compared to the prior year comparable period. (c) Other income/(expense) adjustments represent Depreciation and amortization, Stock-based compensation expense, and certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business. As such, management excludes these items from the evaluation of adjusted EBITDA. For the periods above, the adjustments include: 25 Three Months Ended Nine Months Ended (in thousands) September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024 Depreciation and amortization $ 24,914 $ 17,260 $ 62,076 $ 52,528 Stock-based compensation expense 4,639 3,358 12,132 5,903 Gain on sale of QC Center properties — ( 41,289 ) — ( 41,289 ) International restructuring costs 231 3,862 4,862 19,514 Other costs (a) 1,804 1,495 6,302 5,495 Other (income)/expense adjustments $ 31,588 $ ( 15,314 ) $ 85,372 $ 42,151 ___________________________________ (a) For the three and nine months ended September 28, 2025, other costs is comprised of the following: i. Losses on disposal of equipment incurred in connection with the termination of a COVID-era program that pre-purchased store equipment due to supply chain challenges; ii. Costs associated with project-based strategic initiatives that are not related to our ongoing operations as well as transaction costs incurred in connection with the anticipated sale of our 70 % interest in a joint venture operating 85 restaurants (refer to “Note 11. Divestitures” for further information), of which approximately $ 0.1 million was attributable to noncontrolling interests, and; iii. Costs incurred, net of anticipated insurance recoveries, arising from tornadoes that struck the Texas QC Center as well as the restaurant support center and QC Center in Louisville, Kentucky. For the three and nine months ended September 29, 2024, represents a non-cash impairment charge related to fixed and intangible assets related to certain Domestic restaurants. Refer to “Note 11. Divestitures” of the “Notes to Condensed Consolidated Financial Statements” for further details. 26 Disaggregation of Revenue Our segments earn revenue from both external and internal customers. No single external customer accounted for 10% or more of our total revenues. We account for intercompany sales and transfers as if the sales or transfers were to third parties and subsequently eliminate the activity. The accounting policies of our segments are the same as those described in Note 2. Significant Accounting Policies. In the following tables, revenues are disaggregated by major product/service line. The tables also include a reconciliation of the disaggregated revenues by the reportable segment (in thousands): Three Months Ended September 28, 2025 Domestic Company-owned Restaurants North America Franchising North America Commissaries International All Other Elimination of Intersegment Revenue Total Company-owned restaurant sales $ 165,194 $ — $ — $ 3,227 $ — $ — $ 168,421 Franchise royalties and fees — 34,958 — 13,254 — ( 1,161 ) 47,051 Commissary sales — — 259,489 20,178 — ( 50,086 ) 229,581 Other revenues — — — 3,278 22,463 ( 4,317 ) 21,424 Advertising funds revenue — — — 4,784 46,403 ( 9,510 ) 41,677 Total revenues $ 165,194 $ 34,958 $ 259,489 $ 44,721 $ 68,866 $ ( 65,074 ) $ 508,154 Three Months Ended September 29, 2024 Domestic Company-owned Restaurants North America Franchising North America Commissaries International All Other Elimination of Intersegment Revenue Total Company-owned restaurant sales $ 168,672 $ — $ — $ 2,425 $ — $ — $ 171,097 Franchise royalties and fees — 34,842 — 12,000 — ( 1,012 ) 45,830 Commissary sales — — 262,452 18,600 — ( 52,063 ) 228,989 Other revenues — — — 2,789 20,247 ( 3,515 ) 19,521 Advertising funds revenue — — — 3,284 48,042 ( 9,956 ) 41,370 Total revenues $ 168,672 $ 34,842 $ 262,452 $ 39,098 $ 68,289 $ ( 66,546 ) $ 506,807 Nine Months Ended September 28, 2025 Domestic Company-owned Restaurants North America Franchising North America Commissaries International All Other Elimination of Intersegment Revenue Total Company-owned restaurant sales $ 511,786 $ — $ — $ 9,505 $ — $ — $ 521,291 Franchise royalties and fees — 108,372 — 38,701 — ( 3,664 ) 143,409 Commissary sales — — 791,524 55,930 — ( 154,356 ) 693,098 Other revenues — — — 9,971 71,842 ( 13,496 ) 68,317 Advertising funds revenue — — — 13,909 145,116 ( 29,511 ) 129,514 Total revenues $ 511,786 $ 108,372 $ 791,524 $ 128,016 $ 216,958 $ ( 201,027 ) $ 1,555,629 27 Nine Months Ended September 29, 2024 Domestic Company-owned Restaurants North America Franchising North America Commissaries International All Other Elimination of Intersegment Revenue Total Company-owned restaurant sales $ 518,103 $ — $ — $ 28,885 $ — $ — $ 546,988 Franchise royalties and fees — 107,038 — 35,598 — ( 3,101 ) 139,535 Commissary sales — — 763,506 48,950 — ( 151,633 ) 660,823 Other revenues — — — 9,641 61,924 ( 10,699 ) 60,866 Advertising funds revenue — — — 9,244 140,884 ( 29,723 ) 120,405 Total revenues $ 518,103 $ 107,038 $ 763,506 $ 132,318 $ 202,808 $ ( 195,156 ) $ 1,528,617 28