What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-27 compared with 2025-02-27 · 347 added, 242 removed, 842 unchanged (41% of the section changed)

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Consolidated Balance Sheets as of December 28, 2025 and December 29, 2024

Consolidated Statements of Operations for the Fiscal Years Ended December 29, 2024, December 31, 2023, and December 25, 2022

Consolidated Statements of Stockholders’ (Deficit) Equity for the Fiscal Years Ended December 29, 2024, December 31, 2023, and December 25, 2022

Consolidated Statements of Operations and Comprehensive Loss for the Fiscal Years Ended December 28, 2025, December 29, 2024, and December 31, 2023

Consolidated Statements of Stockholders’ Equity for the Fiscal Years Ended December 28, 2025, December 29, 2024, and December 31, 2023

Consolidated Statements of Cash Flows for the Fiscal Years Ended December 28, 2025, December 29, 2024, and December 31, 2023

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Sweetgreen, Inc.

and subsidiaries (the "Company") as of December 29, 2024 and December 31, 2023, the related consolidated statements of operations, stockholders' (deficit) equity, and cash flows, for each of the three years in the period ended December 29, 2024, and the related notes (collectively referred to as the "financial statements").

We have audited the accompanying consolidated balance sheets of Sweetgreen, Inc.and subsidiaries (the "Company") as of December 28, 2025 and December 29, 2024, the related consolidated statements of operations and comprehensive loss, stockholders' equity , and cash flows, for each of the three years in the period ended December 28, 2025, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 28, 2025 and December 29, 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 28, 2025, in conformity with accounting principles generally accepted in the United States of America.

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Property and Equipment and Operating Lease Assets – Impairment – Refer to Notes 1, 3, 4 & 8 to the financial statements

Property and Equipment and Operating Lease Assets – Impairment – Refer to Notes 1, 3, and 8 to the financial statements

Critical Audit Matter Description

The Company’s evaluation of long-lived assets at restaurants (which include property and equipment and operating lease assets) for impairment involves reviewing for events or changes in circumstances that indicate the carrying amount of the asset may not be fully recoverable.

Long-lived assets are reviewed for recoverability at the lowest level in which there are identifiable cash flows and the asset group is at the store-level for restaurant assets (“store asset group”).

When events or circumstances indicate that impairment may be present, management evaluates the probability that future undiscounted net cash flows received will be less than the carrying amount of the store asset group.

The Company uses a discounted cash flow model to measure the fair value of a store asset group.

An impairment charge will be recognized in the amount by which the carrying amount of the store asset group exceeds its fair value.

A number of significant assumptions and estimates are involved in the application of the model to project future cash flows, which are largely unobservable inputs, including revenue projections.

Changes in these assumptions could have a significant impact on either the fair value, the amount of any impairment charge, or both.

We identified the impairment of long-lived assets of a store asset group as a critical audit matter because of the significant judgments made by management in estimating future cash flows used to determine recoverability of long-lived assets of a store asset group.

Specifically, significant judgment is required by management in the determination of projected future revenue assumptions by considering sales trends.

A high degree of auditor judgment and an increased extent of effort was used when performing audit procedures to evaluate the reasonableness of management’s assumptions and estimates in projecting future revenue for a store asset group with indicators of impairment.

Long-lived assets are reviewed for recoverability at the lowest level at which there are separately identifiable cash flows.

The asset group is at the store level for restaurant assets (“store asset group”).

When events or circumstances indicate that impairment may be present, management evaluates whether the anticipated future undiscounted cash flows are less than the carrying amount of the store asset group.

If the anticipated future undiscounted cash flows are less than the carrying amount of the store asset group, management uses a discounted cash flow model to estimate the fair value of the store asset group and records an impairment charge for the amount by which the carrying amount of the store asset group exceeds its fair value.

A number of assumptions and estimates are involved in developing management’s projections of future cash flows, which are largely unobservable inputs, and include

revenue projections.

Changes in these assumptions could have a significant impact on the fair value and the amount of impairment charges recorded, if any.

We identified potential impairment of long-lived assets for store asset groups with indicators of impairment but for which no impairment charge was determined necessary to be recorded as a critical audit matter because management’s assessment involves significant judgment in estimating future cash flows.

Specifically, significant judgment is required by management in the development of revenue projections.

A high degree of auditor judgment and an increased extent of effort was used when performing audit procedures to evaluate the reasonableness of management’s assumptions and estimates in determining revenue projections for store asset groups with indicators of impairment but for which no impairment charges were recorded.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s projected future revenues utilized in its cash flow model for store asset groups with indicators of impairment included the following, among others:

• Tested the effectiveness of controls over management’s review of the long-lived asset impairment analysis for store asset groups, including key assumptions utilized to project future revenues.

• Evaluated the consistency of projected future revenues with other relevant information obtained as part of our audit.

• Compared projected future revenues to historical results and sales trends of the store asset group under evaluation and other comparable store asset groups under similar economic circumstances.

• Evaluated management's ability to accurately estimate future cash flows by comparing actual financial results to management's historical forecasts.

Our audit procedures related to management’s revenue projections utilized in its impairment testing for store asset groups with indicators of impairment included the following, among others:

• Tested the effectiveness of controls over management’s review of the long-lived asset impairment analysis for store asset groups, including key assumptions utilized to project revenues.

• Evaluated the consistency of projected revenues with other relevant information obtained as part of our audit.

• Compared projected revenues to historical results and sales trends of the store asset group under evaluation and other comparable store asset groups under similar economic circumstances.

• Evaluated management's ability to accurately project future cash flows by comparing actual financial results to management's historical forecasts.

/s/ Deloitte & Touche LLP

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February 26, 2026

We have served as the Company's auditor since 2012.

We have served as the Company's auditor since fiscal 2012.

SWEETGREEN, INC.

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Current portion of lease acquisition costs

Assets held for sale

Other current assets

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$ 788,104 $ 856,758

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

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Accrued payroll

14,716 13,131

Gift cards and loyalty liability

Liabilities held for sale

Other current liabilities

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COMMITMENTS AND CONTINGENCIES (Note 14)

Stockholders’ (deficit) equity:

Stockholders’ equity:

Common stock, $ 0.001 par value, 2,000,000,000 Class A shares authorized, 106,554,859 and 105,200,553 Class A shares issued and outstanding as of December 28, 2025 and December 29, 2024, respectively;

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( 1,009,423 ) ( 875,358 )

Total stockholders’ (deficit) equity

Total stockholders’ equity

356,125 446,145

Total liabilities and stockholders’ (deficit) equity

Total liabilities and stockholders’ equity

$ 788,104 $ 856,758

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share amounts)

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Loss on disposal of property and equipment

1,431 255 687

Restructuring charges 3,630 2,276 7,437

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( 134,019 ) ( 91,674 ) ( 113,005 )

Income tax (benefit) expense

Income tax expense (benefit)

46 ( 1,301 ) 379

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

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Balances at December 25, 2022 111,132,993 $ 111 $ 1,212,716 $ ( 671,601 ) $ 541,226

Adoption of ASC 842 — — — ( 4,944 ) ( 4,944 )

Net loss — — — ( 113,384 ) ( 113,384 )

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Exercise of stock options 929,963 2 5,387 — 5,389

Shares repurchased for employee tax withholding ( 10,888 ) — ( 166 ) — ( 166 )

Stock-based compensation expense — — 49,532 — 49,532

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Net loss — — — ( 90,373 ) ( 90,373 )

Issuance of common stock related to performance stock units 1,800,000 2 — — 2

Issuance of common stock related to restricted shares 479,078 — — — —

Issuance of common stock related to Spyce milestone achievement 208,042 — 2,132 — 2,132

Exercise of stock options 1,990,576 2 12,763 — 12,765

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Net loss — — — ( 134,065 ) ( 134,065 )

Issuance of common stock related to performance stock units 1,800,000 2 — — 2

Issuance of common stock related to restricted shares 690,957 — — — —

Issuance of common stock related to Spyce milestone achievement 242,722 — 4,709 — 4,709

208,042 — 2,132 — 2,132

Exercise of stock options 408,345 1 3,119 — 3,120

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$ ( 134,065 ) $ ( 90,373 ) $ ( 113,384 )

Adjustments to reconcile net loss to net cash used in operating activities:

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Depreciation and amortization

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Loss on disposal of property and equipment

1,431 255 687

Stock-based compensation

36,475 39,024 49,532

Impairment and closure costs

Non-cash impairment and closure costs

11,556 1,835 90

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Deferred income tax (benefit) expense

Change in fair value of contingent consideration 6,624 3,475 819

( 89 ) ( 1,412 ) 358

Change in fair value of contingent consideration liability

( 974 ) 6,624 3,475

Changes in operating assets and liabilities:

Account receivable

Accounts receivable

( 132 ) ( 1,532 ) ( 258 )

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( 6,573 ) 1,585 6,551

Accrued expenses

Accrued expenses and other current liabilities

5,810 3,313 1,163

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2,764 1,616 781

Contingent consideration liability

( 2,291 ) — —

Other non-current liabilities

( 27 ) ( 646 ) ( 533 )

Net cash provided by (used in) operating activities

Net cash (used in) provided by operating activities

( 12,696 ) 43,390 26,480

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Payment of contingent consideration — ( 3,868 ) ( 10,421 )

Payment of loan origination fees — — ( 126 )

Payment associated to shares repurchased for tax withholding

( 259 ) ( 2 ) ( 166 )

Net cash (used in) provided by financing activities

Net cash provided by (used in) financing activities

2,861 8,895 ( 5,199 )

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The Company’s operations are conducted as one operating segment and one reportable segment.

Additional details on the nature of the Company’s business and their reportable operating segment is included in Note 15, “Segment Reporting”.

Additional details on the nature of the Company’s business and their reportable operating segment is included in Note 15, “Reportable Segment”.

Principles of Consolidation —The accompanying consolidated financial statements include the accounts of the Company.

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$ 93,343 $ 217,429

Approximately $ 2.5 million of the restricted cash balance as of December 29, 2024 was associated with letters of credit required by the Company’s workers’ compensation insurance policy.

The remaining balance was associated with letters of credit from lease agreements.

The $ 4.2 million restricted cash balance as of December 28, 2025 was associated with letters of credit required by the Company’s workers’ compensation insurance policy.

Concentrations of Risk — The Company maintains cash balances at several financial institutions located in the United States.

The cash balances may, at times, exceed federally insured limits.

Accounts are guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 0.3 million.

Accounts are guaranteed by the Federal Deposit Insurance Corporation up to $ 0.3 million.

As of December 28, 2025, December 29, 2024, and December 31, 2023, approximately 24 %, 25 %, and 28 %, respectively, of the Company’s revenue was generated from the Company’s restaurants located in the New York City metropolitan area.

Other Current Assets — Other current assets primarily consist of the Employee Retention Credit “ERC”, outstanding receivables from the Company’s distributors and current amortization of deferred costs.

Other Assets — Other Assets primarily consist of deferred costs, which are capitalized implementation costs from cloud computing arrangements in relation the Company’s enterprise resource planning system (“ERP”).

These costs amounted to $ 3.8 million and $ 4.2 million as of December 29, 2024 and December 31, 2023 and were recorded within other assets in the consolidated balance sheets.

The amortization of these costs are recognized within the Company’s consolidated statement of operations under general and administrative expenses over a useful life of seven years .

Accounts Receivable — Accounts receivable primarily consists of receivables from distributors and receivables from the Company’s Marketplace and Outpost and Catering Channels.

Other Current Assets — Other current assets primarily consist of outstanding receivables from the Company’s distributors and current portion of deferred implementation costs.

Historically, this category included the Employee Retention Credit “ERC”, which was collected in full during fiscal year 2025, and thus, there is no ERC balance outstanding as of December 28, 2025.

See Note 11 for further details.

Other Assets — Other assets primarily consist of deferred implementation costs, which are capitalized implementation costs from cloud computing arrangements in relation the Company’s enterprise resource planning system These costs amounted to $ 3.3 million and $ 3.8 million as of December 28, 2025 and December 29, 2024, respectively, and were recorded within other assets in the consolidated balance sheets.

The amortization of these costs are generally recognized within the Company’s consolidated statement of operations under general and administrative expenses over a useful life of seven years .

Accounts Receivable — Accounts receivable primarily consists of receivables from distributors, amounts recoverable from third party insurance carriers, and receivables from the Company’s Marketplace and Outpost and Catering Channels.

Inventory — Inventory, consisting primarily of food, beverages and supplies, is valued at the lower of cost first-in, first-out cost or net realizable value.

Prepaid Expenses — Prepaid expenses primarily include prepaid office systems, which we amortize over the life of the contract, and prepaid insurance, which is expensed in the period for which it relates.

Prepaid Expenses — Prepaid expenses primarily include prepaid office systems, which the Company amortizes over the life of the contract, and prepaid insurance, which is expensed in the period for which it relates.

Property and Equipment —Property and equipment are recorded at cost.

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Computers and other equipment

Upon retirement or disposal of assets, the accounts are relieved of cost and accumulated depreciation and any related gain or loss is reflected in loss on disposal of property and equipment in the consolidated statement of operations.

Assets to be disposed consists of primarily furniture, equipment and fixtures that were replaced in the normal course of business and are reported at the lower of their carrying amount or fair value less estimated cost to sell.

Expenditures for repairs and maintenance are charged directly to expense when incurred.

The cost of assets sold, retired, or otherwise disposed of, and the related accumulated depreciation and amortization are eliminated from the accounts, and any resulting gain or loss is included in earnings.

Upon retirement or disposal of assets, the accounts are relieved of cost and accumulated depreciation.

Any related gain or loss is reflected in loss on disposal of property and equipment in the consolidated statement of operations.

Assets to be disposed of are reported at the lower of their carrying amount or fair value less estimated cost to sell.

Expenditures for repairs and maintenance are expensed as incurred.

The Company capitalizes certain directly attributable internal costs in conjunction with the acquisition, development and construction of future restaurants, after the restaurant construction is past the planning stage and it is considered probable that the restaurant will open.

These costs are included in property and equipment and amortized over the shorter of the life of the related buildings and leasehold improvements or the lease term.

Costs related to abandoned sites and other site selection costs that cannot be identified with specific restaurants are charged to general and administrative expenses in the accompanying consolidated statements of operations, and were $ 0.2 million, $ 0.3 million and $ 0.9 million for each of the fiscal years ended December 29, 2024, December 31, 2023 and December 25, 2022, respectively.

The Company capitalized internal costs related to site selection and construction activities of $ 4.0 million and $ 4.6 million for the fiscal years ended December 28, 2025 and December 29, 2024, respectively.

Costs related to abandoned sites and other site selection costs that cannot be identified with specific restaurants are charged to general and administrative expenses in the accompanying consolidated statements of operations, and were $ 1.3 million, $ 0.2 million and $ 0.3 million for each of the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023, respectively.

On September 7, 2021, the Company closed its acquisition of Spyce, a Boston-based restaurant company powered by automation technology, allowing the Company to serve its food in its restaurants via automation (see Note 3).

Automated technology associated with the Company’s Infinite Kitchen is included in kitchen equipment within property and equipment.

Total research and development was $ 1.0 million, $ 1.2 million and $ 2.0 million for the fiscal years ended December 29, 2024, December 31, 2023 and December 25, 2022, respectively.

Automated technology associated with the Infinite Kitchen is included in kitchen equipment within property and equipment.

Total research and development was $ 1.0 million for both of the fiscal years ended December 28, 2025 and December 29, 2024 , and $ 1.2 million for the fiscal year ended December 31, 2023.

These costs are primarily costs incurred to develop and improve the Infinite Kitchen, and are recorded within general and administrative costs in the Company’s accompanying consolidated statement of operations.

Restructuring Charges — Restructuring charges are expenses that are paid in connection with reorganization of the Company’s operations during fiscal year 2022 as well as the amortization of the underlying operating lease asset and related real estate and common area maintenance fees (“CAM”) charges.

Additionally, in conjunction with the Company’s implementation of ASC Topic 842 (“ASC 842”), operating lease assets were evaluated for impairment, and any impairment charges incurred in relation to the assets impacted by the Company’s restructuring was considered a restructuring charge.

For fiscal year 2022, the Company incurred total pre-tax restructuring and related charges of approximately $ 14.4 million.

This included a $ 13.0 million non-cash restructuring expense, due to a reduction of the Company’s real estate footprint by vacating the premises of the Company’s existing Sweetgreen Support Center and moving to a smaller office space adjacent to the existing location, of which $ 6.8 million related to impairment of long-lived assets and $ 5.8 million and $ 0.4 million related to impairment of the Company’s operating lease asset and closure costs, respectively, associated with the Sweetgreen Support Center, $ 0.6 million of severance and related benefits from workforce reductions affecting approximately 5 % of employees at the Sweetgreen Support Center, $ 0.6 million of costs related to abandoning certain potential future restaurant sites in an effort to streamline the Company’s future new restaurant openings, and $ 0.2 million of other related expenses.

For fiscal years 2024 and 2023 , stemming from the 2022 reorganization, the Company recorded restructuring charges of $ 2.3 million and $ 7.4 million, respectively, primarily related to operating lease asset impairment costs recognized in fiscal year 2023 from the Company’s vacated former Sweetgreen Support Center as well as the amortization of the underlying operating lease asset and related real estate and common area maintenance fees (“CAM”) charges.

Total operating lease costs included in restructuring charges for fiscal years for 2024 and 2023 were $ 1.5 million and $ 1.8 million, respectively, and total variable leases costs included in restructuring charges for fiscal years 2024 and 2023 were $ 0.5 million and $ 0.5 million, respectively.

Subsequent to the fiscal year ended December 28, 2025, the Company completed the sale of Spyce to certain subsidiaries of Wonder Group, Inc.

See Note 16 Assets Held for Sale and Subsequent Events for further details.

Restructuring Charges — Restructuring charges primarily relate to the continued amortization of the operating lease asset and related real estate and common area maintenance fees (“CAM”) charges resulting from the Company’s reorganization of operations and decision to vacate the premises of the Company’s former Sweetgreen Support Center during fiscal year 2022.

For fiscal year 2025, the Company recorded restructuring charges of $ 3.6 million, primarily related to the continued amortization of the operating lease asset and related real estate and CAM charges from the Company’s former Sweetgreen Support Center.

Total operating lease costs and total variable leases costs included in restructuring charges for fiscal year 2025 were $ 1.4 million and $ 0.6 million, respectively.

Additionally, the Company experienced additional restructuring costs including severance and related benefits associated with a reduction in force at the Sweetgreen Support Center and costs associated with vacating the Company’s former New York office space.

The Company continues to evaluate its organizational structure and have and may continue to implement additional changes to lower its administrative headcount.

For fiscal years 2024 and 2023 , the Company recorded restructuring charges of $ 2.3 million and $ 7.4 million, respectively, primarily related to operating lease asset impairment costs from the Company’s vacated former Sweetgreen Support Center, as well as the amortization of the underlying operating lease asset and related real estate and CAM charges.

Total operating lease costs included in restructuring charges for fiscal years for 2024 and 2023 were $ 1.5 million and $ 1.8 million, respectively, and total variable leases costs included in restructuring charges for both fiscal years 2024 and 2023 were $ 0.5 million.

Contingent Consideration —Due to certain conversion features, the contingent consideration issued as part of the Spyce acquisition is considered a liability in accordance with ASC 480.

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The initial fair value of the liability for the contingent consideration was $ 16.4 million and was included as part of the purchase price for the Spyce acquisition.

The fair value of the liability as of December 29, 2024 was $ 15.0 million, of which $ 9.7 million was included in other current liabilities and $ 5.3 million was included in contingent consideration liability within the

consolidated balance sheets.

The fair value of the liability as of December 31, 2023 was $ 8.4 million and included in contingent consideration liability within the consolidated balance sheets.

Changes in fair value of the contingent consideration is recognized within other expense in the accompanying consolidated statement of operations.

Other Current Liabilities —The other current liabilities is comprised of the short-term portion of the contingent consideration liability.

The fair value of the liability as of December 28, 2025 was $ 7.0 million, which was included in other

current liabilities within the consolidated balance sheets.

Changes in fair value of the contingent consideration is recognized within other expense in the accompanying consolidated statements of operations.

Other Current Liabilities — Other current liabilities is comprised of the short-term portion of the contingent consideration liability.

Goodwill —Goodwill, which represents the excess of the cost of an acquired entity over the fair value of the acquired net assets, has an indefinite life and, accordingly, is not amortized.

The Company has one reporting unit.

The Company tests goodwill for impairment annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired.

The Company reviews goodwill for impairment utilizing either a qualitative assessment or a fair value test by comparing the fair value of its reporting unit with its carrying amount.

The Company has one reporting unit and tests goodwill for impairment annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired.

The Company reviews goodwill for impairment utilizing either a qualitative assessment or a fair value test by comparing the fair value of its reporting unit with its carrying amount, including goodwill.

If the Company decides that it is appropriate to perform a qualitative assessment and concludes that the fair value of its reporting unit more likely than not exceeds its carrying value, no further evaluation is necessary.

If the Company performs the fair value test, the Company will compare the fair value of a reporting unit with its carrying amount, including goodwill.

If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired.

If the carrying amount of a reporting unit exceeds its fair value, the Company will recognize an impairment charge for the amount by which the carrying amount exceeds its reporting unit’s fair value.

The Company performed the qualitative assessment above and concluded that the fair value of the reporting unit is more likely than not to exceed the carrying value, and did not record any impairment charges related to the carrying amount of goodwill during the fiscal years ended December 29, 2024, December 31, 2023, and December 25, 2022.

The Company did not record any impairment charges related to the carrying amount of goodwill during the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023.

Fair value estimates are subject to change as a result of many factors, including changes in business plans, economic conditions, and the competitive environment, among others.

Should actual cash flows and the Company’s future estimates vary adversely from current estimates, the Company may be required to recognize goodwill impairment charges in future years.

Intangible Assets, net — External costs and certain internal costs, including payroll and payroll-related costs for employees, directly associated with developing computer software applications for internal use are capitalized subsequent to the preliminary stage of development as well as developed technology associated with the Company’s Infinite Kitchen.

Internal-use software costs are amortized using the straight-line method over a three year estimated useful life of the software when the project is substantially complete and ready for its intended use.

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The estimated useful life of developed technology is five years .

Lease Acquisition Costs — Lease acquisition costs included key money which is the amount of funds paid to a landlord or tenant to acquire the rights of tenancy under a commercial property lease.

Subsequent to the fiscal year ended December 28, 2025, the Company completed the sale of Spyce to Wonder Group, Inc., resulting in the disposal of the developed technology intangible asset.

For the fiscal year ended December 28, 2025, the remaining carrying value of the developed technology asset is classified as held-for-sale.

See Note 16 Assets Held for Sale and Subsequent Events for further details.

Lease Acquisition Costs — Lease acquisition costs include key money which is the amount of funds paid to a landlord or tenant to acquire the rights of tenancy under a commercial property lease.

These costs are amortized over the respective lease terms that range from 10 to 15 years and are presented net of accumulated amortization.

Revenue Recognition —The Company recognizes food and beverage revenue, net of discounts and incentives, when payment is tendered at the point of sale as the performance obligation has been satisfied, through the Company’s three disaggregated revenue channels:

Owned Digital Channels, In Store-Channel (Non-Digital component), and Marketplace Channel.

Owned Digital Channels encompasses the Company’s Pick-Up Channel, Native Delivery Channel, Outpost and Catering Channel, and purchases made in its In-Store Channel via digital scan-to-pay, prior to the elimination of digital scan-to-pay during the fiscal quarter ended September 24, 2023.

Pick-Up Channel refers to sales to customers made for pick-up at one of the Company’s restaurants through the Sweetgreen website or mobile app.

Native Delivery Channel refers to sales to customers for delivery made through the Sweetgreen website or

Outpost and Catering Channel refers to sales to customers for delivery made through the Sweetgreen website or mobile app to Outposts, which are the Company’s offsite drop-off points at offices, residential buildings and hospitals.

In addition, the Company’s Outpost and Catering Channel includes the Company’s catering offerings, which refer to sales to customers made through the Company’s catering website for pickup at one of the Company’s restaurants or delivery to a customer-specified address.

In-Store Channel (Non-Digital component) refers to sales to customers who make in-store purchases in the Company’s restaurants, whether they pay by cash or credit card, or digital scan-to-pay.

Purchases made in the Company’s In-Store Channel via cash or credit card are referred to as “Non-Digital” transactions, and purchases made in the Company’s In-Store Channel via digital scan-to-pay, prior to its elimination in 2023, were included as part of the Company’s Owned Digital Channels.

Marketplace Channel refers to sales to customers for delivery or pick-up made through third-party delivery marketplaces, including DoorDash, Grubhub, Uber Eats, ezCater, Sharebite and others.

For purposes of revenue disaggregation, the Company reports revenue in three categories:

Owned Digital Channels.

Encompasses the Company’s Pick-Up Channel, Native Delivery Channel, Outpost and Catering Channel (excluding catering orders placed through third-party platforms), and purchases made in the Company’s In-Store Channel via digital scan-to-pay, or digital scan-to-earn and scan-to-redeem associated with the SG Rewards loyalty program.

In-Store Channel (Non- Digital Component).

Sales to customers who make in-store purchases in the Company’s restaurants, whether they pay by cash, credit card.

Marketplace Revenue .

Sales to customers for delivery or pick-up made through third-party delivery marketplaces, including catering orders placed through third-party platforms.

Provisions for discounts are provided for in the same period the related sales are recorded.

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The revenue from gift cards is recognized when redeemed by customers.

Because the Company does not track addresses of gift card purchasers, the relevant jurisdiction related to the requirement for escheatment, the legal obligation to remit unclaimed assets to the state, is the Company’s state of incorporation, which is Delaware.

The state of Delaware requires escheatment after 5 years from issuance.

Gift cards are subject to actual and/or potential escheatment rights in one or more of the jurisdictions in which the Company operates.

The Company does not recognize breakage income because of its requirements to escheat unredeemed gift card balances.

SG Rewards Loyalty —The Company has a loyalty program called SG Rewards, which launched in fiscal year 2025.

Customers can earn 10 loyalty points for every $1 spent on eligible purchases made through the mobile app or by using digital scan-to-earn and scan-to-redeem in-store.

These loyalty points can be redeemed for free or discounted menu items in future transactions.

All customers with a digital account are automatically enrolled in this free program.

Points expire 180 days after they are issued to a customer’s account.

The Company records a liability and a corresponding reduction in revenue in periods when loyalty program rewards are earned by members.

The Company recognizes revenue and a corresponding reduction to the liability in periods when loyalty program rewards are redeemed by members.

The Company defers revenue based on the relative estimated standalone selling price of the loyalty points, which is estimated as the value of the loyalty reward, net of loyalty related purchases not expected to be redeemed.

Using industry data and historical customer trends, the Company estimates the total value of loyalty purchases not expected to be redeemed.

Delivery —The majority of the Company’s restaurant locations offer a delivery option.

Delivery services are fulfilled by third-party service providers whether delivery is ordered through the Company’s Native Delivery Channel or Marketplace Channel.

With respect to Native Delivery sales, the Company controls the delivery services and recognizes revenue, including delivery revenue, when the delivery partner transfers food or beverage to the customer.

With respect to Native Delivery Channel sales, the Company controls the delivery services and recognizes revenue, including delivery revenue, when the delivery partner transfers food or beverage to the customer.

For these sales, the Company receives payment directly from the customer at the time of sale.

With respect to Marketplace Channel sales, the Company recognizes revenue, excluding delivery fees collected by the delivery partner as the Company does not control the delivery service, when control of the food is delivered to the end customer.

With respect to Marketplace Channel sales, the Company recognizes revenue when food is delivered to the customer by the delivery service, excluding delivery fees collected by the delivery partner as the Company does not control the delivery service.

The Company receives payment from the delivery partner subsequent to the transfer of food and the payment terms are short-term in nature.

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With respect to uncertain tax positions, the Company recognizes in its consolidated financial statements those tax positions determined to be “more likely than not” of being sustained upon examination, based on the technical merits of the positions.

For those tax positions where it is “not more likely than not” that a tax benefit will be sustained, no tax benefit is recognized.

For those tax positions where it is “not more likely than not” that a tax benefit

will be sustained, no tax benefit is recognized.

The Company’s policy is to recognize, when applicable, interest and penalties on uncertain tax positions as part of income tax expense.

Fair Value of Financial Instruments —The fair value measurement accounting guidance creates a fair value hierarchy to prioritize the inputs used to measure fair value into three categories.

A financial instrument’s level

within the fair value hierarchy is based on the lowest level of input significant to the fair value measurement, where Level 1 is the highest category (observable inputs) and Level 3 is the lowest category (unobservable inputs).

A financial instrument’s level within the fair value hierarchy is based on the lowest level of input significant to the fair value measurement, where Level 1 is the highest category (observable inputs) and Level 3 is the lowest category (unobservable inputs).

The three levels are defined as follows:

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In other words, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment).

Impairment and Closure Costs — Impairment includes impairment charges related to our long-lived assets, which include property and equipment and internally developed software, and subsequent to the adoption of ASC 842, operating lease assets.

Impairment and Closure Costs — Impairment includes impairment charges related to the Company’s long-lived assets, which include property and equipment and internally developed software, and operating lease assets.

Long-lived assets are reviewed for recoverability at the lowest level in which there are identifiable cash flows (“asset group”).

The asset group is at the store-level for restaurant assets and the corporate-level for corporate assets.

The carrying amount of a store asset group includes stores’ property and equipment, primarily leasehold improvements, and operating lease assets, net of operating lease liability.

The carrying amount of a store asset group includes stores’ property and equipment, primarily leasehold improvements, and operating lease assets, net of operating lease liabilities.

The carrying amount of a corporate-level asset group includes Support Center property and equipment, operating lease assets, internally developed software and internally developed technology.

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If projected future undiscounted cash flows are less than the carrying value of an asset group, then such assets are written down to their fair values.

The Company uses a discounted cash flow model to measure the fair value of an asset group.

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In addition, assumptions used for operating lease assets vacated for future sublease include the Company’s estimated future sublease income and a property specific discount rate.

There is uncertainty in the projected undiscounted future cash flows used in the Company’s impairment review analysis, which requires the use of estimates and assumptions.

There is uncertainty in the projected undiscounted future cash flows used in the Company’s impairment review

analysis, which requires the use of estimates and assumptions.

If actual performance does not achieve the projections, or if the assumptions used change in the future, the Company may be required to recognize impairment charges in future periods, and such charges could be material.

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No indicators of impairment were found for the Company’s intangible assets for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023.

Based on the results of the analysis, for the fiscal year ended December 29, 2024, the Company recorded non-cash impairment charges of $ 1.7 million associated with one store location, which was recorded in impairment and closure costs within the consolidated statement of operations.

Based on the results of the analysis, for the fiscal year ended December 28, 2025, the Company recorded non-cash impairment charges of $ 11.3 million associated with twelve store locations, which was recorded in impairment and closure costs within the consolidated statement of operations.

Of the $ 11.3 million total non-cash impairment, $ 9.7 million was related to property and equipment, and $ 1.6 million was related to operating lease assets.

During the fiscal year ended December 31, 2023, the Company recorded non-cash impairment charges of $ 4.3 million, related to the operating lease asset for the Company’s former Sweetgreen Support Center vacated previously during fiscal year 2022, which was recorded under restructuring charges within the consolidated statement of operations.

During the fiscal year ended December 25, 2022 the Company recorded non-cash impairment charge of $ 15.0 million, of which $ 8.8 million was related to property and equipment and $ 6.2 million was related to operating lease assets.

Of the $ 8.8 million of property and equipment impairment, $ 6.8 million was associated with the Company’s vacated former Sweetgreen Support Center and was recorded in restructuring charges within the consolidated statement of operations, and $ 2.0 million was associated with certain store locations and was recorded in impairment and closure costs within the consolidated statement of operations.

Of the $ 6.2 million of operating lease impairment, $ 5.8 million was associated with the Company’s vacated Sweetgreen Support Center and was recorded in restructuring charges within the consolidated statement of operations, and $ 0.4 million was associated with certain store locations and was recorded in impairment and closure costs within the consolidated statement of operations.

Of the $ 15.0 million total non-cash impairment expense, $ 12.6 million was included within restructuring charges and $ 2.4 million was included within impairment and closure costs within the consolidated statement of operations.

Closure costs include lease and related costs associated with closed restaurants including the amortization of the operating lease asset, and expenses associated with common area maintenance fees and real estate taxes for previously impaired stores.

During the fiscal year ended December 29, 2024, the Company recognized closure costs of $ 0.5 million related to the amortization of the operating lease asset and expenses associated with CAM and real estate taxes for previously closed stores, including three previously impaired stores that were closed during the fiscal year ended December 31, 2023.

During the fiscal year ended December 25, 2022, the Company closed one store operated by Spyce, which was fully impaired in a prior period.

This closure resulted in closure costs of $ 0.5 million.

During the fiscal year ended December 29, 2024, the Company recorded non-cash impairment charges of $ 1.7 million associated with one store location, which was recorded in impairment and closure costs within the consolidated statement of operations.

Of the $ 1.7 million total non-cash impairment, $ 1.3 million was related to property and equipment, and $ 0.4 million was related to operating lease assets.

During the fiscal year ended December 31, 2023, the Company recorded non-cash impairment charges of $ 4.3 million, related to the operating lease asset for the Company’s former Sweetgreen Support Center vacated during fiscal year 2022, which was recorded in restructuring charges within the consolidated statement of operations.

Closure costs include lease and related costs associated with closed restaurants including the amortization of the operating lease asset, and expenses associated with CAM fees and real estate taxes for previously impaired stores.

During the fiscal year ended December 28, 2025, the Company recognized closure costs of $ 0.8 million for three stores that were impaired and closed during the fiscal year ended December 28, 2025 and one previously impaired store that was closed in fiscal year 2023.

During the fiscal year ended December 29, 2024, the Company recognized closure costs of $ 0.5 million.

Leases — The Company leases restaurants and corporate office space under various non-cancelable lease agreements that expire on various dates through 2038.

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Many of the Company's leases require payment of real estate taxes, CAM costs and other occupancy costs which are included in occupancy and related expenses on the consolidated statements of operations.

Occupancy expenses associated with unopened restaurants are recorded separately in pre-opening costs on the consolidated statements of operations.

Some of the Company’s operating leases include provisions for payment of a fixed CAM amount per annum, and as such, these payments have been included in the calculation of the operating lease liability.

The Company measured the lease liability by discounting the future fixed contractual payments included in the lease agreement, using either the rate explicit in the lease or its incremental borrowing rate (“IBR”).

The IBR used to measure the lease liability is derived from the yield curve commensurate with the credit rating of the

Company and further adjusted for seniority based on a notching analysis.

The IBR used to measure the lease liability is derived from the yield curve commensurate with the credit rating of the Company and further adjusted for seniority based on a notching analysis.

The most significant assumption in calculating the IBR is the Company’s credit rating, and the IBR is also subject to judgment.

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Contingencies —The Company is subject to various claims, lawsuits, governmental investigations, and administrative proceedings that arise in the ordinary course of business.

The Company accrues a liability (which includes litigation costs expected to be incurred) and recognizes an expense for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated.

The Company accrues a liability and recognizes an expense for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated.

Estimating liabilities and costs associated with these matters require significant judgment based upon the professional knowledge and experience of management and its legal counsel.

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Marketing expense directly attributable to an individual restaurant is included within other restaurant operating costs.

Marketing expense for the fiscal years ended December 29, 2024, December 31, 2023, and December 25, 2022 was $ 16.9 million, $ 14.3 million and $ 14.5 million, respectively, of which $ 13.2 million, $ 10.7 million and $ 10.9 million, respectively, is included in general and administrative expense, $ 3.3 million, $ 3.1 million and $ 2.7 million, respectively, is included in other restaurant operating costs and $ 0.4 million, $ 0.5 million, and $ 1.0 million is included in preopening costs in the accompanying consolidated statements of operations.

Marketing expense for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023 was $ 19.0 million, $ 16.9 million and $ 14.3 million, respectively, of which $ 11.3 million, $ 13.2 million and $ 10.7 million, respectively, is included in general and administrative expense, $ 6.8 million, $ 3.3 million and $ 3.1 million, respectively, is included in other restaurant operating costs and $ 0.9 million, $ 0.4 million, and $ 0.5 million, respectively, is included in preopening costs in the accompanying consolidated statements of operations.

Restaurant Operating Costs— Restaurant operating costs primarily consist of food, beverage, packaging costs for to-go orders, salaries, benefits, and other expenses related to the Company’s in-store employees, maintenance and utilities at the Company’s restaurants, leasing costs for the Company’s restaurants and delivery and processing fees.

Operating Expenses— Operating expenses primarily consist of operations, finance, legal, human resources, administrative personnel, stock-based compensation, depreciation and amortization of assets, and pre-opening costs.

Operating Expenses— Operating expenses primarily consist of operations, technology, finance, legal, human resources, administrative personnel, stock-based compensation, brand-related marketing, depreciation and amortization of fixed assets, and pre-opening costs.

Pre-opening costs primarily consist of rent, wages, travel for training and store opening teams, food and other restaurant costs that the Company incurs prior to the opening of a restaurant.

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The liquidity event-related performance vesting condition was achieved upon the consummation of the Company's IPO.

Stock-based compensation related to the remaining service-based period after the liquidity event-related performance vesting condition was satisfied will be recorded over the remaining requisite service period using the accelerated attribution method.

the accelerated attribution method.

Since the Company’s IPO in November 2021, the Company only granted RSUs that vest upon the satisfaction of a service-based vesting condition and the compensation expense for these RSUs is recognized on a straight-line basis over the requisite service period.

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The Company reported net loss available to common shareholders for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023.

Employee Benefit Plan — The Company sponsors a qualified 401(k) defined contribution plan (the “401k Plan”) covering eligible employees.

Employee Benefit Plan — The Company sponsors a qualified 401(k) defined contribution plan covering eligible employees.

Participants may contribute a portion of their annual compensation limited to a maximum annual amount set by the Internal Revenue Service.

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The Company has temporarily paused this matching contribution, effective in the fourth fiscal quarter of 2022.

For the fiscal year ended December 25, 2022 the matching contribution was $ 1.0 million.

Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”), issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure primarily through enhanced disclosures about significant segment expenses.

The Company adopted ASU No.

2023-07 during the year ended December 29, 2024.

See Note 15 "Segment Reporting" in the accompanying notes to the consolidated financial statements for further detail for the expanded disclosures as a result of adopting ASU No.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.” The ASU includes amendments requiring enhanced income tax disclosures, primarily related to standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

Improvements to Income Tax Disclosures.

The ASU includes amendments requiring enhanced income tax disclosures, primarily related to standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

The guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and should be applied either prospectively or retrospectively.

The Company is currently evaluating the impact of adopting this ASU on its disclosures.

The Company adopted ASU 2023-09 for the fiscal year ended December 28, 2025, and applied the new disclosure requirements prospectively to the current annual period.

Prior period disclosures have not been adjusted to reflect the new disclosure requirements.

See Note 11 Income Taxes in the accompanying notes to the consolidated financial statements for further detail.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU No.

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The guidance is effective for fiscal years beginning after December 15, 2026, with early adoption permitted, and may be applied retrospectively.

The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures.

The Company is

currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures.

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, which modernizes the accounting for internal-use software costs by removing all references to prescriptive and sequential software development stages.

The new standard uses a probable-to-complete threshold, which requires entities to consider whether significant development uncertainty has been resolved before starting to capitalize software costs and aligns disclosure requirements with ASC 360, Property, Plant, and Equipment.

With this new guidance, public companies shall begin capitalizing when both a.) management has authorized and committed funding to the project and b.) it is probable that the project will be completed and software will be used as intended.

The guidance is effective for annual and interim reporting periods beginning after December 15, 2027, and may be applied prospectively, retrospectively, or using a modified transition approach, with early adoption permitted.

The Company is currently evaluating the impacts of adopting this ASU on its consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting.

The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2025-11.

The Company reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact to the consolidated financial statements.

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See Note 1 for a description of the revenue recognition policies.

The following table presents the Company’s revenue for the fiscal years ended December 29, 2024, December 31, 2023 and December 25, 2022 disaggregated by significant revenue channel:

The following table presents the Company’s revenue for the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023 disaggregated by significant revenue category:

(dollar amounts in thousands)

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259,652 295,300 242,073

Marketplace Channel

Marketplace Revenue

184,948 175,838 129,096

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$ 679,474 $ 676,826 $ 584,041

Gift card liability included in gift card within the accompanying consolidated balance sheet was as follows:

(dollar amounts in thousands) December 29,

Gift Cards and SG Rewards Loyalty

Gift cards and loyalty liability within the accompanying consolidated balance sheets was as follows:

(dollar amounts in thousands)

December 28, 2025

December 29, 2024

December 31, 2023

Gift Card Liability

$ 3,649 $ 4,385 $ 2,797

Revenue recognized from the redemption of gift cards that was included in gift card and loyalty liability at the beginning of the year was as follows:

Loyalty Liability

Total Gift Cards and Loyalty Liability

$ 7,177 $ 4,385 $ 2,797

Revenue recognized from the redemption of gift cards that was included in gift cards and loyalty liability at the beginning of the year was as follows:

(dollar amounts in thousands) Fiscal Year Ended December 28, 2025 Fiscal Year Ended December 29, 2024 Fiscal Year Ended December 31, 2023

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$ 633 $ 730 $ 480

Revenue recognized from loyalty liability balance at the beginning of the year

The following tables present information about the Company’s financial liabilities measured at fair value on a recurring basis:

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Contingent consideration $ 7,000 $ — $ — $ 7,000 $ 14,974 $ — $ — $ 14,974

Contingent consideration as of December 28, 2025 was $ 7.0 million which is included in other current liabilities within the consolidated balance sheets.

Contingent consideration as of December 29, 2024 was $ 15.0 million, of which $ 9.7 million is included in other current liabilities and $ 5.3 million is included in contingent consideration within the consolidated balance sheets.

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Contingent Consideration

On September 7, 2021, the Company closed its acquisition of Spyce Food Co.

(“Spyce”), a Boston-based restaurant company powered by automation technology.

In connection with the Company’s acquisition the former equity holders of Spyce may receive up to 714,285 additional shares of Class A common stock, calculated based on the initial offering price of the Company’s Class A common stock of $ 28.00 per share sold in the IPO (the “Reference Price”), contingent on the achievement of certain performance milestones between the closing date of the acquisition and June 30, 2026 .

Add itionally, the former equity holders of Spyce may receive true-up payments in cash, as described here.

On September 7, 2021, the Company closed its acquisition of Spyce, a Boston-based restaurant company powered by automation technology.

In connection with the Company’s acquisition the former equity holders of Spyce may receive up to $ 20 million (in the form of up to 714,285 additional shares of Class A common stock, calculated based on the initial offering price of the Company’s Class A common stock of $ 28.00 per share sold in the IPO (the “Reference Price”)), contingent on the achievement of certain performance milestones between the closing date of the acquisition and June 30, 2026.

Additionally, the former equity holders of Spyce may receive true-up payments in cash, as described here.

If as of the second anniversary of the closing date of the acquisition, the 30-Day Volume-Weighted Average Price of the Company’s Class A common stock (“VWAP Price”) is less than the Reference Price, then the Company shall pay to each former equity holder of Spyce that has continually held their respective portion of the 1,316,763 total shares of the Company’s Class A common stock issued in connection with the acquisition during such period, the delta between the Reference Price and the VWAP Price for the upfront portion of the purchase price (“true-up payment”).

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This resulted in a true-up payment of $ 10.4 million, due to 570,249 shares that did not meet the continuous holding requirement.

The $ 10.4 million true-up payment is included within financing in the Consolidated Statements of Cash Flows as the payment is less than the original fair value of contingent consideration.

Additionally, if as of the date of the achievement of any of the three milestones, the VWAP Price as of such milestone achievement date is less than the Reference Price, then the Company shall pay to each former equity holder of Spyce that is eligible to receive a milestone payment the delta between the Reference Price and the VWAP Price for the contingent consideration associated with such milestone.

The $ 10.4 million true-up payment is included within financing activities in the consolidated statements of cash flows as the payment is less than the original fair value of contingent consideration.

Additionally, as of the date of the achievement of any of the three milestones, if the VWAP Price as of such milestone achievement date is less than the Reference Price, then the Company shall pay to each former equity holder of Spyce that is eligible to receive a milestone payment the delta between the Reference Price and the VWAP Price for the contingent consideration associated with such milestone.

The contingent consideration, excluding the true-up payment, which was calculated as noted above, was valued using the Monte Carlo method.

The analysis considered, among other items, the equity value, the contractual terms of the Spyce merger agreement, potential liquidity event scenarios (prior to the IPO), the Company’s credit-adjusted discount rate, equity volatility, risk-free rate, and the probability that milestone targets required for issuance of shares under the contingent consideration will be achieved.

During the fourth quarter of fiscal 2023, the first milestone was achieved, which resulted in former equity holders of Spyce being eligible to receive $ 6.0 million.

Of this $ 6.0 million, $ 2.1 million was issued in Class A common stock, which resulted in 208,042 shares issued, and $ 3.9 million was issued in cash, based on a VWAP Price of $ 10.20 .

This amount became known as of December 31, 2023, and as the stock was issued and payment was made within one year from December 31, 2023, it was included in other current liabilities within the Consolidated Balance Sheets as of December 31, 2023.

This amount was not disclosed as a level 3 estimate as of December 31, 2023 as it was a fixed and determinable amount as of December 31, 2023.

The stock was issued and cash was paid during the fiscal year ended December 29, 2024.

During the fourth quarter of fiscal 2023, the first milestone

was achieved, which resulted in former equity holders of Spyce being eligible to receive $ 6.0 million, which was paid during the fiscal year ended December 29, 2024.

Of this $ 6.0 million, based on a VWAP Price of $ 10.20 , $ 2.1 million was issued in Class A common stock, and $ 3.9 million was issued in cash.

During the second quarter of fiscal 2025, the second milestone was achieved, resulting in the former equity holders of Spyce being eligible to receive $ 7.0 million, which was paid during the fiscal year ended December 28, 2025.

Of this $ 7.0 million, based on a VWAP Price of $ 19.40 , $ 4.7 million was issued in the form of Class A common stock, and $ 2.3 million was paid in cash to the former Spyce Equity holders.

The initial fair value of the contingent consideration at the acquisition date was $ 16.4 million.

Since the acquisition date, the cumulative payments related to the contingent consideration were $ 23.4 million as of December 28, 2025, of which $ 6.8 million has been issued in the form of Class A common stock and $ 16.6 million has been issued in cash.

Payments up to the initial fair value of the contingent consideration were included within financing activities within the consolidated statements of cash flows if made in cash, or within non-cash financing activities if made in shares.

The second milestone payment, as detailed above, increased the cumulative payments related to the contingent consideration liability above the initial fair value;

as such, the cash component of the second milestone payment was included within operating activities within the consolidated statement of cash flows during the fiscal year ended December 28, 2025.

Any future cash payments would be recognized within operating activities in the consolidated statements of cash flows.

Subsequent to the fiscal year ended December 28, 2025, the Company completed the sale of Spyce to Wonder.

As a result, the third milestone payment was accelerated, with the remaining $ 7.0 million paid out in early 2026.

See Note 16 Assets Held For Sale and Subsequent Events for further details.

The following table provides a roll forward of the aggregate fair values of the Company’s contingent consideration, for which fair value is determined using Level 3 inputs.

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Balance—December 25, 2022

Change in fair value 819

Balance—December 25, 2022

True-up payment ( 10,421 )

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Balance—December 29, 2024

The following non-financial instruments were measured at fair value, on a nonrecurring basis, as of and for the fiscal years ended December 29, 2024, December 31, 2023, and December 25, 2022 reflecting certain property and equipment and operating leases for which an impairment loss was recognized during the corresponding periods within impairment and closure costs and restructuring charges within the consolidated statement of operations.

For the fiscal year ended December 29, 2024, the Company recorded non-cash impairment charges of $ 1.7 million associated with one store location, which was recorded in impairment and closure costs within the consolidated statement of operations.

Of the $ 1.7 million total non-cash impairment, $ 1.3 million was related to property and equipment, and $ 0.4 million was related to operating lease assets.

Fair Value Measurements

Milestone payment

Change in fair value ( 974 )

Balance—December 28, 2025

Fair Value Measurements on a Nonrecurring Basis

The following non-financial instruments were measured at fair value, on a nonrecurring basis, as of and for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023, reflecting certain property and equipment and operating leases for which an impairment loss was recognized during the

corresponding periods within impairment and closure costs and restructuring charges within the consolidated statement of operations.

Carrying value after impairment approximates fair value.

Carrying Value

at December 28, 2025

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Operating lease assets $ 2,437 $ — $ — $ 2,437 $ 1,594

Fair Value Measurements

Carrying Value

at December 29, 2024

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(dollar amounts in thousands)

Certain property and equipment, net

$ — $ — $ — $ — $ 1,347

Operating lease assets $ 6,001 $ — $ — $ 6,001 $ 389

Fair Value Measurements

Carrying Value

at December 31, 2023

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(dollar amounts in thousands)

Certain property and equipment, net

$ — $ — $ — $ — $ 8,821

Operating lease assets $ 5,719 $ — $ — $ 5,719 $ 4,291

The fair value of these assets represents a Level 3 fair value measurement.

Unobservable inputs include the discount rate, projected restaurant revenues and expenses, and sublease income if we are closing the restaurant.

For the operating lease assets’ fair value estimate as of December 29, 2024, December 31, 2023, and December 25, 2022 the Company estimated the sublease income through early fiscal 2032 and discounted such cash flows using a property specific discount rate of approximately 9.0 % to 9.5 %.

PROPERTY AND EQUIPMENT

Unobservable inputs include the discount rate, projected restaurant revenues and expenses, and sublease income if the Company is closing the restaurant.

For the operating lease assets’ fair value estimate as of December 28, 2025, December 29, 2024, and December 31, 2023,the Company estimated the sublease income through lease expiration and discounted such cash flows using a property specific discount rate of approximately 7.5 % to 9.5 %.

PROPERTY AND EQUIPMENT, NET

Property and equipment are stated at cost.

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Depreciation expense for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023 was $ 61.2 million, $ 56.4 million, and $ 49.5 million, respectively.

Loss on asset disposals for the fiscal years ended December 29, 2024, December 31, 2023, and December 25, 2022, was $ 0.3 million, $ 0.7 million, and $ 0.3 million, respectively.

As of December 29, 2024, the Company had nine facilities under construction due to open during 2025.

Depreciation commences after a store opens and the related assets are placed in service.

December 31, 2023, the Company had seven facilities under construction, all of which were opened during fiscal year 2024.

As of December 28, 2025, the Company had 11 facilities under construction due to open during 2026.

As of December 29, 2024, the Company had nine facilities under construction.

Depreciation commences after a store opens and the related assets are placed in service.

For the fiscal year ended December 29, 2024, the Company recorded non-cash impairment charges of $ 1.3 million within impairment and closure costs, within the consolidated statement of operations.

The Company did not record any non-cash impairment charges for the fiscal year ended December 31, 2023.

For the fiscal year ended December 25, 2022, the Company recorded non-cash impairment charges of $ 8.8 million, of which $ 2.0 million was recorded within impairment and closure costs and $ 6.8 million was recorded within restructuring charges within the consolidated statement of operations.

INTANGIBLE ASSETS, NET

GOODWILL AND INTANGIBLE ASSETS, NET

The following table presents the changes in the Company’s Goodwill balance:

Balance—December 29, 2024

Disposal of Goodwill in Spyce Transaction

Balance—December 28, 2025

The change in the goodwill balance recognized during the fiscal year ended December 28, 2025 is attributable to the Company’s sale of Spyce.

See Note 16 for further details.

There was no change in the carrying value of Goodwill during the fiscal year ended December 29, 2024.

The following table presents the Company’s intangible assets, net balances:

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Total $ 10,424 $ 24,040

The change in the developed technology intangible asset balance is attributable to the Company’s sale of Spyce, wherein the balance has been reclassified to assets held for sale on the consolidated balance sheets for the fiscal year ended December 28, 2025.

See Note 16 for further details.

Amortization expense for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023 was $ 10.3 million, $ 11.0 million, and $ 10.0 million, respectively.

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Other accrued expenses

14,042 10,237

Total accrued expenses

$ 33,739 $ 26,564

Credit Facility —During fiscal year 2024, the Company was party to a First Amended and Restated Revolving Credit, Delayed Draw Term Loan and Security Agreement (as amended, the “Credit Facility”) with EagleBank.

The Credit Facility allowed the Company to borrow up to $ 45.0 million in the aggregate principal amount under a revolving facility, including the issuance of letters of credit up to $ 3.5 million.

There have been no letters of credit issued, no borrowings, and no repayments under our credit facility during the fiscal years ended December 29, 2024, December 31, 2023, or December 25, 2022.

The Company did not renew the Credit Facility in 2024 and it expired pursuant to its terms on December 13, 2024.

As of December 29, 2024 and December 31, 2023, the Company had no outstanding balance under the Credit Facility.

As of December 31, 2023, the Company had unamortized loan origination fees of $ 0.1 million, which are included within the accompanying consolidated balance sheet in other current assets.

The Company recognized $ 0.1 million of interest expense in both fiscal years 2024 and 2023, respectively, related to the amortization of loan origination fee s.

As of December 28, 2025 and December 29, 2024, the Company had no outstanding debt obligations.

The Company’s prior revolving credit facility with EagleBank expired pursuant to its terms on December 13, 2024 and was not renewed.

The facility provided for borrowings up to $ 45.0 million in the aggregate principal amount, including the issuance of letters of credit up to $ 3.5 million.

The Company did not utilize any borrowings or letters of credit under this facility during its term.

In both fiscal years 2024 and 2023, the Company recognized $ 0.1 million of interest expense related to the amortization of loan origination fees associated with the facility.

The components of lease cost were as follows:

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Total lease cost $ 71,701 $ 64,407 $ 59,289

During the fiscal year ended December 29, 2024, the Company recorded a non-cash impairment charge related to operating lease assets of $ 0.4 million , which is recorded within impairment and closure costs in the consolidated financial statements.

During the fiscal year ended December 31, 2023, the Company recorded non-cash impairment charges related to operating lease assets of $ 4.3 million, all of which is recorded within restructuring charges in the consolidated statement of operations.

During fiscal year December 25, 2022, the Company recorded non-cash impairment charges related to operating lease assets of $ 6.2 million, of which $ 5.8 million is recorded within restructuring charges and $ 0.4 million is recorded within impairment and closure costs in the consolidated financial statements.

During the fiscal years ended December 28, 2025 and December 29, 2024, the Company recorded non-cash impairment charges related to operating lease assets of $ 1.6 million and $ 0.4 million, respectively, which were recorded within impairment and closure costs in the consolidated statements of operations.

During the fiscal year ended December 31, 2023, the Company recorded non-cash impairment charges related to operating lease assets of $ 4.3 million, all of which was recorded within restructuring charges in the consolidated statements of operations.

As of December 28, 2025, future minimum lease payments for operating leases consisted of the following:

(dollar amounts in thousands)

2026 $ 63,503

imputed interest 105,335

Total lease liabilities $ 354,494

As of December 29, 2024 the Company had additional operating lease commitments of $ 27.5 million for non-cancelable leases without a possession date, which the Company anticipates will commence in fiscal year 2025.

As of December 28, 2025 the Company had additional operating lease commitments of $ 14.6 million for non-cancelable leases that have not yet commenced, which the Company anticipates will commence in fiscal year 2026.

The nature of such lease commitments is consistent with the nature of the leases that the Company has executed thus far.

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Any founder’s shares of Class B common stock will convert automatically into Class A common stock, on a one -to-one basis, upon either the (i) the sale or transfer of such share of Class B common stock (except for certain permitted transfers described in the Company’s amended and restated certificate of incorporation, including transfers for tax and estate planning purposes or to any other founder or any affiliate of any founder) or (ii) the one-year anniversary of the death or permanent disability of such founder.

Additionally, all outstanding shares of the Company’s Class B common stock will convert automatically into shares of the Company’s Class A common stock on the final conversion date, defined as the earlier of (i) the nine-month anniversary of the death or permanent disability of the last of the founders;

Additionally, each outstanding share of the Company’s Class B common stock will convert automatically into one share of the Company’s Class A common stock on the final conversion date, defined as the earlier of (i) the nine-month anniversary of the death or permanent disability of the last of the founders;

(ii) the last trading day of the fiscal year during which the 10 th anniversary of the effectiveness of the registration statement for the Company’s IPO occurs, and (iii) the date specified by a vote of the holders of a majority of the outstanding shares of Class B common stock;

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During the fiscal year ended December 26, 2021, the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”), which allows for issuance of stock options (including incentive stock options and non-qualified stock options), restricted stock units (“RSUs”), including performance-based awards, and other types of awards.

The maximum number of shares of common stock that may be issued under the 2021 Plan is 35,166,753 , which is the sum of (i) 11,500,000 new shares, plus (ii) an additional number of shares consisting of (a) shares that were available for the issuance of awards under any prior equity incentive plans in place (which shall include the Prior Stock Plans (as defined below) prior to the time the Company’s 2021 Plan became effective and (b) any shares of the Company’s common stock subject to outstanding stock options or other stock awards granted under the Prior Stock Plans that on or after the Company’s 2021 Plan became effective, terminate or expire prior to the exercise or settlement;

The maximum number of shares of common stock that may be issued under the 2021 Plan is 35,166,753 , which is the sum of (i) 11,500,000 new shares, plus (ii) an additional number of shares consisting of (a) shares that were available for the issuance of awards under any prior equity incentive plans in place (which include the Company’s 2009 Stock Plan and 2019 Equity Incentive Plan (collectively, the “Prior Stock Plans”)) prior to the time the Company’s 2021 Plan became effective and (b) any shares of the Company’s common stock subject to outstanding stock options or other stock awards granted under the Prior Stock Plans that on or after the Company’s 2021 Plan became effective, terminate or expire prior to the exercise or settlement;

are not issued because the award is settled in cash;

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The Company issues shares of Class A common stock upon the vesting and settlement of RSUs and upon the exercises of stock options under the 2021 Plan.

The 2021 Plan is administered by the board of directors, or a duly authorized committee of the Company’s board of directors.

Options granted to members of the Company’s board of directors generally vest immediately.

All stock options, RSUs and performance based restricted stock awards (“PSUs”) granted prior to the 2021 Plan were rolled into the 2021 Plan.

Awards granted prior to the adoption of the 2021 Plan had similar terms with each award vesting between one and 4 year period, and have a contractual life of 10 years.

The 2021 Plan is administered by the Company’s board of directors (the “Board”), or a duly authorized committee of the Board.

Options granted to members of the Board generally vest immediately.

2009 Stock Plan and 2019 Equity Incentive Plan

Prior to the Company’s IPO, the Company granted stock options, RSUs and performance-based restricted stock awards (“PSUs”) to its employees, as well as non-employees (including directors and others who provide substantial services to the Company) under the Prior Stock Plans.

Under the Prior Stock Plans, the Company was permitted to grant incentive stock options to the Company’s employees and non-qualified stock options to the Company’s employees and non-employees, as well as stock appreciation rights, restricted stock awards, RSUs (including PSUs), and other forms of stock awards to the Company’s employees, directors and consultants and any of the Company’s affiliated employees and consultants.

Options granted in the fiscal year ended December 26, 2021 and prior generally have vesting terms between one year and four years and have a contractual life of 10 years.

No further stock awards will be granted under the Prior Stock Plans now that the 2021 Plan is effective;

however, awards outstanding under the Prior Stock Plans continue to be governed by their existing terms.

Spyce Acquisition

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As the value is fixed, the grant date fair value of these shares represents the fair value of the shares on the acquisition date.

For the fiscal years ended December 31, 2023 and December 25, 2022 , the Company recognized stock-based compensation expense of $ 2.4 million and $ 3.4 million, respectively, related to the vested portion of such shares.

For the fiscal year ended December 31, 2023 , the Company recognized stock-based compensation expense of $ 2.4 million related to the vested portion of such shares.

2021 Employee Stock Purchase Plan

In conjunction with the IPO, the Company’s board of directors adopted, and the Company’s stockholders approved the Company’s 2021 employee stock purchase plan (the “ESPP”).

In conjunction with the IPO, the Board adopted, and the Company’s stockholders approved, the Company’s 2021 employee stock purchase plan (the “ESPP”).

The Company’s ESPP authorizes the issuance of 3,000,000 shares of common stock under purchase rights granted to the Company’s employees or to the employees of any of its designated affiliates.

The number of shares of the Company’s common stock reserved for issuance will automatically increase on January 1 of each year for a period of 10 years, beginning January 1, 2023, by the lesser of (i) 1 % of the total number of shares of the Company’s common stock outstanding on December 31 of the immediately preceding year;

and (ii) 4,300,000 shares, except before the date of any such increase, the Company’s board of directors may determine that such increase will be less than the amount set forth in clauses (i) and (ii).

and (ii) 4,300,000 shares, except before the date of any such increase, the Board may determine that such increase will be less than the amount set forth in clauses (i) and (ii).

On January 1, 2023, the ESPP authorized shares increased by 1,111,331 shares to 4,111,331 in accordance with the above.

The Board delegated the authority to manage the ESPP to the Compensation Committee of the Board, which determined that there would be no increase in the share reserve under the ESPP in 2024 or 2025.

As of December 28, 2025, there had been no offering period or purchase period under the ESPP, and no such period will begin unless and until determined by the administrator.

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The Company grants stock options to its employees, as well as nonemployees (including directors and others who provide subst antial services to the Company) under the 2021 Plan .

The following table summarizes the Company’s stock option activity for the fiscal years ended December 29, 2024 and December 31, 2023 , including options assumed pursuant to the Spyce Plan, as described above:

The following table summarizes the Company’s stock option activity for the fiscal years ended December 28, 2025 and December 29, 2024 :

(dollar amounts in thousands except share and per share amounts)

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Risk-free interest rate

3.43 %- 4.69 %

3.50 %- 4.90 %

1.59 %- 3.95 %

Expected term

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Dividend yield

Fair Value of Common Stock — The Company’s board of directors determines the fair market value of its common stock based on its closing price as reported on close of business the day immediately preceding the date of grant on the New York Stock Exchange.

During the fiscal year ended December 28, 2025 , the Company approved a modification to certain stock option awards in connection with the transition of a former executive from an employee to a non-employee consultant.

The modification provided for (i) accelerated vesting of unvested awards, (ii) continued vesting of certain awards during the consulting period, and (iii) an extension of the post-termination exercise period, pertaining to a total of 924,097 options.

The incremental expense related to each modified option has been estimated as of the modification date using the Black-Scholes option-pricing model and will be recognized as additional stock-based compensation expense over the remaining requisite service period.

During the fiscal year ended December 28, 2025 the Company recognized $ 1.5 million of incremental expense related to this modification, which was recorded within total stock-based compensation expense for the year.

These options have a weighted-average exercise price of $ 10.39 .

The Company expects to recognize the remaining incremental stock option expense of $ 1.4 million related to this modification across the remaining three month consulting period in fiscal year 2026.

Additionally, during the fiscal year ended December 28, 2025 , the Company approved a modification to certain stock option awards in connection with the resignation of a former executive.

The modification provided for an extension of the post-termination exercise period of certain stock options through their respective maturity dates.

In total, 2,471,052 options were subject to these changes.

As a result of the modification, the Company recognized an incremental stock-based compensation expense of $ 6.1 million, which was recognized in full on the date of modification within fiscal year 2025.

The options have a weighted-average exercise price of $ 6.77 .

Fair Value of Common Stock — The Board determines the fair market value of its common stock based on its closing price as reported on close of business the day immediately preceding the date of grant on the New York Stock Exchange.

Risk-Free Interest Rate —The yield on actively traded non-inflation indexed U.S.

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As such, the dividend yield has been estimated to be zero .

As of December 29, 2024 , there was $ 21.6 million in unrecognized compensation expense related to unvested stock options arrangements and is expected to be recognized over a weighted average period 2.08 years.

As of December 28, 2025 , there was $ 22.5 million in unrecognized compensation expense related to unvested stock options arrangements which is expected to be recognized over a weighted-average period 2.26 years.

Restricted Stock Units and Performance Stock Units

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28, 2025 783,226 $ 12.71

During the fiscal year ended December 28, 2025 , the Company approved a modification to certain restricted stock units awards in connection with the transition of a former executive from an employee to a non-employee consultant.

The modification provided for (i) continued vesting of certain awards during the consulting period and (ii) immediate vesting of any remaining unvested restricted stock units at the completion of the consulting period.

The fair value of each modified RSU has been estimated using the current stock price as of the modification date.

During the fiscal year ended December 28, 2025 the Company recognized $ 0.15 million of incremental expense related to this modification, which was recorded within total stock-based compensation expense for the year.

The Company expects to recognize the remaining incremental stock option expense of $ 0.15 million related to this modification across the remaining three month consulting period in fiscal year 2026.

The weighted-average grant date fair value per RSU granted during the fiscal years ended December 29, 2024 and December 31, 2023 was $ 20.81 and $ 9.07 , respectively.

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The weighted-average grant date fair value of the founders PSUs was $ 16.35 per share.

The Company will recognize total stock-based compensation expense of $ 103.0 million over the derived service period of each tranche, which is between 1.7 to 4.4 years, using the accelerated attribution method as long as the founders satisfy the service-based vesting condition.

The Company continues to recognize the total stock-based compensation expense of $ 103.0 million over the derived service period of each tranche, which is between 1.7 to 4.4 years, using the accelerated attribution method as long as the founders satisfy the service-based vesting condition.

As of December 28, 2025 unrecognized compensation expense related to PSUs was $ 0.6 million and is expected to be recognized over a weighted-average period of 0.22 years.

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The fair value of the total shares released as of the vesting date during the fiscal year ended December 29, 2024 was $ 67.8 million, solely related to the founder PSUs, and the Company incurred $ 1.1 million in payroll taxes associated with the transactions which are included in general and administrative expenses within the accompanying consolidated statement of operations.

Subsequent to the Company’s IPO, the Company issued 321,428 PSUs to the Spyce founders (“Spyce PSUs”) based on three separate performance-based milestone targets.

Subsequent to the Company’s IPO, the Company issued 321,428 PSUs to the Spyce founders based on three separate performance-based milestone targets.

The Company will recognize stock compensation expense related to each performance-based milestone target as it becomes probable of occurring, based on the stock price on the date of grant.

During the fiscal year ended December 29, 2024, the Company modified the number of shares underlying these grants and the vesting terms to remove the performance-based component, resulting in the total number of shares decreasing to 85,395 , all of which are scheduled to vest on March 15, 2025.

The expense related to these RSUs is included within the RSU section above.

During the fiscal years ended December 29, 2024 and December 31, 2023 the Company did not issue any PSUs.

As described above, the Company granted a total of 6,621,248 PSUs during the fiscal year ended December 26, 2021 with a weighted average grant date fair value of $ 15.56 .

There were no grants, forfeitures, cancellations, or expirations since the grant date, and the founder PSUs released during the fiscal year ended December 29, 2024 are described above and summarized below.

The following table summarizes the Company’s PSU activity for the fiscal year ended December 29, 2024 :

(dollar amounts in thousands except per share amounts) Number of

Shares Weighted-

Grant Date Fair Value

Balance—December.

31, 2023 6,621,428 $ 15.56

( 1,800,000 ) 18.19

Forfeited, cancelled, or expired

( 321,428 ) —

Balance—December.

29, 2024 4,500,000 $ 15.62

For both of the fiscal years ended December 28, 2025 and December 29, 2024 there were 4,500,000 PSUs outstanding, with a weighted-average grant date fair value of $ 15.62 .

There was no PSU activity during the fiscal year ended December 28, 2025.

A summary of stock-based compensation expense recognized fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023 is as follows:

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The Company’s entire pretax loss for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023 was from its U.S domestic operations.

For the fiscal years ended December 29, 2024, December 31, 2023 and December 25, 2022, the Company recorded an income tax (benefit) expense of $( 1.3 ) million, $ 0.4 million, and $ 1.3 million, respectively.

For the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023, the Company recorded an income tax expense (benefit) of $ 0.05 million, $( 1.3 ) million, and $ 0.4 million, respectively.

The components of the provision for income taxes for the fiscal year ended December 28, 2025, December 29, 2024, and December 31, 2023 are as follows (in thousands):

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December 31, 2023

$ 134 $ 111 $ 21

Total Current

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Total provision for income taxes (benefit) expense $ 46 $ ( 1,301 ) $ 379

The following table provides the updated requirements of ASU 2023-09 for 2025.

Description of business and summary of significant accounting policies - recently adopted accounting pronouncements.

The effective income tax rate for the fiscal year ended December 28, 2025 differs from the statutory federal income tax rate as follows (dollars in thousands):

(dollar amounts in thousands)

federal income tax at statutory rate $ ( 28,320 ) 21.0 %

State and local income taxes, net of federal income tax effect (1)

( 342 ) 0.3 %

A reconciliation of the Company’s statutory income tax rate to the Company’s effective income tax rate is as follows:

2024 December 31,

Changes in valuation allowance 29,020 ( 21.5 %)

Nontaxable or nondeductible items

Officer compensation 4,072 ( 3.0 %)

Other, net 1,099 ( 0.8 %)

Changes in unrecognized tax benefits 1,897 ( 1.4 %)

Other Adjustments

Federal net operating loss true-up ( 1,437 ) 1.1 %

Outside basis difference in Spyce Foods ( 6,990 ) 5.2 %

Other, net 1,047 ( 0.8 %)

Effective income tax rate $ 46 — %

(1) For the fiscal year ended December 28, 2025, t he state of Texas contributes to the majority (greater than 50%) of the tax effect in this category.

As previously disclosed for the fiscal years ended December 29, 2024 and December 31, 2023, prior to the adoption of ASU 2023-09, the Company’s effective income tax rate differs from the statutory federal income tax rate as follows:

2024 December 31,

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State taxes, net of federal benefit

4.2 % 6.7 % 7.1 %

Permanent differences

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Change in valuation allowance ( 19.5 %) ( 18.5 %)

( 19.5 %) ( 18.5 %) ( 7.8 %)

Nondeductible executive compensation ( 20.0 %) ( 8.2 %)

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1.4 % ( 0.3 %)

Components of the Company’s net deferred tax (liabilities)/assets consisted of the following:

Components of the Company’s net deferred tax assets/(liabilities) consisted of the following:

(dollar amounts in thousands) December 28,

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Charitable contributions

Deferred rent

23,111 21,045

Stock-based compensation expense

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Deferred revenue

Operating lease liabilities (1)

106,738 99,861

Outside tax basis in Spyce Foods

Total deferred tax assets

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( 32,015 ) ( 39,580 )

Operating lease assets (1)

( 84,122 ) ( 77,639 )

State deferred taxes

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$ ( 274 ) $ ( 361 )

(1) Certain prior year amounts have been reclassified for consistency with the current year presentation.

These reclassifications had no effect on the reported results of operations or the consolidated balance sheets.

As of December 28, 2025 and December 29, 2024, Company management assessed the realizability of deferred tax assets, in order to determine the need for a valuation allowance.

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In general, under Section 382 of the Internal Revenue Code (Section 382), a corporation that undergoes an ownership change is subject to limitations on its ability to utilize its pre-change net operating loss carryovers and tax credits to offset future taxable income.

The Company completed a Section 382 analysis to evaluate whether any ownership changes and related limitations impacted the Company’s ability to utilize net operating loss carryforwards or other attributes prior to their expiration dates.

The Company completed a Section 382 analysis to evaluate whether any ownership changes and related limitations impacted the Company’s ability to utilize net operating loss carryforwards or

other attributes prior to their expiration dates.

The Company’s existing net operating loss carryforwards and tax credits are subject to annual limitations arising from ownership changes which occurred in previous periods.

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if that occurs, the Company’s ability to utilize net operating losses could be further limited.

Furthermore, the Company’s ability to utilize net operating losses of companies that we may acquire in the future may be subject to limitations under Section 382 of the Code.

Furthermore, the Company’s ability to utilize net operating losses of companies that the Company may acquire in the future may be subject to limitations under Section 382 of the Code.

The Company files income tax returns in the U.S.

federal jurisdiction and in various state and local jurisdictions in which it operates, and therefore is subject to tax examination by various taxing authorities.

The Company is not currently under examination and is not aware of any issues under review that could result in significant payments, accruals or material deviation from its tax positions.

As of December 29, 2024 , tax years from 2019 to present remain open to examination under the statutes applied by the relevant taxing jurisdictions in which the Company files tax returns.

Additionally, to the extent the Company utilizes tax attribute carryforwards, such as net operating losses, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service and state and local tax authorities.

The Company is not aware of any issues under review that could result in a material deviation from its tax positions.

The Company is not currently under examination by the Internal Revenue Service or any major state and local tax jurisdictions.

In general, our tax returns for years 2020 to 2024 remain open to examination by the major jurisdictions in which the Company is subject to tax.

Fiscal years outside the normal statute of limitation remain open to audit by tax authorities due to tax attributes, such as net operating losses, generated in those early years, which have been carried forward and may be audited in subsequent years when utilized.

The calculation and assessment of the Company’s tax exposures generally involve the uncertainties in the application of complex tax laws and regulations for federal, state and local jurisdictions.

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Beginning of year balance

$ 431 $ 1,556

(Decreases) increases related to current year tax positions

Increases (decreases) related to current year tax positions

2,019 ( 338 )

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On March 11, 2021, President Biden signed the American Rescue Plan Act (“ARPA”).

The ARPA includes several provisions, such as measures that extend and expand the employee retention credit, previously enacted under the Coronavirus Aid, Relief and Economic Security Act (“CARES

Act”), through December 31, 2021.

The ARPA includes several provisions, such as measures that extend and expand the employee retention credit, previously enacted under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), through December 31, 2021.

The ARPA did not have a material impact on the Company’s consolidated financial statements.

As there is no authoritative guidance under U.S.

GAAP on accounting for government assistance to for-profit business entities, the Company accounts for the Employee Retention Credit “ERC” by analogy to International Accounting Standard (“IAS”) 20, Accounting for Government Grants and Disclosure of Government Assistance.

As authoritative guidance is currently pending under U.S.

GAAP on accounting for government assistance to for-profit business entities, the Company accounts for the ERC by analogy to International Accounting Standard (“IAS”) 20, Accounting for Government Grants and Disclosure of Government Assistance.

In accordance with IAS 20, management determined it has reasonable assurance for receipt of the ERC and recorded the ERC benefit of $ 1.8 million within Labor and other related expenses and $ 5.1 million within general and administrative expenses in the consolidated statement of operations for the fiscal year ended December 31, 2023 as an offset to Social Security tax expense.

As of December 31, 2023 the Company received $ 3.4 million cash payment reducing the ERC receivable within other current assets on the Consolidated Balance Sheet to $ 3.6 million.

No additional cash payments receipts have been received to date.

During fiscal year 2025, the Company received the remaining $ 3.6 million in cash related to the ERC receivable, resulting in the full collection of the outstanding balance previously reported within other current assets .

Accordingly, as of December 28, 2025, there is no ERC receivable balance within other current assets on the consolidated balance sheet.

Income taxes paid (net of refunds) are as follows:

(dollar amounts in thousands) December 28,

On July 4, 2025, H.R.1, commonly referred to as the One Big Beautiful Bill Act, was enacted in the U.S., which includes a broad range of tax reform provisions, including extending and modifying certain key Tax Cuts and Jobs Act provisions (both domestic and international), and provisions allowing accelerated tax deductions for qualified property and research expenditures.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others to be implemented through 2027.

The legislation's enactment did not materially impact the Company’s effective income tax rate or cash tax position for the year ended December 28, 2025.

NET LOSS PER SHARE

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As the liquidation and dividend rights were identical, the undistributed earnings were allocated on a proportionate basis and the resulting net loss per share attributable to common stockholders were, therefore, the same for both Class A and Class B common stock on an individual or combined basis.

The Company's net loss equals comprehensive loss for all periods presented.

The following table sets forth the computation of net loss per common share:

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RELATED-PARTY TRANSACTIONS

The Company’s founders and Chief Financial Officer each hold indirect minority passive interests in Luzzatto Opportunity Fund II, LLC, an entity which holds indirect equity interests in Welcome to the Dairy, LLC, which is the owner of the property leased by the Company for the Company’s principal corporate headquarters.

The Company’s founders and former Chief Financial Officer each hold an indirect minority passive interest in Luzzatto Opportunity Fund II, LLC, an entity which holds indirect equity interests in Welcome to the Dairy, LLC, which is the owner of the properties leased by the Company for the Company’s principal corporate headquarters.

For the fiscal years ended December 28, 2025, December 29, 2024 , and December 31, 2023 total payments to Welcome to the Dairy, LLC, totaled $ 5.0 million, $ 3.9 million, and $ 4.2 million, respectively.

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Purchase Obligations

Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on us and that specify all significant terms.

The majority of the Company’s purchase obligations relate to amounts owed for supplies within its restaurants.

Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on us and that spec ify all significant terms.

The majority of the Company’s purchase obligations relate to amounts owed for supplies within its restaurants and are due within the next twelve months.

Legal Contingencies

The Company is subject to various claims, lawsuits, governmental investigations and administrative proceedings that arise in the ordinary course of business.

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Reportable Segment

The Company’s operations are conducted as one operating segment and one reportable segment.

The Company’s chief operating decision maker (“CODM”) is the chief executive officer.

The Company defines its segments based on the way the Company’s internally reported financial information is regularly reviewed by the CODM to analyze financial performance, make decisions, and allocate resources.

The Company has one revenue stream, which is derived from retail sales of food and beverages by company-owned restaurants within the United States.

The Company’s approach to designing its menu and related food and beverage offerings are consistent throughout the United States.

Additionally, the Company’s food ethos, manners in which stores are operated and available channels are consistent throughout the United States.

Based on these factors, the CODM manages business activities, allocates resources and assess financial performance on a consolidated basis.

The accounting policies are the same as those described in the summary of significant accounting policies.

The Company operates as one operating segment and one reportable segment.

The chief executive officer serves as the Company’s chief operating decision maker (“CODM”), defining segments based on the way the Company’s internally reported financial information is regularly reviewed by the CODM to analyze financial performance, make decisions, and allocate resources.

The Company has one revenue stream, generating revenue from retail sales of food and beverages by company-owned restaurants within the United States.

The menu design and related food and beverage offerings, food ethos, store operations, and distribution channels are consistent throughout the United States.

Accordingly, the CODM manages business activities, allocates resources and assess financial performance on a consolidated basis.

The accounting policies applied are consistent with those described in the summary of significant accounting policies.

Sweetgreen does not have intra-company sales or transfers.

The CODM assesses performance for Sweetgreen and decides how to allocate resources based on Net loss as reported on the Consolidated Statement of Operation.

The CODM uses Net loss to monitor budget versus actual results as well as benchmarking Sweetgreen to its competitors.

The competitive analysis along with the monitoring of budgeted versus actual results are used in assessing performance of Sweetgreen.

The assets of the Company are managed centrally and are reported internally in the same manner as the consolidated financial statements.

The CODM assesses performance for Sweetgreen and decides how to allocate resources based on Net loss as reported on the consolidated statements of operations.

This metric enables the CODM to monitor budget versus actual results and benchmark against competitors, used to evaluate the Company’s performance.

Assets are managed centrally and are reported internally in the same manner as the consolidated financial statements.

Therefore, no further information is disclosed herein.

Other than certain disaggregated expense information provided in relation to General and Administrative expense (“G&A”), significant expenses regularly provided to the CODM is presented on the face of the statement of operations.

statement of operations.

The CODM is also regularly provided disaggregated expense information for G&A, which is disaggregated between operating support center cost, stock-based compensation, all of which was included within G&A (see Note 10), and other expenses, as shown below:

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Stock-based compensation 36,475 39,024 49,532

39,024 49,532 78,736

Other expenses (2)

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(1) Operating support center costs consist primarily of operations, technology, finance, legal, human resources, administrative personnel, and other personnel costs that support restaurant development and operations, as well as brand-related marketing.

(2) Other expense typically includes expenses recorded for accruals related to legal settlements, one-time costs incurred to acquire Spyce, amortization costs associated with the implementation of our Enterprise Risk Management system and the employer portion of the founder performance stock unit payroll tax.

(2) Other expense typically includes expenses recorded for accruals related to legal settlements, amortization costs associated with the implementation of our Enterprise Resource Planning system, the employer portion of the founder performance stock unit payroll tax, and other costs associated with other one-time initiatives.

Additionally, the CODM regularly reviews interest income, interest expense, depreciation and amortization and income tax expense, which are included on the face of the income statement.

Assets Held for Sale and Subsequent Events

Sale of Spyce

On December 29, 2025, subsequent to fiscal year end, the Company completed the previously announced sale of Spyce, the business unit responsible for developing the Infinite Kitchen technology, and certain other assets related to the Infinite Kitchen technology, to Wonder.

Total consideration was $ 186.4 million, made up of cash of $ 100 million and Series C preferred stock of Wonder with an implied value of $ 86.4 million.

Under this agreement, Sweetgreen will continue to use and deploy Infinite Kitchen technology across its restaurants pursuant to an established licensing agreement and a supply and services agreement, both with Wonder.

In connection with this agreement to sell Spyce, the Company determined that the disposal met the criteria for classification as held for sale, but did not meet the criteria for classification as discontinued operations.

Accordingly, the Company classified the related assets and liabilities included in the disposal group as held for sale at year end.

The disposal group primarily includes intangible assets, property and equipment, and goodwill transferred as part of the sale.

The Company allocated a portion of the reporting unit's goodwill to the disposal group based on the relative fair values of the business being disposed of and the portion of the reporting unit being retained.

The Company determined fair value using the market approach, based on the negotiated value of the assets.

The income tax effect of this transaction is currently being evaluated by the company.

A reasonable estimate of the financial impact cannot be made at this time.

The following table presents information related to the major classes of assets and liabilities that were classified as held for sale in the Company’s consolidated balance sheets as of December 28, 2025:

Assets and Liabilities Held For Sale (in thousands) Fiscal Year Ended

December 28, 2025

Prepaid Expenses 72

Other current assets 307

Operating lease assets 562

Property and equipment, net 5,324

Goodwill 8,177

Intangible assets, net 10,935

Security deposits 50

Assets held for sale 25,427

Current portion of operating lease liabilities 445

Operating lease liabilities, net of current portion 640

Liabilities held for sale 1,085

Further, in early 2026, the Company made an aggregate cash payment of $ 5.4 million and issued 242,722 shares of its Class A common stock to former equity holders of Spyce in connection with the achievement of the third performance milestone, accel erated as part of the Spyce sale.

Tariff Developments

On February 20, 2026, the U.S.

Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act ("IEEPA") were not authorized.

Subsequently, the President terminated all IEEPA-based tariffs and imposed or implied new tariffs under alternative legal authorities.

The trade policy environment remains fluid, and the Company is actively monitoring these developments, including the availability of refunds for tariffs previously paid.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data