Sweetgreen, Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Index To Consolidated Financial Statements Report of Independent Registered Public Accounting F irm (PCAOB ID No. 34 ) F- 2 Consolidated Balance Sheets as of December 28, 2025 and December 29, 2024 F- 4 Consolidated Statements of Operations and Comprehensive Loss for the Fiscal Years Ended December 28, 2025, December 29, 2024, and December 31, 2023 F- 5 Consolidated Statements of Stockholders’ Equity for the Fiscal Years Ended December 28, 2025, December 29, 2024, and December 31, 2023 F- 6 Consolidated Statements of Cash Flows for the Fiscal Years Ended December 28, 2025, December 29, 2024, and December 31, 2023 F- 7 Notes to Consolidated Financial Statements F- 8 F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Sweetgreen, Inc. Opinion on 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. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 28, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. 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, 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 assets may not be recoverable. 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 F-2 Table of Contents 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 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 Los Angeles, California February 26, 2026 We have served as the Company's auditor since fiscal 2012. F-3 Table of Contents SWEETGREEN, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) December 28, 2025 December 29, 2024 ASSETS Current assets: Cash and cash equivalents $ 89,177 $ 214,789 Accounts receivable 5,166 5,034 Inventory 2,384 1,987 Prepaid expenses 6,381 7,844 Current portion of lease acquisition costs 93 93 Assets held for sale 25,427 — Other current assets 1,029 4,790 Total current assets 129,657 234,537 Operating lease assets 284,263 257,496 Property and equipment, net 326,903 296,485 Goodwill 27,793 35,970 Intangible assets, net 10,424 24,040 Security deposits 1,316 1,419 Lease acquisition costs, net 241 333 Restricted cash 4,166 2,640 Other assets 3,341 3,838 Total assets $ 788,104 $ 856,758 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Current portion of operating lease liabilities $ 41,590 $ 41,773 Accounts payable 19,885 18,698 Accrued expenses 33,739 26,564 Accrued payroll 8,143 14,716 Gift cards and loyalty liability 7,177 4,413 Liabilities held for sale 1,085 — Other current liabilities 7,033 9,663 Total current liabilities 118,652 115,827 Operating lease liabilities, net of current portion 312,904 288,941 Contingent consideration liability — 5,311 Other non-current liabilities 149 173 Deferred income tax liabilities 274 361 Total liabilities 431,979 410,613 COMMITMENTS AND CONTINGENCIES (Note 14) 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; 300,000,000 Class B shares authorized and 11,893,558 and 11,915,758 Class B shares issued and outstanding as of December 28, 2025 and December 29, 2024, respectively. 118 117 Additional paid-in capital 1,365,430 1,321,386 Accumulated deficit ( 1,009,423 ) ( 875,358 ) Total stockholders’ equity 356,125 446,145 Total liabilities and stockholders’ equity $ 788,104 $ 856,758 The accompanying notes are an integral part of these consolidated financial statements. F-4 Table of Contents SWEETGREEN, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (in thousands, except share and per share amounts) Fiscal Year Ended December 28, 2025 December 29, 2024 December 31, 2023 Revenue $ 679,474 $ 676,826 $ 584,041 Restaurant operating costs (exclusive of depreciation and amortization presented separately below): Food, beverage, and packaging 193,678 185,367 161,725 Labor and related expenses 196,571 188,867 171,306 Occupancy and related expenses 65,417 59,536 54,281 Other restaurant operating costs 120,277 110,107 94,809 Total restaurant operating costs 575,943 543,877 482,121 Operating expenses: General and administrative 143,401 149,942 146,762 Depreciation and amortization 71,537 67,346 59,491 Pre-opening costs 10,785 6,616 9,263 Impairment and closure costs 12,065 2,218 624 Loss on disposal of property and equipment 1,431 255 687 Restructuring charges 3,630 2,276 7,437 Total operating expenses 242,849 228,653 224,264 Loss from operations ( 139,318 ) ( 95,704 ) ( 122,344 ) Interest income ( 6,548 ) ( 10,942 ) ( 12,942 ) Interest expense 19 256 128 Other expense 1,230 6,656 3,475 Net loss before income taxes ( 134,019 ) ( 91,674 ) ( 113,005 ) Income tax expense (benefit) 46 ( 1,301 ) 379 Net loss $ ( 134,065 ) $ ( 90,373 ) $ ( 113,384 ) Earnings per share: Net loss per share, basic and diluted $ ( 1.14 ) $ ( 0.79 ) $ ( 1.01 ) Weighted-average shares used in computing net loss per share, basic and diluted 117,956,165 114,321,672 111,907,675 The accompanying notes are an integral part of these consolidated financial statements. F-5 Table of Contents SWEETGREEN, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands, except share amounts) Common Stock Additional Paid-in Capital Accumulated Deficit Total Shares Amount Balances at December 25, 2022 111,132,993 $ 111 $ 1,212,716 $ ( 671,601 ) $ 541,226 Net loss — — — ( 113,384 ) ( 113,384 ) Issuance of common stock related to restricted shares 587,078 — — — — 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 Balances at December 31, 2023 112,639,146 113 1,267,469 ( 784,985 ) 482,597 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 Shares repurchased for employee tax withholding ( 531 ) — ( 2 ) — ( 2 ) Stock-based compensation expense — — 39,024 — 39,024 Balances at December 29, 2024 117,116,311 117 1,321,386 ( 875,358 ) 446,145 Net loss — — — ( 134,065 ) ( 134,065 ) 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 Exercise of stock options 408,345 1 3,119 — 3,120 Shares repurchased for employee tax withholding ( 9,918 ) — ( 259 ) — ( 259 ) Stock-based compensation expense — — 36,475 — 36,475 Balances at December 28, 2025 118,448,417 $ 118 $ 1,365,430 $ ( 1,009,423 ) $ 356,125 The accompanying notes are an integral part of these consolidated financial statements. F-6 Table of Contents SWEETGREEN, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Fiscal Year Ended December 28, 2025 December 29, 2024 December 31, 2023 Cash flows from operating activities: Net loss $ ( 134,065 ) $ ( 90,373 ) $ ( 113,384 ) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization 71,537 67,346 59,491 Amortization of lease acquisition costs 92 93 92 Amortization of loan origination fees — 71 55 Amortization of cloud computing arrangements 1,009 914 880 Non-cash operating lease cost 35,316 31,475 29,113 Loss on disposal of property and equipment 1,431 255 687 Stock-based compensation 36,475 39,024 49,532 Non-cash impairment and closure costs 11,556 1,835 90 Non-cash restructuring charges 861 701 5,281 Deferred income tax (benefit) expense ( 89 ) ( 1,412 ) 358 Change in fair value of contingent consideration liability ( 974 ) 6,624 3,475 Changes in operating assets and liabilities: Accounts receivable ( 132 ) ( 1,532 ) ( 258 ) Inventory ( 397 ) 82 ( 686 ) Prepaid expenses and other current assets 4,338 ( 22 ) ( 3,789 ) Operating lease liabilities ( 40,523 ) ( 18,318 ) ( 22,290 ) Accounts payable 1,186 759 9,871 Accrued payroll and benefits ( 6,573 ) 1,585 6,551 Accrued expenses and other current liabilities 5,810 3,313 1,163 Gift card and loyalty liability 2,764 1,616 781 Contingent consideration liability ( 2,291 ) — — Other non-current liabilities ( 27 ) ( 646 ) ( 533 ) Net cash (used in) provided by operating activities ( 12,696 ) 43,390 26,480 Cash flows from investing activities: Purchase of property and equipment ( 106,492 ) ( 84,457 ) ( 89,672 ) Purchase of intangible assets ( 7,813 ) ( 7,741 ) ( 6,115 ) Security and landlord deposits 54 ( 13 ) 122 Net cash used in investing activities ( 114,251 ) ( 92,211 ) ( 95,665 ) Cash flows from financing activities: Proceeds from stock option exercise 3,120 12,765 5,388 Payment of contingent consideration — ( 3,868 ) ( 10,421 ) Payment associated to shares repurchased for tax withholding ( 259 ) ( 2 ) ( 166 ) Net cash provided by (used in) financing activities 2,861 8,895 ( 5,199 ) Net decrease in cash and cash equivalents and restricted cash ( 124,086 ) ( 39,926 ) ( 74,384 ) Cash and cash equivalents and restricted cash—beginning of year 217,429 257,355 331,739 Cash and cash equivalents and restricted cash—end of year $ 93,343 $ 217,429 $ 257,355 Supplemental disclosure of cash flow: Cash paid for interest $ 19 $ 184 $ 50 Non-cash investing and financing activities: Purchase of property and equipment accrued in accounts payable and accrued expenses $ 11,190 $ 9,791 $ 6,824 Non-cash issuance of common stock associated with Spyce milestone achievement $ — $ 2,132 $ — The accompanying notes are an integral part of these consolidated financial statements. F-7 Table of Contents SWEETGREEN, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Sweetgreen, Inc., a Delaware corporation, together with its wholly owned subsidiaries (the “Company”), is a mission-driven, next generation restaurant and lifestyle brand that serves healthy food at scale. The Company’s bold vision is to be as ubiquitous as traditional fast food, but with the transparency and quality that consumers increasingly expect. As of December 28, 2025, the Company owned and operated 281 restaurants in 24 states and Washington, D.C. The Company had 35 Net New Restaurant Openings in fiscal year 2025. The Company was founded in November 2006 and incorporated in the state of Delaware in October 2009 and currently is headquartered in Los Angeles, California. 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, “Reportable Segment”. Principles of Consolidation —The accompanying consolidated financial statements include the accounts of the Company. All intercompany balances and transactions have been eliminated in consolidation. Fiscal Year —The Company’s fiscal year is a 52- or 53-week period that ends on the last Sunday of the calendar year. Fiscal years 2025 and 2024 were 52-week periods that ended December 28, 2025 and December 29, 2024, respectively. Fiscal year 2023 was a 53-week period that ended December 31, 2023. In a 52-week fiscal year, each quarter includes 13 weeks of operations. In a 53-week fiscal year, the first, second and third quarters each include 13 weeks of operations, and the fourth quarter includes 14 weeks of operations. Management’s Use of Estimates —The consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates made by the Company include the income tax valuation allowance, impairment of long-lived assets and right-of-use assets (“ROU assets”), legal liabilities, valuation of the contingent consideration liability, lease accounting matters, and stock-based compensation. These estimates are based on information available as of the date of the consolidated financial statements; therefore, actual results could differ from those estimates. Cash and Cash Equivalents —The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. Amounts receivable from credit card processors are converted to cash shortly after the related sales transaction and are considered to be cash equivalents because they are both short-term and highly liquid in nature. Amounts receivable from sales transactions as of December 28, 2025 and December 29, 2024, were $ 3.6 million and $ 2.3 million, respectively. Restricted Cash —The Company’s restricted cash balance relates to certificates of deposit that are collateral for letters of credit to lease agreements entered into by the Company and letters of credit associated with the Company’s workers’ compensation insurance policy. F-8 Table of Contents The reconciliation of cash and cash equivalents and restricted cash presented in the Company’s accompanying consolidated balance sheets to the total amount shown in its consolidated statements of cash flows is as follows: (dollar amounts in thousands) December 28, 2025 December 29, 2024 Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 89,177 $ 214,789 Restricted cash, non-current 4,166 2,640 Total cash, cash equivalents and restricted cash shown on statement of cash flows $ 93,343 $ 217,429 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 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 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 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. Property and equipment are depreciated using the straight-line method over the following estimated useful lives: Property and Equipment Useful Life Leasehold improvements Shorter of lease term or estimated asset life Furniture and fixtures 5 years Kitchen equipment 5 - 10 years Computers and other equipment 3 years F-9 Table of Contents 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. 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 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. Subsequent to the fiscal year ended December 28, 2025, the Company completed the sale of Spyce to certain subsidiaries of Wonder Group, Inc. (“Wonder”). 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. The liability associated with the contingent consideration is initially recorded at fair value (see Note 3 for further details) upon issuance date and is subsequently re-measured to fair value at each reporting date. 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 28, 2025 was $ 7.0 million, which was included in other F-10 Table of Contents current liabilities within the consolidated balance sheets. 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. See Note 3. 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. See Note 3. 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 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 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 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 Infinite Kitchen technology. 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. Developed technology intangible assets were recognized in conjunction with the Company’s acquisition of Spyce on September 7, 2021. The estimated useful life of developed technology is five years . 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. For purposes of revenue disaggregation, the Company reports revenue in three categories: I. 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. F-11 Table of Contents II. 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. III. 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. Sales taxes and other taxes collected from customers and remitted to governmental authorities are presented on a net basis, and as such, are excluded from revenues. Gift Cards —The Company sells gift cards that do not have an expiration date. Upon sale, gift cards are recorded as unearned revenue and included within gift card liability in the accompanying consolidated balance sheets. The revenue from gift cards is recognized when redeemed by customers. 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 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 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. For all delivery sales, the Company is considered the principal and recognize the revenue on a gross basis. Income Taxes —The Company is subject to federal and state income taxes. The Company uses the asset and liability method of accounting for income taxes as set forth in ASC 740, Income Taxes . Under this method, the Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the respective carrying amounts and tax basis of assets and liabilities. All deferred tax assets and liabilities are classified as non-current in the accompanying consolidated balance sheet. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established against the portion of deferred tax assets that the Company believes will not be realized on a more-likely-than-not basis. 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 F-12 Table of Contents 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). The three levels are defined as follows: Level 1 —Quoted prices for identical instruments in active markets. Level 2 —Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which significant value drivers are observable. Level 3 —Unobservable inputs for the asset or liability. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. The carrying amount of accounts receivable, other current assets, accounts payable, accrued payroll and accrued expenses approximates fair value due to the short-term maturity of these financial instruments. The Company’s contingent consideration liability is carried at fair value determined using Level 3 inputs in the fair value. See Note 3. Certain assets and liabilities are measured at fair value on a nonrecurring basis. 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). See Note 3. 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 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. Long-lived assets are reviewed by management for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be fully recoverable. 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 asset group. The Company uses a discounted cash flow model to measure the fair value of an 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. The resulting impairment charge, if any, is allocated to the property and equipment, primarily leasehold improvements, and operating lease assets on a pro rata basis using the relative carrying amounts of those assets. The allocated impairment charge to a long-lived asset is limited to the extent that the impairment charge does not reduce the carrying amount of the long-lived asset below its individual fair value. The estimation of the fair value of an operating lease asset primarily involves the evaluation of current and future market value rental amounts, which are primarily based on recent observable market rental data. The fair value of an operating lease asset is measured using a discounted cash flow valuation technique by discounting the estimated current and future market rental values using a property-specific discount rate. A number of significant assumptions and estimates are involved in the application of the model to forecast operating cash flows, which are largely unobservable inputs, including future revenue projections. Accordingly, such significant assumptions are classified as Level 3 inputs within the fair value hierarchy. Assumptions used in these forecasts are consistent with internal planning, and include sales growth rates, gross margins, and operating expense in relation to the current economic environment and the Company’s future expectations, competitive factors in its various markets, inflation, sales trends and other relevant economic factors that may impact the store under evaluation. 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 F-13 Table of Contents 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. The Company determined that triggering events, primarily related to the impact of changing customer behavior trends, including slower than expected return to office and as a result of broader macroeconomic conditions on the Company’s near-term restaurant level cash flow forecast, restructuring activities and anticipated store closures, occurred for certain restaurants and its Support Center, that required an impairment review of the Company’s long-lived assets. 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 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 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. Lease terms for restaurants generally include a base term of 10 years, with options to extend these leases for additional periods of 5 to 15 years. The Company evaluates contracts entered into to determine whether the contract involves the use of property or equipment, which is either explicitly or implicitly identified in the contract. The Company evaluates whether it controls the use of the asset, which is determined by assessing whether it obtains substantially all economic benefits from the use of the asset, and whether it has the right to direct the use of the asset. If these criteria are met and the contract is identified as a lease, then the Company accounts for the contract under the requirements of ASC 842. The Company also evaluates whether the lease will be accounted for as an operating or finance lease based on the terms of the lease agreement, and when determining the lease term, the Company includes reasonably certain option renewal periods. 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 most significant assumption in calculating the IBR is the Company’s credit rating, and the IBR is also subject to judgment. For leases with a lease term of 12 months or less ("short-term lease"), any fixed lease payments are recognized on a straight-line basis over such term, and are not recognized on the consolidated balance sheets. F-14 Table of Contents Certain leases contain provisions for contingent rent that require additional rental payments based upon restaurant sales volume. Contingent rent is expensed each period as the liability is incurred, and is not included in the initial measurement of operating lease assets and liabilities. The Company receives tenant improvement allowances, generally in the form of cash, from some of the landlords of its leased properties. The tenant improvement allowances that are expected to be received are included in the measurement of the initial operating lease liability, which are also reflected as a reduction to the initial measurement of the right-of-use asset and amortized over the applicable lease terms. 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 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. Marketing and Public Relations —Marketing costs, which include the development and production of advertising materials and online marketing tools, are expensed in the period incurred. Marketing expense directly attributable to an individual restaurant is included within other restaurant operating costs. 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, 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. These costs are expensed as incurred. Stock-Based Compensation —The Company recognizes compensation expense resulting from stock-based payments over the period for which the requisite services are provided. The Company uses the Black-Scholes-Merton (“Black-Scholes”) option-pricing model to estimate the fair value of the incentive stock options at the measurement date. Grant date is deemed to be the appropriate measurement date for stock options issued to employees and nonemployees. The use of the Black-Scholes option-pricing model requires the use of subjective assumptions, including the fair value and projected volatility of the underlying common stock and the expected term of the award. For all stock options granted, the Company calculated the expected term using the simplified method for “plain vanilla” stock option awards. The risk-free interest rate is based on the yield available on U.S. Treasury zero-coupon issues similar in duration to the expected term of the stock-based award. The Company’s common stock has not been publicly traded over the full expected term, and therefore, the Company used the historical volatility of the stock price of similar publicly traded peer companies. The Company utilized a dividend yield of zero , as it had no history or plan of declaring dividends on its common stock. The grant date fair value of restricted stock units (“RSUs”) is estimated based on the fair value of the Company’s common stock on the date of grant. Prior to the Company’s initial public offering (“IPO”) in November 2021, RSUs granted by the Company vest upon the satisfaction of both a service-based vesting condition, which is typically four years , and a liquidity event-related performance vesting condition. 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 F-15 Table of Contents 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. The Company has granted founder performance-based restricted stock units (“founder PSUs”) that contain a market condition in the form of future stock price targets. The grant date fair value of the founder PSUs was determined using a Monte Carlo simulation model and the Company estimates the derived service period of the founder PSUs. The grant date fair value of founder PSUs containing a market condition is recorded as stock-based compensation over the derived service period using the accelerated attribution method. If the stock price goals are met sooner than the derived service period, any unrecognized compensation expenses related to the founder PSUs will be expensed during the period the stock price targets are achieved. Provided that each founder continues to be employed by the Company through the derived service period, stock-based compensation expense is recognized over the derived service period, regardless of whether the stock price goals are achieved. Interest Income —Interest income consists of interest earned on cash and cash equivalents. Interest Expense —Interest expense includes mainly the interest incurred on outstanding indebtedness, as well as amortization of deferred financing costs, mainly debt origination and commitment fees. Debt origination fees are amortized on a straight-line basis over the commitment period. Net Loss Per Share —The Company calculated basic and diluted net loss per share by dividing income available to common stockholders by the weighted-average number of shares of common stock during each period. Diluted net loss per share available to common shareholders was computed by giving effect to all potentially dilutive common stock equivalents outstanding for the period. In periods in which the Company reports a net loss available to common shareholders, diluted net loss per share available to common shareholders is the same as basic net loss per share available to common shareholders, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. 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 covering eligible employees. Participants may contribute a portion of their annual compensation limited to a maximum annual amount set by the Internal Revenue Service. The Company previously matched 50 % of an eligible employee’s contribution up to 3 % of wages. An employee becomes eligible once the individual has worked at the Company for 6 months, has worked 500 or more hours, and is 21 years or older. The Company has temporarily paused this matching contribution, effective in the fourth fiscal quarter of 2022. Recently Adopted Accounting Pronouncements 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. 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 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. 2024-03, "Disaggregation of Income Statement Expenses (Subtopic 220-40)." The ASU requires public entities to disaggregate, in a tabular presentation, certain income statement expenses into different categories, such as purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The guidance is effective for fiscal years beginning after December 15, 2026, with early adoption permitted, and may be applied retrospectively. The Company is F-16 Table of Contents 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. 2. REVENUE RECOGNITION Nature of products and services The Company has one revenue stream. 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 28, 2025, December 29, 2024 and December 31, 2023 disaggregated by significant revenue category: (dollar amounts in thousands) December 28, 2025 December 29, 2024 December 31, 2023 Owned Digital Channels $ 234,874 $ 205,688 $ 212,872 In-Store Channel (Non-Digital component) 259,652 295,300 242,073 Marketplace Revenue 184,948 175,838 129,096 Total Revenue $ 679,474 $ 676,826 $ 584,041 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 Loyalty Liability 3,528 — — Total Gift Cards and Loyalty Liability $ 7,177 $ 4,385 $ 2,797 F-17 Table of Contents 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 Revenue recognized from gift card liability balance at the beginning of the year $ 633 $ 730 $ 480 Revenue recognized from loyalty liability balance at the beginning of the year $ — $ — $ — 3. FAIR VALUE The following tables present information about the Company’s financial liabilities measured at fair value on a recurring basis: Fair Value Measurements as of December 28, 2025 Fair Value Measurements as of December 29, 2024 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 (dollar amounts in thousands) 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. The fair value of the contingent consideration was determined based on significant inputs not observable in the market. Contingent Consideration 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”). As of the second anniversary of the closing date of the acquisition, the Company calculated the delta between the Reference Price and the VWAP Price for the upfront portion of the purchase price as $ 13.62 . 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 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 F-18 Table of Contents 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. (dollar amounts in thousands) Contingent consideration Balance—December 25, 2022 $ 21,296 True-up payment ( 10,421 ) Current portion of contingent consideration included in other current liabilities ( 6,000 ) Change in fair value 3,475 Balance—December 31, 2023 $ 8,350 Change in fair value 6,624 Balance—December 29, 2024 $ 14,974 Milestone payment ( 7,000 ) Change in fair value ( 974 ) Balance—December 28, 2025 $ 7,000 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 F-19 Table of Contents 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 Fiscal Year Ended December 28, 2025 Total Level 1 Level 2 Level 3 Impairment Losses (dollar amounts in thousands) Certain property and equipment, net $ — $ — $ — $ — $ 9,677 Operating lease assets $ 2,437 $ — $ — $ 2,437 $ 1,594 Carrying Value at December 29, 2024 Fiscal Year Ended December 29, 2024 Total Level 1 Level 2 Level 3 Impairment Losses (dollar amounts in thousands) Certain property and equipment, net $ — $ — $ — $ — $ 1,347 Operating lease assets $ 6,001 $ — $ — $ 6,001 $ 389 Carrying Value at December 31, 2023 Fiscal Year Ended December 31, 2023 Total Level 1 Level 2 Level 3 Impairment Losses (dollar amounts in thousands) 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 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 %. 4. PROPERTY AND EQUIPMENT, NET Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful life. A summary of property and equipment is as follows: (dollar amounts in thousands) December 28, 2025 December 29, 2024 Leasehold improvements $ 347,023 $ 303,035 Kitchen equipment 136,136 107,475 Computers and other equipment 49,541 44,295 Furniture and fixtures 50,072 43,045 Assets not yet placed in service 36,691 38,047 Total property and equipment 619,463 535,897 Less: accumulated depreciation ( 292,560 ) ( 239,412 ) Property and equipment - net $ 326,903 $ 296,485 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. 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. F-20 Table of Contents 5. GOODWILL AND INTANGIBLE ASSETS, NET The following table presents the changes in the Company’s Goodwill balance: Balance—December 29, 2024 $ 35,970 Disposal of Goodwill in Spyce Transaction ( 8,177 ) Balance—December 28, 2025 $ 27,793 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: (dollar amounts in thousands) December 28, 2025 December 29, 2024 Internal use software $ 52,524 $ 45,933 Developed technology — 20,050 Total intangible assets 52,524 65,983 Accumulated amortization ( 42,100 ) ( 41,943 ) 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. Estimated amortization for each of the next five years is as follows: (dollar amounts in thousands) 2026 $ 5,851 2027 3,506 2028 1,067 Total $ 10,424 6. ACCRUED EXPENSES Accrued expenses consist of the following: (dollar amounts in thousands) December 28, 2025 December 29, 2024 Fixed asset accrual $ 7,381 $ 5,983 Accrued general and sales tax 6,588 4,625 Accrued settlements and legal fees 3,723 3,529 Rent deferrals and accrued rent 1,036 1,220 Accrued delivery fee 969 970 Other accrued expenses 14,042 10,237 Total accrued expenses $ 33,739 $ 26,564 7. DEBT F-21 Table of Contents 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. 8. LEASES The components of lease cost were as follows: (dollar amounts in thousands) Classification December 28, 2025 December 29, 2024 December 31, 2023 Operating lease cost Occupancy and related expense General and administrative expense Pre-opening costs $ 58,022 $ 51,576 $ 48,168 Variable lease cost Occupancy and related expense General and administrative expense 13,263 12,219 11,055 Short term lease cost Occupancy and related expense General and administrative expense 416 612 422 Sublease income General and administrative expense — — ( 356 ) Total lease cost $ 71,701 $ 64,407 $ 59,289 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. See Note 1. As of December 28, 2025, future minimum lease payments for operating leases consisted of the following: (dollar amounts in thousands) 2026 $ 63,503 2027 68,070 2028 62,745 2029 61,179 2030 55,319 Thereafter 149,013 Total 459,829 Less: imputed interest 105,335 Total lease liabilities $ 354,494 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. A summary of lease terms and discount rates for operating leases as of December 28, 2025 and December 29, 2024 is as follows: F-22 Table of Contents December 28, 2025 December 29, 2024 Weighted-average remaining lease term (years): Operating Leases 7.16 7.32 Weighted-average discount rate: Operating Leases 6.88 % 6.75 % Supplemental cash flow information related to leases as of December 28, 2025, December 29, 2024 and December 31, 2023 as follows: December 28, 2025 December 29, 2024 December 31, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases, net of lease incentives $ 64,443 $ 39,965 $ 42,425 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 65,387 $ 46,167 $ 24,416 Derecognition of operating lease assets due to termination or impairment $ 1,594 $ 389 $ 4,291 9. COMMON STOCK The Company has a dual class common stock structure, whereby the Class A common stock is entitled to one vote per share and the Class B common stock is entitled to 10 votes per share. The Class A and Class B common stock have the same dividend and liquidation rights. 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, 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; provided, however, that the final conversion date may be extended by the affirmative vote of the holders of the majority of the voting power of the then-outstanding shares of Class A common stock not held by a founder or an affiliate or permitted transferee of a founder and entitled to vote generally in the election of directors, voting together as a single class. Class A and Class B common stock are collectively referred to as “common stock” throughout the notes to the consolidated financial statements, unless otherwise noted. F-23 Table of Contents As of December 28, 2025 and December 29, 2024, the Company had reserved shares of common stock for issuance in connection with the following: December 28, 2025 December 29, 2024 Options outstanding under the 2009 Stock Plan, 2019 Equity Incentive Plan, Spyce Food Co. 2016 Stock Option Plan and Grant Plan and 2021 Equity Incentive Plan 14,070,559 13,169,869 Shares reserved for achievement of Spyce milestones 250,000 500,000 Shares reserved for employee stock purchase plan 4,111,331 4,111,331 RSUs and PSUs outstanding under the 2019 Equity Incentive Plan and 2021 Equity Incentive Plan 5,283,226 5,410,024 Shares available for future issuance under the 2021 Equity Incentive Plan 6,652,380 8,516,216 Total reserved shares of common stock 30,367,496 31,707,440 10. STOCK-BASED COMPENSATION 2021 Equity Incentive Plan 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 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; are forfeited because of the failure to vest; or are reacquired or withheld (or not issued) to satisfy a tax withholding obligation or the purchase or exercise price. The total number of shares available for grant as of December 28, 2025 , was 6,652,380 . Options granted generally have vesting terms between twelve months and four years and have a contractual life of 10 years. 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 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. F-24 Table of Contents Spyce Acquisition In conjunction with the Spyce acquisition, the Company issued shares of restricted stock that were issued to certain Spyce employees. 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 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 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 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. F-25 Table of Contents Stock Options 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 28, 2025 and December 29, 2024 : (dollar amounts in thousands except share and per share amounts) Number of Shares Weighted- Average Exercise Price Per Share Weighted-Average Remaining Contractual Term (In Years) Aggregate Intrinsic Value Balance—December 31, 2023 13,219,388 $ 7.77 5.97 $ 53,758 Options granted 2,367,980 19.81 Options exercised ( 1,990,576 ) 6.42 Options forfeited ( 374,453 ) 15.71 Options expired ( 52,470 ) 17.65 Balance—December 29, 2024 13,169,869 $ 9.88 6.04 $ 297,037 Options granted 2,608,147 16.26 Options exercised ( 408,345 ) 7.75 Options forfeited ( 1,085,348 ) 18.52 Options expired ( 213,764 ) 17.81 Balance—December 28, 2025 14,070,559 $ 10.35 5.30 $ 12,769 Exercisable—December 28, 2025 10,804,076 $ 8.62 4.30 $ 12,693 Vested and expected to vest—December 28, 2025 14,070,559 $ 10.35 5.30 $ 12,769 The total intrinsic value of options exercised in fiscal years 2025, 2024 and 2023 was $ 4.3 million, $ 50.8 million and $ 7.5 million, respectively. The weighted-average fair value of options granted in fiscal years 2025, 2024 and 2023 was $ 8.24 , $ 9.72 , and $ 9.07 , respectively, all of which were granted to employees. The fair value of each option granted has been estimated as of the date of the grant using the Black-Scholes option-pricing model with the assumptions during the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023 included in the table below. The Company has elected to account for forfeitures as they occur. Input Fiscal Year Ended December 28, 2025 Fiscal Year Ended December 29, 2024 Fiscal Year Ended December 31, 2023 Risk-free interest rate 3.7 %- 4.3 % 3.4 %- 4.7 % 3.5 %- 4.9 % Expected term 5.7 - 6.3 years 5.8 - 6.2 years 5.8 - 6.2 years Expected Volatility 47.8 % 45.4 % 45.1 % Dividend yield 0 % 0 % 0 % 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. F-26 Table of Contents 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. Treasury notes with the same maturity as the expected term of the underlying options was used as the average risk-free interest rate. Expected Term —The expected term of options granted to was determined based on management’s expectations of the options granted, which are expected to remain outstanding. The Company calculated the expected term using the simplified method for “plain vanilla” stock option awards. Expected Volatility —Given the timing of the IPO occurring in 2021, there is not sufficient share price history that extends through the expected term of the options, as such, the Company has elected to use an approximation based on the volatility of other comparable public companies, which compete directly with the Company, over the expected term of the options. Dividend Yield —The Company has not issued regular dividends on common shares in the past nor does the Company expect to issue dividends in the foreseeable future. As such, the dividend yield has been estimated to be zero . 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 Restricted stock units During the fiscal years ended December 28, 2025 and December 29, 2024 , the Company issue d 752,781 a nd 535,789 RSUs, respectively, to certain employees, which vest upon the satisfaction of certain service periods. The fair value of these RSUs was determined based on the Company’s closing stock price the business day immediately preceding the date of grant. The service period of these RSUs is satisfied over a range of 0 to 4 years . The RSUs are excluded from common stock issued and outstanding until the satisfaction of these vesting conditions and are not considered a participating security for purposes of calculating net loss per share attributable to common stockholders. F-27 Table of Contents The following table summarizes the Company’s RSU activity for fiscal year ended December 28, 2025 : (dollar amounts in thousands except per share amounts) Number of Shares Weighted- Average Grant Date Fair Value Balance—December. 29, 2024 910,024 $ 17.72 Granted 752,781 13.49 Released ( 690,957 ) 18.87 Forfeited, cancelled, or expired ( 188,622 ) 17.48 Balance—December. 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. As of December 28, 2025, unrecognized compensation expense related to RSUs was $ 7.3 million and is expected to be recognized over a weighted-average period of 2.61 years . The fair value of shares earned as of the vesting date during the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023 was $ 12.7 million, $ 13.7 million , and $ 6.3 million, respectively. Performance stock units In October 2021, the Company granted 2,100,000 PSUs to each founder (the “founder PSUs”) for a total of 6,300,000 PSUs, under the 2019 Equity Incentive Plan. The founder PSUs vest upon the satisfaction of a service condition and the achievement of certain stock price goals. The founder PSUs are excluded from common stock issued and outstanding until the satisfaction of these vesting conditions and are not considered a participating security for purposes of calculating net loss per share attributable to common stockholders. The founder PSUs are eligible to vest beginning on the one-year anniversary of the effective date of the registration statement of the Company’s IPO, and expire ten years after the IPO date. The founder PSUs are comprised of seven tranches that are eligible to vest based on the achievement of stock price goals, ranging from $ 30.0 - $ 75.0 per share, measured over a consecutive 90-calendar day trailing trading period during the performance period as set forth below. Company Stock Price Target Number of PSUs Eligible to Vest 1 $ 30.00 900,000 2 $ 37.50 900,000 3 $ 45.00 900,000 4 $ 52.50 900,000 5 $ 60.00 900,000 6 $ 67.50 900,000 7 $ 75.00 900,000 F-28 Table of Contents The Company estimated the grant date fair value of the founder PSUs based on multiple stock price paths developed through the use of a Monte Carlo simulation model within a hybrid framework with two possible scenarios (IPO and Change of Control). A Monte Carlo simulation model also calculates a derived service period for each of the seven vesting tranches, which is the measure of the expected time to achieve each Company stock price target, as described above. A Monte Carlo simulation model requires the use of various assumptions, including the underlying stock price, volatility, expiration term, and the risk-free interest rate as of the valuation date, corresponding to the length of time remaining in the performance period, and expected dividend yield. The derived service period calculation also requires the cost of equity assumption to be used in the Monte Carlo simulation model. Term and volatility are typically the primary drivers of this valuation. An expiration term of 10 years (as defined in the grant agreements) was considered in the IPO scenario while an expiration term of 3 years was considered in the Change of Control scenario. A volatility of 52.0 percent was considered within the IPO scenario consistent with the maximum term to expiration; whereas, a common stock volatility of 90.5 percent was considered in the Change of Control scenario, which is based on the ASC 718 analysis. The weighted-average grant date fair value of the founders PSUs was $ 16.35 per share. 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. During the fiscal year ended December 29, 2024, the service condition and stock price goal for the first two tranches were met, resulting in 600,000 PSUs vesting and being released for each founder during that period (for a total of 1,800,000 PSUs vesting). 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 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 vested on March 15, 2025. The expense related to these RSUs is included within the RSU section above. 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: (dollar amounts in thousands) Fiscal Year Ended December 28, 2025 Fiscal Year Ended December 29, 2024 Fiscal Year Ended December 31, 2023 Stock-options $ 18,605 $ 11,773 $ 8,878 Restricted stock units 8,752 8,546 8,557 Performance stock units 9,118 18,705 32,097 Total stock-based compensation $ 36,475 $ 39,024 $ 49,532 11. INCOME TAXES 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 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. F-29 Table of Contents 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): (dollar amounts in thousands) Fiscal Year Ended December 28, 2025 Fiscal Year Ended December 29, 2024 Fiscal Year Ended December 31, 2023 Current: State $ 134 $ 111 $ 21 Total Current 134 111 21 Deferred: Federal ( 103 ) ( 1,432 ) 323 State 15 20 35 Total deferred ( 88 ) ( 1,412 ) 358 Total provision for income taxes (benefit) expense $ 46 $ ( 1,301 ) $ 379 The following table provides the updated requirements of ASU 2023-09 for 2025. See Note 1: 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) December 28, 2025 U.S. 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 % 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: December 29, 2024 December 31, 2023 Federal statutory rate 21.0 % 21.0 % Effect of: State taxes, net of federal benefit 4.2 % 6.7 % Permanent differences ( 1.9 %) ( 0.8 %) Change in valuation allowance ( 19.5 %) ( 18.5 %) Nondeductible executive compensation ( 20.0 %) ( 8.2 %) Stock compensation and related items 15.8 % — % Other 1.8 % ( 0.5 %) Total 1.4 % ( 0.3 %) F-30 Table of Contents Components of the Company’s net deferred tax assets/(liabilities) consisted of the following: (dollar amounts in thousands) December 28, 2025 December 29, 2024 Deferred tax assets: Net operating loss carryforward $ 244,898 $ 219,918 Charitable contributions 99 178 Stock-based compensation expense 5,611 5,458 Accrued expenses 440 614 Deferred revenue 1,078 1,331 Operating lease liabilities (1) 106,738 99,861 Outside tax basis in Spyce Foods 9,831 — Other 4,637 6,627 Total deferred tax assets 373,332 333,987 Valuation allowance ( 240,676 ) ( 202,709 ) Total deferred tax assets, net of valuation allowance 132,656 131,278 Deferred tax (liabilities): Depreciation and amortization differences ( 32,015 ) ( 39,580 ) Operating lease assets (1) ( 84,122 ) ( 77,639 ) State deferred taxes ( 16,793 ) ( 14,420 ) Total deferred tax liabilities ( 132,930 ) ( 131,639 ) Net deferred tax (liability) asset $ ( 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. As of the fiscal years ended December 28, 2025 and December 29, 2024, the Company is in a net deferred tax asset position of $ 240.4 million and $ 202.7 million, respectively. The deferred tax assets consist principally of net operating loss carryforwards. The future realization of the tax benefits from existing temporary differences and tax attributes ultimately depends on the existence of sufficient taxable income. In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. In concluding on its evaluation, Company management placed significant emphasis on guidance in ASC 740, which states that “a cumulative loss in recent years is a significant piece of negative evidence that is difficult to overcome.” Such objective evidence limits the ability to consider other subjective evidence, such as the Company’s projections for future growth. On the basis of this evaluation, as of December 28, 2025 and December 29, 2024, a full valuation allowance of $ 240.7 million and $ 202.7 million, respectively, has been recorded against the deferred tax assets, which represents an increase of $ 38.0 million year over year. As of December 28, 2025, the Company had U.S. Federal net operating loss carryforwards of $ 867.6 million, of which $ 765.7 million may be carried forward indefinitely, and the remaining carryforwards $ 101.9 million expire at various dates from 2029 through 2037. As of December 28, 2025, the Company had state net operating loss carryforwards of $ 787.6 million, of which $ 93.5 million may be carried forward indefinitely, and the remaining carryforwards of $ 694.1 million expire at various dates from 2025 through 2044. The future realization of the Company’s net operating loss carryforwards and other tax attributes may also be limited by the change in ownership rules under the U.S. Internal Revenue Code Section 382. 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 F-31 Table of Contents 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. Currently, the limitations imposed by Section 382 are not expected to impair the Company’s ability to fully realize its net operating losses. Future changes in the Company’s stock ownership, some of which are outside of the Company’s control, could result in an additional ownership change under Section 382 of the Code; 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 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 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. A tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation, on the basis of the technical merits. As of December 28, 2025 and December 29, 2024, the Company had approximately $ 2.1 million and $ 0.1 million of unrecognized tax benefits, respectively. Due to the valuation allowance position, none of the unrecognized tax benefits, if recognized, will impact the Company’s effective tax rate. The Company recognizes accrued interest and penalties, if any, related to uncertain tax positions in income tax provision in its financial statements, if applicable. The Company did not have any accrued interest of penalties associated with any uncertain tax positions, and no interest expense was recognized during the fiscal years ended December 28, 2025 and December 29, 2024. The following table summarizes the activity related to the Company’s gross uncertain tax positions for the fiscal years ended December 28, 2025 and December 29, 2024: (dollar amounts in thousands) December 28, 2025 December 29, 2024 Uncertain Tax Positions Beginning of year balance $ 93 $ 431 Increases (decreases) related to current year tax positions 2,019 ( 338 ) End of year balance $ 2,112 $ 93 On March 27, 2020, President Trump signed into law the CARES Act (as defined below). Intended to provide economic relief to those impacted by the COVID-19 pandemic, the CARES Act includes provisions, among others, to enhance business’ liquidity and provide for refundable employee retention tax credits, which could be used to offset payroll tax liabilities. 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 did not have a material impact on the Company’s consolidated financial statements. 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. 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. F-32 Table of Contents Income taxes paid (net of refunds) are as follows: (dollar amounts in thousands) December 28, 2025 Federal $ — State — Texas ( 67 ) Other States — Total $ ( 67 ) 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. 12. NET LOSS PER SHARE During the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023, the rights, including the liquidation and dividend rights, of the holders of Class A and Class B common stock were identical, except with respect to voting. 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: (dollar amounts in thousands) Fiscal Year Ended December 28, 2025 Fiscal Year Ended December 29, 2024 Fiscal Year Ended December 31, 2023 Numerator: Net loss $ ( 134,065 ) $ ( 90,373 ) $ ( 113,384 ) Denominator: Weighted-average common shares outstanding—basic and diluted 117,956,165 114,321,672 111,907,675 Earnings per share—basic and diluted $ ( 1.14 ) $ ( 0.79 ) $ ( 1.01 ) The Company’s potentially dilutive securities, which include options to purchase common stock, have been excluded from the computation of diluted net loss per share as the effect would be antidilutive. Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share is the same. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect: Fiscal Year Ended December 28, 2025 Fiscal Year Ended December 29, 2024 Fiscal Year Ended December 31, 2023 Options to purchase common stock 14,070,559 13,169,869 13,219,388 Time-based vesting restricted stock units 783,226 910,024 951,517 Performance stock units 4,500,000 4,500,000 6,621,428 Contingently issuable stock 250,000 500,000 714,285 Total common stock equivalents 19,603,785 19,079,893 21,506,618 F-33 Table of Contents 13. RELATED-PARTY TRANSACTIONS 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. 14. COMMITMENTS AND CONTINGENCIES Lease Commitments The Company is obligated under various operating leases related to its office facilities, restaurant locations, and certain equipment under non-cancelable operating leases that expire on various dates. Under certain of these leases, the Company is liable for contingent rent based on a percentage of sales in excess of specified thresholds and typically responsible for its proportionate share of real estate taxes, CAMs and other occupancy costs. Refer to Note 8, Leases, for additional information. Purchase Obligations 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. The Company does not believe that the ultimate resolution of any of these matters will have a material effect on the Company’s financial position, results of operations, liquidity, or capital resources. However, an increase in the number of these claims, or one or more successful claims under which the Company incurs greater liabilities than the Company currently anticipates, could materially and adversely affect the Company’s business, financial position, results of operations, and cash flows. 15. Reportable Segment 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 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 F-34 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: Fiscal Year Ended December 28, 2025 Fiscal Year Ended December 29, 2024 Fiscal Year Ended December 31, 2023 General and administrative Operating support center cost (1) $ 103,745 $ 107,626 $ 95,452 Stock-based compensation 36,475 39,024 49,532 Other expenses (2) 3,181 3,292 1,778 Total General and administrative $ 143,401 $ 149,942 $ 146,762 (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, 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. 16. 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: F-35 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. See Note 3. 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. F-36 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES None.