What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-26 compared with 2025-02-21 · 242 added, 257 removed, 1152 unchanged (30% of the section changed)

4 unchanged sentences

Consolidated Balance Sheets

Consolidated Statements of Income (Loss )

Consolidated Statements of Comprehensive Income (Loss )

Consolidated Statements of Income

Consolidated Statements of Comprehensive Income

Consolidated Statements of Stockholders' Equity

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Prior to filing, management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control—Integrated Framework.

Prior to filing, management, including our Chief Executive Officer and Principal Financial Officer and Corporate Controller, assessed the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control—Integrated Framework.

Based on the results of our evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2025

Remediation of Material Weakness

As discussed in our Annual Report on Form 10-K for the year ended December 27, 2023, management concluded that there was a material weakness in our internal control over financial reporting related to the calculation of state deferred taxes and the related income tax expense (benefit) as of the end of our fiscal year ended December 27, 2023.

In response to the identified material weakness at December 27, 2023, our management, with oversight from our Audit Committee, made the following changes and remediation efforts with respect to our controls and procedures:

▪ Hired a Head of Tax with over 20 years of tax leadership experience including working with Up-C structures, enhancing controls, processes, and tax technology.

▪ Strengthened the depth and experience of our tax department with additional hires who possess the technical expertise necessary to manage the unique complexities of the Up-C structure.

▪ Engaged with a new third-party tax consulting firm and completed a full review of our tax control environment, further bolstering our existing control processes and documentation standards.

▪ Developed enhanced management review control procedures over all related tax controls, but specifically the calculation of state deferred taxes and the related income tax expense (benefit).

▪ Established road map for further tax technology enhancements and a continuous improvement program to monitor the effectiveness of the implemented changes and make adjustments as needed.

After completing our testing of the design and operational effectiveness of these controls and updated procedures, management concluded that we remediated the previously identified material weakness as of December 25, 2024.

Shake Shack Inc.

Form 10-K | 73

Our independent registered public accounting firm, Ernst & Young LLP, has issued an attestation report on the effectiveness of our internal control over financial reporting as of December 31, 2025, as stated in their report included in this Annual Report on Form 10-K.

Changes in Internal Control over Financial Reporting

Except as otherwise discussed above, there were no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect such controls, including any corrective actions with regard to significant deficiencies and material weaknesses.

There were no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect such controls, including any corrective actions with regard to significant deficiencies and material weaknesses.

Shake Shack Inc.

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We have audited the accompanying consolidated balance sheets of Shake Shack Inc.

(the Company) as of December 25, 2024 and December 27, 2023, the related consolidated statements of income (loss), comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 25, 2024, and the related notes and financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

(the Company) as of December 31, 2025 and December 25, 2024, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and December 25, 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S.

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Auditing management’s accounting for the TRA liability is highly judgmental because it requires the evaluation of the Company’s future qualified taxable income, which is inherently subjective, over the term of the TRA as a basis to determine if the related tax benefits are expected to be realized.

Shake Shack Inc.

Form 10-K | 76

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s financial forecasting process.

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In addition, we performed sensitivity analyses to evaluate the impact of changes in assumptions to future taxable income.

Shake Shack Inc.

Form 10-K | 68

/s/ Ernst & Young LLP

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We have audited Shake Shack Inc.’s (the Company’s) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), (the COSO criteria).

In our opinion, Shake Shack Inc.

(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 25, 2024, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 25, 2024 and December 27, 2023, the related consolidated statements of income (loss), comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 25, 2024, and the related notes and financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”) and our report dated February 21, 2025 expressed an unqualified opinion thereon.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and December 25, 2024, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”) and our report dated February 26, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

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Cash and cash equivalents $ 360,123 $ 320,714

Marketable securities — 68,561

Accounts receivable, net 32,962 19,687

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SHAKE SHACK INC.

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

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TOTAL EXPENSES 1,382,798 1,249,570 1,081,612

INCOME (LOSS) FROM OPERATIONS 3,038 5,921 ( 26,894 )

INCOME FROM OPERATIONS 62,508 3,038 5,921

Other income, net 12,260 13,251 12,776

Interest expense ( 2,159 ) ( 2,045 ) ( 1,717 )

INCOME (LOSS) BEFORE INCOME TAXES 14,244 16,980 ( 24,285 )

INCOME BEFORE INCOME TAXES 72,609 14,244 16,980

Income tax expense (benefit) 22,903 3,424 ( 4,010 )

NET INCOME (LOSS) 10,820 20,990 ( 23,105 )

Net income (loss) attributable to non-controlling interests 613 726 ( 1,876 )

NET INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.

NET INCOME 49,706 10,820 20,990

Net income attributable to non-controlling interests 3,981 613 726

NET INCOME ATTRIBUTABLE TO SHAKE SHACK INC.

$ 45,725 $ 10,207 $ 20,264

Earnings (loss) per share of Class A common stock:

Earnings per share of Class A common stock:

Basic $ 1.14 $ 0.26 $ 0.51

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SHAKE SHACK INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

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2024 December 27

Net income (loss) $ 10,820 $ 20,990 $ ( 23,105 )

Net income $ 49,706 $ 10,820 $ 20,990

Other comprehensive income (loss), net of tax (1) :

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OTHER COMPREHENSIVE INCOME (LOSS) — 2 ( 3 )

COMPREHENSIVE INCOME (LOSS) 10,822 20,987 ( 23,106 )

Comprehensive income (loss) attributable to non-controlling interests 613 726 ( 1,876 )

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.

COMPREHENSIVE INCOME 49,706 10,822 20,987

Comprehensive income attributable to non-controlling interests 3,981 613 726

COMPREHENSIVE INCOME ATTRIBUTABLE TO SHAKE SHACK INC.

$ 45,725 $ 10,209 $ 20,261

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Retained Earnings (Accumulated Deficit)

Accumulated Other Comprehensive Income (Loss) Non-

Accumulated Other Comprehensive Loss

Shares Amount Shares Amount

BALANCE DECEMBER 28, 2022 39,284,998 $ 39 2,869,513 $ 3 $ 415,649 $ ( 3,487 ) $ — $ 24,632 $ 436,836

Net loss — — — — — ( 21,229 ) — ( 1,876 ) ( 23,105 )

Net income — — — — — 20,264 — 726 20,990

Other comprehensive loss:

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Net income — — — — — 10,207 — 613 10,820

Other comprehensive loss:

Other comprehensive income:

Net change in foreign currency translation adjustment — — — — — — 2 — 2

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Net income — — — — — 45,725 — 3,981 49,706

Other comprehensive income:

Net change in foreign currency translation adjustment — — — — — — 2 — 2

Equity-based compensation — — — — 19,953 — — — 19,953

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OPERATING ACTIVITIES

Net income (loss) (including amounts attributable to non-controlling interests) $ 10,820 $ 20,990 $ ( 23,105 )

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

Net income (including amounts attributable to non-controlling interests) $ 49,706 $ 10,820 $ 20,990

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization expense 106,600 102,468 91,242

14 unchanged sentences

5,248 32,368 3,007

Unrealized loss on equity securities — — 158

Changes in operating assets and liabilities:

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Purchases of equity securities

— ( 690 ) ( 865 )

Sales of equity securities

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Payments on principal of finance leases ( 5,511 ) ( 3,964 ) ( 3,272 )

Deferred financing costs

Distributions paid to non-controlling interest holders

( 1,842 ) ( 482 ) ( 162 )

Payments under tax receivable agreement ( 37 ) — —

Net proceeds from stock option exercises 123 1,627 744

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$ 360,123 $ 320,714 $ 224,653

Supplemental cash flow information and non-cash investing and financing activities are further described in the accompanying notes.

See accompanying Notes to Consolidated Financial Statements.

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Equity-Based Compensation

Earnings (Loss) Per Share

Earnings Per Share

Supplemental Cash Flow Information

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Related Party Transactions

S egment Reporting

Segment Reporting

Geographic Information

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Marketable Securities

Marketable securities classified as held-to-maturity securities consist of U.S.

Treasuries for which the Company has the ability and intent to hold to maturity and are reported at amortized cost, net of a valuation allowance for credit losses.

Interest income and the amortization of discounts and premiums are recorded in Other income, net on the Consolidated Statements of Income (Loss).

No expected credit losses were recognized as of December 25, 2024 and December 27, 2023.

In fiscal 2023 and 2024, the Company had marketable securities classified as held-to-maturity securities, which consisted of U.S.

Treasuries for which the Company had the ability and intent to hold to maturity and were reported at amortized cost, net of a valuation allowance for credit losses.

As of December 31, 2025 and December 25, 2024, the Company did not have any investments in marketable securities.

Interest income and the amortization of discounts and premiums are recorded in Other income, net on the Consolidated Statements of Income.

Accounts Receivable, Net

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The collectability of accounts receivable is evaluated based on a variety of factors, including historical experience, current economic conditions and other factors.

Inventories, which consist of food, paper goods, beverages, beer, wine and retail merchandise, are valued at the lower of weighted average cost or net realizable value.

Inventories, which primarily consist of food, paper goods, beverages, and retail merchandise, are valued at the lower of weighted average cost or net realizable value.

No adjustment is deemed necessary to reduce inventory to net realizable value due to the rapid turnover and high utilization of inventory.

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Costs for refurbishments and improvements that significantly increase the productive capacity or extend the useful life of the assets are capitalized.

When assets are disposed, the resulting gain or loss is recognized in Impairments, loss on disposal of assets, and Shack closures on the Consolidated Statements of Income (Loss).

When assets are disposed, the resulting gain or loss is recognized in Impairments, loss on disposal of assets, and Shack closures on the Consolidated Statements of Income.

Valuation of Long-lived Assets

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Deferred Financing Costs

Deferred financing costs incurred in connection with the issuance of long-term debt and establishing credit facilities are capitalized and amortized in Interest expense on the Consolidated Statements of Income (Loss) based on the related debt agreements.

Deferred financing costs are included in Other assets on the Consolidated Balance Sheets.

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Implementation costs associated with cloud computing arrangements hosted by third-party vendors are capitalized when incurred during the application development phase.

Amortization is calculated on a straight-line basis over the contractual term of the cloud computing arrangement and is recorded within General and administrative expenses on the Consolidated Statements of Income (Loss).

As of December 31, 2025 and December 25, 2024, capitalized implementation costs from cloud computing arrangements totaled $ 2,376 and $ 4,051 , respectively, net of accumulated amortization.

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Annual liquor license renewal fees, for both types of licenses, are expensed over the renewal term.

As of December 25, 2024 and December 27, 2023, indefinite-lived intangible assets relating to transferable liquor licenses totaled $ 2,040 and $ 1,903 , respectively.

As of December 31, 2025 and December 25, 2024, indefinite-lived intangible assets relating to transferable liquor licenses totaled $ 2,038 .

Indefinite-lived intangible assets are evaluated for impairment at least annually during the fourth quarter, and whenever events or circumstances indicate that an impairment may exist.

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Gift card breakage income for fiscal 2025, 2024, and 2023 was $ 525 , $ 413 and $ 327 , respectively.

During fiscal 2022, the Company concluded it had accumulated a sufficient level of historical data from a large pool of homogeneous transactions to allow it to reasonably and objectively determine an estimated gift card breakage rate and the pattern of actual gift card redemptions.

In accordance with ASC 250, Accounting Changes and Error Corrections, the Company concluded that this accounting change represented a change in accounting estimate.

As a result, a cumulative catch-up adjustment was recorded during fiscal 2022 that resulted in $ 1,281 of gift card breakage income.

Gift card breakage income is included in Shack sales on the Consolidated Statements of Income (Loss).

Gift card breakage income is included in Shack sales on the Consolidated Statements of Income.

Licensing Revenue

Licensing revenue includes initial territory fees, Shack opening fees and ongoing sales-based royalty fees from licensed Shacks.

Licensing revenue includes initial territory fees, Shack opening fees, termination fees and ongoing sales-based royalty fees from licensed Shacks.

Generally, the licenses granted to develop, open and operate each Shack in a specified territory are the predominant good or service transferred to the licensee and represent distinct performance obligations.

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Equity-based compensation expense is measured based on the grant-date fair value of the awards.

For awards with graded-vesting features and service conditions only, compensation expense is recognized on a straight-line basis over the total requisite service period for the entire award.

For awards with graded-vesting features and a combination of service and performance conditions, compensation expense is recognized using a graded-vesting attribution method over the vesting period based on the most probable outcome of the performance conditions.

For awards with graded-vesting features and a combination of service and performance conditions, compensation expense is recognized using a graded-vesting attribution method over the vesting period.

For awards with cliff vesting features and a combination of service and performance conditions, compensation expense is recognized on a straight-line basis over the total requisite service period for the entire award based on the most probable outcome of the performance conditions.

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Forfeitures are recognized as they occur for all equity awards.

Equity-based compensation expense is included in General and administrative expenses and Labor and related expenses on the Consolidated Statements of Income (Loss).

Equity-based compensation expense is included in General and administrative expenses and Labor and related expenses on the Consolidated Statements of Income.

Most advertising costs are expensed as incurred, with the exception of advertising production costs, which are expensed at the time the advertising first takes place.

Advertising costs totaled $ 22,169 , $ 12,437 and $ 12,376 in fiscal 2024, fiscal 2023 and fiscal 2022, respectively, and are included in General and administrative expense and Other operating expenses on the Consolidated Statements of Income (Loss).

Shake Shack Inc.

Form 10-K | 89

Shake Shack currently leases all of its Company-operated Shacks, the home office and certain equipment under various non-cancelable lease agreements that expire on various dates through 2045.

Advertising costs totaled $ 34,138 , $ 22,169 and $ 12,437 in fiscal 2025, fiscal 2024 and fiscal 2023, respectively, and are included in General and administrative expense and Other operating expenses on the Consolidated Statements of Income.

Shake Shack currently leases all of its Company-operated Shacks, Shack Support Centers and certain equipment under various non-cancelable lease agreements that expire on various dates through 2045.

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.

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If these criteria are met, the Company has identified a lease, within the contract, and therefore a right-of-use asset and lease liability are recorded on the Consolidated Balance Sheets.

Upon possession of a leased asset, the Company determines whether the lease is an operating or finance lease.

Upon possession of a leased asset, the Company

Shake Shack Inc.

Form 10-K | 81

determines whether the lease is an operating or finance lease.

All of the Company's real estate leases are classified as operating leases and most equipment leases are classified as finance leases.

Generally, real estate leases have initial terms ranging from 10 to 15 years and typically include two five-year renewal options.

Generally, real estate leases have initial terms ranging from ten to fifteen years and typically include two five-year renewal options.

Renewal options are generally not recognized as part of the right-of-use assets and lease liabilities as it is not reasonably certain at commencement date that the Company would exercise the renewal options.

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When the achievement of such sales thresholds are deemed to be probable, contingent rent is accrued in proportion to the sales recognized during the period.

For operating leases, fixed lease payments are recognized as operating lease costs on a straight-line basis over the lease term and are reported in specific line items on the Consolidated Statements of Income (Loss).

For operating leases, fixed lease payments are recognized as operating lease costs on a straight-line basis over the lease term and are included in specific line items on the Consolidated Statements of Income.

Lease expense incurred before a Shack opens is recorded in Pre-opening costs.

Once a Company-operated Shack opens, the straight-line lease expense and contingent rent, if applicable, are recorded in Occupancy and related expenses.

Once a Company-operated Shack opens, the straight-line lease expense and contingent rent, if applicable, are included in Occupancy and related expenses.

Many of these leases also require the Company to pay real estate taxes, common area maintenance costs and other occupancy costs which are included in Occupancy and related expenses.

Finance leases are recognized in depreciation expense on a straight-line basis over the remaining lease term, along with recognition of interest expense associated with accretion of the lease liability.

For both operating and finance leases that contain lease and non-lease components, the components are combined and accounted for as a single lease component.

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Leases with a term of 12 months or less are deemed short-term and are not recognized on the Consolidated Balance Sheets.

Fixed lease payments for short-term leases are recognized on a straight-line basis over the lease term.

Fixed lease payments for short-term leases are recognized on a straight-line basis over the lease term on the Consolidated Statements of Income.

The Company calculates operating lease right-of-use assets and lease liabilities as the present value of fixed lease payments over the reasonably certain lease term beginning at the commencement date.

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Pre-opening Costs

Pre-opening costs are expensed as incurred and consist primarily of occupancy, manager and team member wages, cookware, travel and lodging costs for the opening training team and other supporting team members, marketing expenses, legal fees, and inventory costs incurred prior to the opening of a Shack.

Shake Shack Inc.

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Income taxes are accounted for pursuant to the asset and liability method which requires the recognition of deferred income tax assets and liabilities related to the expected future tax consequences arising from temporary differences between the carrying values and tax bases of assets and liabilities based on enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse.

Any effects of changes in income tax rates or laws are included in Income tax expense on the Consolidated Statements of Income (Loss) in the period of enactment.

A valuation allowance is recognized if we determine it is more likely than not that all or a portion of a deferred tax asset will not be recognized.

Any effects of changes in income tax rates or laws are included in Income tax expense on the Consolidated Statements of Income in the period of enactment.

A valuation allowance is recognized if the Company determines it is more likely than not that all or a portion of a deferred tax asset will not be recognized.

In making such determination, the Company considers all available evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent and expected future results of operations.

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Recently Adopted Accounting Pronouncements

We adopted the Accounting Standards Update ("ASU") summarized below in fiscal 2024.

The Company adopted the Accounting Standards Update ("ASU") summarized below in fiscal 2025.

ASU Description Date Adopted

Segment Reporting (Topic 280):

Improvements to

Reportable Segment

(ASU 2023-07)

This ASU requires that an entity report segment information in accordance with Topic 280, Segment Reporting.

The amendment in the ASU is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.

December 25, 2024

Recently Issued Accounting Pronouncements

Accounting standards updates ("ASU") applicable to the Company that were recently issued are summarized below.

ASU Description Effective Date

Income Taxes (Topic 740):

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The amendment in the ASU is intended to enhance the transparency and decision usefulness of income tax disclosures.

Early adoption is permitted.

The Company is currently evaluating the impact this standard will have on our Consolidated Financial Statements and related disclosures.

Fiscal years beginning after December 15, 2024

December 31, 2025

Recently Issued Accounting Pronouncements

ASUs applicable to the Company that were recently issued are summarized below.

ASU Description Effective Date

Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

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All other ASUs issued but not yet effective are not applicable or not expected to have a material impact on the Company’s future Consolidated Financial Statements.

Shake Shack Inc.

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Revenue Recognition

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Sales-based royalties 51,532 43,487 39,853

Initial territory and opening fees 1,560 861 1,012

Initial territory, opening, and termination fees

2,608 1,560 861

Total revenue $ 1,445,306 $ 1,252,608 $ 1,087,533

The aggregate amount of the transaction price allocated to performance obligations that were unsatisfied or partially unsatisfied as of December 31, 2025 was $ 27,308 .

The Company expects to recognize this amount as revenue over a long-term period, as the license term for each Shack ranges from five to twenty years .

The Company expects to recognize this amount as revenue over a long-term period, as the majority of license terms for each Shack range from ten to twenty years .

This amount excludes any variable consideration related to sales-based royalties.

Shake Shack Inc.

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Contract Balances

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Deferred revenue 2,123 1,461

Shake Shack Inc.

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FAIR VALUE MEASUREMENTS

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The carrying values of the Company's Cash and cash equivalents, Accounts receivable, net, Accounts payable and Accrued expenses approximate fair value due to the short-term nature of these financial instruments.

The Company's marketable securities were as follows:

2024 December 27

Held-to-maturity securities

The Company classified its held-to-maturity securities as Level 1 within the fair value hierarchy.

Refer to Note 8, Debt, for additional information relating to the fair value of the Company's outstanding debt instruments.

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Realized gain on sale of equity securities — — 81

Unrealized loss on equity securities — — ( 158 )

Total $ — $ 640 $ 2,966

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The Company performs its impairment analysis at least annually or whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable.

During fiscal 2024, the Company determined to close and executed the closure of nine underperforming Company-operated Shacks in California, Ohio and Texas as these Shacks were not projected to provide acceptable returns in the foreseeable future, in part due to changes in the trade area and the negative impact on other Shacks within their proximity by cannibalizing sales.

The total expenses related to the identified Shack closures were $ 29,348 , of which $ 27,633 was impairment expense, related to right-of-use assets, and property, plant and equipment, and $ 1,715 was miscellaneous Shack closure expense.

The fair values of assets were determined using an income-based approach and are classified as Level 3 within the fair value hierarchy.

Significant inputs include projections of future cash flows, Shack sales, profitability, discount rates, and sublease income.

During fiscal 2025, the Company closed one Shack due to a change in ownership of the property and subsequent termination of the lease by the landlord, which resulted in a non-cash impairment charge of $ 1,179 related to right-of-use assets, and property, plant and equipment.

The Company also recorded a gain on lease termination partially offset by miscellaneous Shack closure expense which totaled $( 87 ).

Additionally in fiscal 2025, the Company recognized miscellaneous Shack closure expense of $ 1,687 and a non-cash impairment charge of $ 170 related to the nine Shack closures in fiscal 2024.

During fiscal 2024, the Company recognized a non-cash impairment charge of $ 27,633 and miscellaneous Shack closure expense of $ 1,715 related to the closure of nine underperforming Company-operated Shacks in California, Ohio and Texas.

No impairment charges were recognized during fiscal 2023.

During fiscal 2022, the Company recognized an impairment charge of $ 99 related to one Shack.

These impairment charges were included in Impairments, loss on disposal of assets, and Shack closures on the Consolidated Statements of Income (Loss).

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The fair values of assets were determined using an income-based approach and are classified as Level 3 within the fair value hierarchy.

Significant inputs include projections of future cash flows, Shack sales, profitability, discount rates, and sublease income.

These impairment charges were included in Impairments, loss on disposal of assets, and Shack closures on the Consolidated Statements of Income.

ACCOUNTS RECEIVABLE, NET

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Delivery receivables 5,187 4,225

Vendor rebates

Other receivables 7,950 3,075

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Depreciation expense was $ 106,574 , $ 102,442 and $ 91,216 for fiscal 2025, fiscal 2024 and fiscal 2023, respectively.

Shake Shack Inc.

Form 10-K | 85

SUPPLEMENTAL BALANCE SHEET INFORMATION

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$ 30,080 $ 21,801

Shake Shack Inc.

Form 10-K | 94

The components of Other current liabilities were as follows:

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(1) during any fiscal quarter commencing after the fiscal quarter ending on June 30, 2021 (and only during such fiscal quarter), if the last reported sale price of the Company's Class A common stock, par value $ 0.001 per share, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130 % of the conversion price for the Convertible Notes on each applicable trading day;

(2) during the five business day period after any 10 consecutive trading day period (the “measurement period”) in which the trading price (as defined in the Indenture) per one thousand dollar principal amount of the Convertible Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of Class A common stock and the conversion rate for the Convertible Notes on each such trading day;

(2) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price (as defined in the Indenture) per one thousand dollar principal amount of the Convertible Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of Class A common stock and the conversion rate for the Convertible Notes on each such trading day;

(3) if the Company calls such Convertible Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the Convertible Notes called (or deemed called) for redemption;

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On or after December 1, 2027, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders of the Convertible Notes may convert all or any portion of their Convertible Notes at any time, regardless of the foregoing circumstances.

The Convertible Notes had an initial conversion rate of 5.8679 shares of Class A common stock per one thousand dollar principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $ 170.42 per share of Class A common stock.

The fair value of the Convertible Notes was approximately $ 256,900 and $ 205,000 , respectively, as of December 25, 2024 and December 27, 2023, based on external pricing data, including available quoted market prices of these instruments, and consideration of comparable debt instruments with similar interest rates and trading frequency, among other factors, and is classified as a Level 2 measurement within the fair value hierarchy.

The Company may not redeem the Convertible Notes prior to March 6, 2025.

The Company may redeem for cash all or any portion of the Convertible Notes, at the Company's option, on or after March 6, 2025 if the last reported sale price of Class A common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100 % of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid special interest, if any, to, but excluding, the redemption date.

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common stock.

The fair value of the Convertible Notes was approximately $ 236,875 and $ 256,900 , respectively, as of December 31, 2025 and December 25, 2024, based on external pricing data, including available quoted market prices of these instruments, and consideration of comparable debt instruments with similar interest rates and trading frequency, among other factors, and is classified as a Level 2 measurement within the fair value hierarchy.

On or after March 6, 2025, the Company may redeem for cash all or any portion of the Convertible Notes, at the Company's option, if the last reported sale price of Class A common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100 % of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid special interest, if any, to, but excluding, the redemption date.

The Convertible Notes were not redeemable by the Company prior to March 6, 2025.

In addition, if Shake Shack undergoes a fundamental change (as defined in the indenture governing the Convertible Notes), subject to certain conditions, holders may require it to repurchase for cash all or any portion of their Convertible Notes at a repurchase price equal to 100 % of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid special interest, if any, to, but excluding, the fundamental change repurchase date.

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The Company maintains a revolving credit facility agreement ("Revolving Credit Facility") which permits borrowings up to $ 50,000 with the ability to increase available borrowings up to an additional $ 100,000 , subject to satisfaction of certain conditions.

The Revolving Credit Facility has a maturity date of March 5, 2026.

In fiscal 2023, the Company entered into the fourth amendment to the Revolving Credit Facility ("Fourth Amendment"), which, among other things, modified the benchmark interest rate to either:

In July 2025, the Company entered into the sixth amendment to the Revolving Credit Facility ("Sixth Amendment"), which, among other things, extends the maturity date until the earlier of (a) February 28, 2028, or (b) the date that is 91 days prior to the scheduled maturity date of any Convertible Notes outstanding at any time.

Outstanding borrowings under the Revolving Credit Facility bear interest at either:

(i) the base rate plus applicable margin ranging from 0.0 % to 1.5 % or (ii) the Secured Overnight Financing Rate (“SOFR”) plus applicable margin ranging from 1.0 % to 2.5 %, in each case dependent upon the net lease adjusted leverage ratio.

As of December 31, 2025 and December 25, 2024, no amounts were outstanding under the Revolving Credit Facility.

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Form 10-K | 87

The obligations under the Revolving Credit Facility are secured by a first-priority security interest in substantially all of the assets of SSE Holdings and the guarantors.

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Interest expense on Revolving Credit Facility Interest expense $ 61 $ 67 $ 74

Shake Shack Inc.

Form 10-K | 96

Classification December 31

14 unchanged sentences

Total lease liabilities $ 654,395 $ 562,940

Shake Shack Inc.

Form 10-K | 88

The components of lease expense were as follows:

12 unchanged sentences

Total lease cost $ 121,283 $ 104,917 $ 90,824

Shake Shack Inc.

Form 10-K | 97

As of December 31, 2025, future minimum lease payments for operating and finance leases consisted of the following:

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Finance leases 5.8 % 6.1 %

Shake Shack Inc.

Form 10-K | 89

Supplemental cash flow information related to leases was as follows:

7 unchanged sentences

Finance leases 9,553 4,792 8,972

Shake Shack Inc.

Form 10-K | 98

EMPLOYEE BENEFIT PLANS

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The Company reports a non-controlling interest representing the economic interest held by the other members of SSE Holdings.

The Third Amended and Restated Limited Liability Company Agreement, as further amended, (the "LLC Agreement") of SSE Holdings provides that holders of SSE Holdings, LLC membership interests ("LLC Interests") may, from time to time, require SSE Holdings to redeem all or a portion of their LLC Interests for newly-issued shares of Class A common stock on a one -for-one basis.

The Third Amended and Restated Limited Liability Company Agreement, as further amended, (the

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Form 10-K | 90

"LLC Agreement") of SSE Holdings provides that holders of SSE Holdings, LLC membership interests ("LLC Interests") may, from time to time, require SSE Holdings to redeem all or a portion of their LLC Interests for newly-issued shares of Class A common stock on a one -for-one basis.

In connection with any redemption or exchange, the Company will receive a corresponding number of LLC Interests, increasing the total ownership interest in SSE Holdings.

1 unchanged sentence

As such, future redemptions or direct exchanges of LLC Interests in SSE Holdings by the other members of SSE Holdings will result in a change in ownership and reduce the amount recorded as non-controlling interest and increase additional paid-in capital.

Shake Shack Inc.

Form 10-K | 99

The following table summarizes the ownership interest in SSE Holdings:

4 unchanged sentences

Total LLC Interests outstanding 42,689,070 100.0 % 42,523,781 100.0 %

The weighted average ownership percentages for the applicable reporting periods are used to attribute Net income (loss) and Other comprehensive income (loss) to the non-controlling interest holders and were as follows:

The weighted average ownership percentages for the applicable reporting periods are used to attribute Net income and Other comprehensive income to the non-controlling interest holders and were as follows:

2025 2024 2023

2 unchanged sentences

2025 2024 2023

Net income (loss) attributable to Shake Shack Inc.

Net income attributable to Shake Shack Inc.

$ 45,725 $ 10,207 $ 20,264

2 unchanged sentences

Transfers (to) from non-controlling interests:

Increase in additional paid-in capital as a result of the redemption of LLC Interests 3,517 265 313

Decrease in additional paid-in capital as a result of activity under stock compensation plan ( 5,614 ) ( 3,271 ) ( 2,978 )

Increase (decrease) in additional paid-in capital as a result of the redemption of LLC Interests ( 271 ) 3,517 265

Decrease in additional paid-in capital as a result of activity under the stock-based compensation plan ( 12,101 ) ( 5,614 ) ( 3,271 )

Total effect of changes in ownership interest on equity attributable to Shake Shack Inc.

2 unchanged sentences

2025 2024 2023

LLC Interests activity under the Company's stock compensation plan

LLC Interests activity under the Company's stock-based compensation plan

Number of LLC Interests received by Shake Shack Inc.

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Restricted Stock Units

In January 2015, the Company adopted the 2015 Incentive Award Plan (the "2015 Plan") under which it may grant up to 5,865,522 restricted stock units and other equity-based awards to team members, directors and officers.

In June 2024, the Company amended and restated the 2015 Plan (the “2025 Plan”) which authorizes the issuance of up to 842,321 additional shares of the Company’s Class A Common Stock and extends the term of the 2015 Plan by 10 years, among other things.

The Company is authorized to grant up to 6,707,843 restricted stock units and other equity-based awards to team members, directors and officers under the 2025 Incentive Award Plan (the “2025 Plan”).

The restricted stock units granted generally vest equally over periods ranging from one to five years .

1 unchanged sentence

Compensation expense related to the restricted stock units is recognized using a straight-line attribution method over the vesting period.

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Form 10-K | 92

A summary of restricted stock unit activity was as follows:

1 unchanged sentence

Outstanding and unvested as of December 28, 2022

395,853 $ 76.82

Granted 326,692 58.26

2 unchanged sentences

Outstanding and unvested as of December 27, 2023

The weighted average grant-date fair value of restricted stock units granted during fiscal 2023 and fiscal 2022 were $ 58.26 and $ 71.25 , respectively.

The total fair value of shares vested during fiscal 2023 and fiscal 2022 was $ 10,382 and $ 5,936 , respectively.

511,544 67.82

Granted 199,345 102.77

Vested ( 185,649 ) 70.31

Forfeited ( 82,436 ) 73.41

Outstanding and unvested as of December 25, 2024 442,804 81.47

Granted 201,723 109.32

Vested ( 162,408 ) 81.80

Forfeited ( 86,337 ) 86.81

Outstanding and unvested as of December 31, 2025 395,782 $ 94.37

The total fair value of shares vested during fiscal 2025, fiscal 2024 and fiscal 2023 was $ 13,285 , $ 13,021 and $ 10,382 , respectively.

As of December 31, 2025, total unrecognized compensation expense related to unvested restricted stock units was $ 25,071 , which is expected to be recognized over a weighted average period of 2.0 years.

Shake Shack Inc.

Form 10-K | 101

Performance Stock Units

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The actual number of equity awards earned is based on the level of performance achieved over a predetermined performance period, relative to established financial goals.

Performance stock units granted during fiscal 2025 are subject to a requisite service period and the awards cliff vest over three years .

The amount of awards that can be earned ranges from 0 % to 200 % of the number of performance stock units granted, based on the achievement of approved financial goals over a three-year performance period.

Performance stock units granted during fiscal 2024 are subject to a requisite service period and the awards vest ratably over four years or cliff vest over three years .

The amount of awards that can be earned ranges from 0 % to 200 % of the number of performance stock units granted, based on the achievement of approved financial goals over a one -year or three -year performance period.

No performance stock units were granted during fiscal 2023.

Performance stock units containing market conditions are based on a Monte Carlo simulation, and related compensation expense is recognized using a graded attribution method over the vesting period and does not change regardless of the amount of shares received by the recipient based on achievement of the awards.

1 unchanged sentence

Compensation expense related to the performance stock units not containing a market condition is recognized using either a graded-vesting attribution method or straight-line over the vesting period based on the most probable outcome of the performance conditions.

No performance stock units were granted during fiscal 2023 and fiscal 2022.

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Form 10-K | 93

A summary of performance stock unit activity was as follows:

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Outstanding and unvested as of December 28, 2022

159,822 $ 92.22

Vested ( 25,494 ) 91.36

Forfeited ( 12,903 ) 88.70

Outstanding and unvested as of December 27, 2023

121,425 92.77

Granted 95,624 103.98

2 unchanged sentences

Outstanding and unvested as of December 25, 2024 172,446 96.82

The weighted average grant date fair value of performance stock units granted during fiscal 2023 and fiscal 2022 was nil , and nil , respectively.

The total fair value of awards that vested during fiscal 2023 and fiscal 2022 was $ 1,441 and $ 1,869 , respectively.

As of December 25, 2024, total unrecognized compensation expense related to unvested performance stock units was $ 6,645 , which is expected to be recognized over a weighted average period of 2.5 years.

Stock Options

Under the 2025 Plan, the Company may grant stock options to team members, directors and officers.

The stock options granted generally vest equally over periods ranging from one to five years .

The Company does not use cash to settle any of the equity-based awards, and issues new shares of Class A common stock upon the exercise of stock options.

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Form 10-K | 102

A summary of stock option activity was as follows:

Aggregate Intrinsic Value Weighted Average Remaining Contractual Life (Years)

Outstanding as of December 27, 2023 100,625 $ 21.71

Exercised ( 77,369 ) 21.00

Granted 73,057 106.87

Performance achievement (1)

Vested ( 85,408 ) 89.85

Forfeited ( 9,225 ) 107.84

Outstanding as of December 25, 2024 12,112 $ 24.66 $ 1,300 0.5

Options vested and exercisable as of December 25, 2024 12,112 $ 24.66 $ 1,300 0.5

As of December 25, 2024, total unrecognized compensation expense related to unvested stock options was nil .

Cash received from stock options exercised was $ 1,627 and the cash tax benefit realized for the tax deductions from these option exercises was $ 137 for fiscal 2024.

No options were granted during fiscal 2024, fiscal 2023 and fiscal 2022.

The total intrinsic value of stock options exercised during fiscal 2024, fiscal 2023 and fiscal 2022 was $ 7,212 , $ 1,426 and $ 631 , respectively.

No stock options vested during fiscal 2024, fiscal 2023 and fiscal 2022.

The following table summarizes information about stock options outstanding and exercisable as December 25, 2024:

Options Outstanding and Exercisable

Number Outstanding at December 25, 2024 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price

Exercise Price

$ 21.00 9,001 0.1 $ 21.00

$ 34.62 2,003 1.4 $ 34.62

$ 36.41 1,108 1.9 $ 36.41

Outstanding and unvested as of December 31, 2025 153,963 $ 105.00

(1) Represents the incremental awards earned and/or awards forfeited based on the achievement of performance conditions.

The total fair value of awards that vested during fiscal 2025, fiscal 2024 and fiscal 2023 was $ 9,136 , $ 1,104 and $ 1,441 , respectively.

The weighted average grant date fair value of performance stock units granted during fiscal 2023 was nil .

As of December 31, 2025, total unrecognized compensation expense related to unvested performance stock units was $ 8,471 , which is expected to be recognized over a weighted average period of 2.0 years.

Shake Shack is the sole managing member of SSE Holdings, which is classified as a partnership for U.S federal and most applicable state and local income tax purposes.

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Income Tax Expense

The components of Income (loss) before income taxes were as follows:

The components of Income before income taxes were as follows:

2025 2024 2023

1 unchanged sentence

Foreign 54,140 32,491 30,407

Income (loss) before income taxes $ 14,244 $ 16,980 $ ( 24,285 )

Income before income taxes $ 72,609 $ 14,244 $ 16,980

Shake Shack Inc.

11 unchanged sentences

Income tax expense (benefit) $ 22,903 $ 3,424 $ ( 4,010 )

Reconciliations of Income tax expense (benefit) computed at the U.S.

A reconciliation of Income tax expense (benefit) computed at the U.S.

federal statutory income tax rate to the recognized Income tax expense (benefit) and the U.S.

statutory income tax rate to our effective tax rates were as follows:

statutory income tax rate to our effective tax rate after the adoption of ASU 2023-09 was as follows:

Expected U.S.

federal income taxes at statutory rate $ 15,248 21.0 %

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

Foreign Tax Effects:

Foreign withholding taxes 3,052 4.2 %

Federal employer tip credit

( 2,613 ) ( 3.6 ) %

Other credits

( 1,490 ) ( 2.1 ) %

Non-taxable or non-deductible items:

Non-deductible compensation

Equity-based compensation

( 1,461 ) ( 2.0 ) %

Changes in unrecognized tax benefits

Other ( 330 ) ( 0.4 ) %

Income tax expense (benefit)

$ 22,903 31.5 %

(1) For fiscal 2025, the states and local jurisdictions that contribute to the majority (greater than 50%) of the tax effect in this category include New York State and City.

Shake Shack Inc.

Form 10-K | 95

Reconciliations of Income tax expense (benefit) computed at the U.S.

federal statutory income tax rate to the recognized Income tax expense (benefit) and the U.S.

statutory income tax rate to our effective tax rates before the adoption of ASU 2023-09 were as follows:

Expected U.S.

15 unchanged sentences

Shake Shack's effective income tax rates for fiscal 2025, fiscal 2024 and fiscal 2023 were 31.5 %, 24.0 % and ( 23.6 )%, respectively.

The increase in the effective income tax rate from fiscal 2023 to fiscal 2024 was primarily driven by the release of a valuation allowance and a higher remeasurement of deferred tax assets in fiscal 2023.

The increase in the effective income tax rate from fiscal 2024 to fiscal 2025 was primarily driven by foreign tax credits that are not expected to be realized and the remeasurement of deferred tax assets following the filing of the Company’s 2024 tax returns.

The following table sets forth the total income taxes paid, net of refunds after the adoption of ASU 2023-09:

state and local:

state and local

Total foreign

Before to the adoption of ASU 2023-09, income taxes paid, net of refunds for fiscal 2024 and fiscal 2023 were $ 6,531 and $ 4,056 , respectively.

Shake Shack Inc.

24 unchanged sentences

As of December 31, 2025, the Company's federal and state net operating loss carryforwards for income tax purposes were $ 606,837 and $ 370,203 , respectively.

Of the federal net operating loss carryforward, $ 563,915 can be carried forward indefinitely, while the remaining $ 51,867 will begin to expire in 2035.

Similarly, of the state net operating loss carryforward, $ 106,682 can be carried forward indefinitely, while the remaining $ 227,677 will begin to expire in 2025.

As of December 25, 2024, the Company had federal tax credit carryforwards, including a capital loss carryforward of $ 33,749 , which will begin to expire in 2025 and gross state tax credit carryforwards of $ 273 , also expiring in 2025.

Of the federal net operating loss carryforwards, $ 554,970 can be carried forward indefinitely, while the remaining $ 51,867 will begin to expire in 2035.

Similarly, of the state net operating loss carryforwards, $ 48,536 can be carried forward indefinitely, while the remaining $ 321,667 will begin to expire in 2026.

As of December 31, 2025, the Company had federal tax credit carryforwards, including a capital loss carryforward of $ 33,871 , which will begin to expire in 2026 and gross state tax credit carryforwards of $ 1,175 , which will begin to expire in 2030.

As described in Note 12, Non-controlling Interests, the Company acquired a total of 186,213 LLC Interests during fiscal 2025 through LLC Interest redemptions and stock-based compensation plan activity.

4 unchanged sentences

Accordingly, the Company maintained a valuation allowance of $ 980 .

The net change in valuation allowance for fiscal 2024 was a decrease of $ 97 .

Refer to Schedule II, Valuation and Qualifying Accounts for additional information.

The net change in valuation allowance for fiscal 2025 was an increase of $ 720 .

New Tax Legislation

On July 4, 2025, bill H.R.

1, commonly referred to as the "One Big Beautiful Bill Act" or "OBBBA," was signed into law, with certain provisions effective in 2025 and others in 2026.

The Act provides for changes to U.S.

federal tax law, including the

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Form 10-K | 97

expensing of U.S.

research expenditures and certain eligible capital expenditures, among other provisions.

We have recognized the effects of the OBBBA provisions in our financial results to the extent they are applicable to the 2025 tax year.

Uncertain Tax Positions

1 unchanged sentence

In 2025, no new uncertain tax positions were identified.

A reconciliation of the beginning to the ending accounts of gross unrecognized tax benefits for fiscal 2024, 2023, and 2022 is as follows:

Reconciliations of the beginning to the ending accounts of gross unrecognized tax benefits for fiscal 2025, fiscal 2024, and fiscal 2023 were as follows:

2025 2024 2023

4 unchanged sentences

$ 147 $ 147 $ 147

The Company files income tax returns in the United States federal and state and local jurisdictions.

The Company is currently open to examination by tax authorities for state and local jurisdictions for tax years beginning 2018.

The Company files U.S.

federal, state and local, and foreign tax returns.

Generally, the Company's state and local income tax returns from 2018 to 2024 remain open to examination.

The Company’s foreign income tax returns generally remain open to examination for the 2019 through 2024 tax years.

Statutes of limitation in the United States and various state and foreign jurisdictions are generally three to six years from the date of filing but may be extended in certain circumstances, including when tax attributes such as net operating losses and tax credit carryforwards are involved.

Tax authorities may also review returns for years otherwise closed by statute to adjust related tax attributes arising in prior years.

Tax Receivable Agreement

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This estimate was based on our conclusion that it was probable that such TRA Payments would be made, considering our projections of future taxable income.

No payments were made to the members of SSE Holdings pursuant to the Tax Receivable Agreement in fiscal 2024 and fiscal 2023.

During fiscal 2025 payments of $ 37 , inclusive of interest, were made to the members of SSE Holdings pursuant to the Tax Receivable Agreement.

No payments were made to the members of SSE Holdings pursuant to the Tax Receivable Agreement in fiscal 2024.

As of December 31, 2025, the total amount of TRA Payments due under the Tax Receivable Agreement was $ 246,835 , of which $ 2,372 amount was included in Other current liabilities on the Consolidated Balance Sheets.

EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share of Class A common stock is computed by dividing Net income (loss) attributable to Shake Shack Inc.

by the weighted average number of shares of Class A common stock outstanding during the period.

Diluted earnings (loss) per share of Class A common stock is computed by dividing Net income (loss) attributable to Shake Shack Inc.

by the weighted average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities.

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Form 10-K | 98

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings (loss) per share of Class A common stock (in thousands, except per share amounts):

EARNINGS PER SHARE

Basic earnings per share of Class A common stock is computed by dividing Net income attributable to Shake Shack Inc.

by the weighted average number of shares of Class A common stock outstanding during the period.

Diluted earnings per share of Class A common stock is computed by dividing Net income attributable to Shake Shack Inc.

by the weighted average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities.

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock (in thousands, except per share amounts):

2025 2024 2023

Net income (loss) attributable to Shake Shack Inc.—basic $ 10,207 $ 20,264 $ ( 21,229 )

Net income attributable to Shake Shack Inc.—basic $ 45,725 $ 10,207 $ 20,264

Reallocation of net income attributable to non-controlling interests from the assumed conversion of Class B shares — 613 726

Net income (loss) attributable to Shake Shack Inc.—diluted $ 10,820 $ 20,990 $ ( 21,229 )

Net income attributable to Shake Shack Inc.—diluted $ 45,725 $ 10,820 $ 20,990

Weighted average shares of Class A common stock outstanding—basic 40,212 39,830 39,419

6 unchanged sentences

Weighted average shares of Class A common stock outstanding—diluted 41,847 44,203 43,899

Earnings (loss) per share of Class A common stock—basic $ 0.26 $ 0.51 $ ( 0.54 )

Earnings (loss) per share of Class A common stock—diluted $ 0.24 $ 0.48 $ ( 0.54 )

The effect of potential share settlement of the Convertible Notes outstanding for the period is included as potentially dilutive shares of Class A common stock under application of the if-converted method in the computation of diluted earnings (loss) per share, except when the effect would be anti-dilutive.

Earnings per share of Class A common stock—basic $ 1.14 $ 0.26 $ 0.51

Earnings per share of Class A common stock—diluted $ 1.09 $ 0.24 $ 0.48

The effect of potential share settlement of the Convertible Notes outstanding for the period is included as potentially dilutive shares of Class A common stock under application of the if-converted method in the computation of diluted earnings per share, except when the effect would be anti-dilutive.

Refer to Note 8, Debt, for additional information.

Shares of Class B common stock do not share in the earnings or losses of Shake Shack and are therefore not participating securities.

As such, separate presentation of basic and diluted earnings (loss) per share of Class B common stock under the two-class method has not been presented.

However, shares of Class B common stock outstanding for the period are considered potentially dilutive shares of Class A common stock under application of the if-converted method and are included in the computation of diluted earnings (loss) per share, except when the effect would be anti-dilutive.

The following table presents potentially dilutive securities excluded from the computations of diluted earnings (loss) per share of Class A common stock:

As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented.

However, shares of Class B common stock outstanding for the period are considered potentially dilutive shares of Class A common stock under application of the if-converted method and are included in the computation of diluted earnings per share, except when the effect would be anti-dilutive.

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Form 10-K | 99

The following table presents potentially dilutive securities excluded from the computations of diluted earnings per share of Class A common stock:

2025 2024 2023

Stock options — — 134,031 (2)

Performance stock units 120,706 (1) 50,556 (1) 99,718 (1)

Restricted stock units — — 395,853 (2)

Shares of Class B common stock 2,434,789 (2) — —

Convertible notes — — 1,466,975 (2)

(1) Number of securities outstanding at the end of the period that were excluded from the computation of diluted earnings (loss) per share of Class A common stock because the performance conditions associated with these awards were not met assuming the end of the reporting period was the end of the performance period.

(2) Number of securities outstanding at the end of the period that were excluded from the computation of diluted earnings (loss) per share of Class A common stock because the effect would have been anti-dilutive.

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Form 10-K | 107

(1) Number of securities outstanding at the end of the period that were excluded from the computation of diluted earnings per share of Class A common stock because the performance conditions associated with these awards were not met assuming the end of the reporting period was the end of the performance period.

(2) Number of securities outstanding at the end of the period that were excluded from the computation of diluted earnings per share of Class A common stock because the effect would have been anti-dilutive.

SUPPLEMENTAL CASH FLOW INFORMATION

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Lease Commitments

The Company is obligated under various operating leases for Shacks and the home office space, expiring in various years through 2045.

The Company is obligated under various operating leases for Shacks and Shack Support Centers, expiring in various years through 2045.

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, common area maintenance costs and other occupancy costs.

1 unchanged sentence

Certain leases require the Company to obtain letters of credit.

As of December 25, 2024, the Company held three letters of credit, one for $ 402 , which expires in August 2025 and renews automatically for one-year periods through January 2034, one for $ 163 , which expires in December 2024 and renews automatically for one-year periods through December 2029, and one for $ 130 , which expires in February 2026.

As of December 31, 2025, the Company held three letters of credit totaling $ 695 .

Purchase Commitments

2 unchanged sentences

The Company also enters into long-term, exclusive contracts with certain vendors to supply food, beverages and paper goods, obligating the Company to purchase specified quantities.

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Form 10-K | 100

Legal Contingencies

3 unchanged sentences

The Company is a party to the Tax Receivable Agreement under which it is contractually committed to pay certain of the members of SSE Holdings 85 % of the amount of any tax benefits that are actually realized, or in some cases are deemed to realize, as a result of certain transactions.

The Company is not obligated to make any payments under the Tax Receivable

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Agreement until the tax benefits associated with the transactions that gave rise to the payments are realized.

The Company is not obligated to make any payments under the Tax Receivable Agreement until the tax benefits associated with the transactions that gave rise to the payments are realized.

Refer to Note 14, Income Taxes, for additional information relating to the Tax Receivable Agreement.

RELATED PARTY TRANSACTIONS

Union Square Hospitality Group

The Chairman of the Board of Directors serves as the Executive Chairman of Union Square Hospitality Group, LLC.

As a result, Union Square Hospitality Group, LLC and its subsidiary, set forth below, are considered related parties.

Hudson Yards Sports and Entertainment

In fiscal 2011, Shake Shack entered into a Master License Agreement (as amended, "MLA") with Hudson Yards Sports and Entertainment LLC ("HYSE") to operate Shake Shack branded limited menu concession stands in sports and entertainment venues within the United States.

In February 2019, the agreement was assigned to Hudson Yards Catering ("HYC"), the parent of HYSE.

The agreement expires in January 2027 and includes five consecutive five-year renewal options at HYC's option.

As consideration for these rights, HYC pays the Company a license fee based on a percentage of net food sales, as defined in the MLA.

HYC also pays a percentage of profits on sales of branded beverages, as defined in the MLA.

Classification 2024 2023 2022

Amounts received from HYC Licensing revenue $ 926 $ 988 $ 802

Classification December 25

2024 December 27

Amounts due from HYC Accounts receivable, net $ 73 $ 57

Madison Square Park Conservancy

The Chairman of the Board of Directors serves as a director of the Madison Square Park Conservancy ("MSP Conservancy"), with which Shake Shack has a license agreement and pays license fees to operate the Madison Square Park Shack.

No payments were due to MSP Conservancy as of December 25, 2024 and December 27, 2023.

No amounts were due to MSP Conservancy as of December 31, 2025 and December 25, 2024.

Classification 2025 2024 2023

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Form 10-K | 101

The Chairman of the Board of Directors serves as a director of Olo, Inc., a platform the Company uses in connection with its mobile ordering application.

The Chairman of the Board of Directors served as a director of Olo, Inc., a platform the Company uses in connection with its mobile ordering application through September 2025.

Classification 2025 2024 2023

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Accrued expenses

The Company's former Chief Executive Officer is a member of the board of directors of Block, Inc.

(formerly known as "Square, Inc.").

The Company currently uses certain point-of-sale applications, payment processing services, hardware and other enterprise platform services in connection with its kiosk technology, sales for certain off-site events and the processing of a limited amount of sales at certain locations.

Classification 2024 2023 2022

Amounts paid to Block, Inc.

Other operating expenses $ 12,119 $ 8,688 $ 4,337

Classification December 25

2024 December 27

Amounts due to Block, Inc.

Accounts payable

Accrued expenses $ — $ 59

Tax Receivable Agreement

1 unchanged sentence

Refer to Note 14, Income Taxes, for additional information.

No payments were made to the members of SSE Holdings pursuant to the Tax Receivable Agreement during fiscal 2024, fiscal 2023 and fiscal 2022.

Classification 2025 2024 2023

Amounts paid under the Tax Receivable Agreement

Other current liabilities

Classification December 31

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Amounts paid to non-controlling interest holders Non-controlling interests $ 1,842 $ 482 $ 162

Shake Shack Inc.

Form 10-K | 110

SEGMENT REPORTING

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The CODM uses net income to allocate resources (including labor, technology, and capital resources) for the single segment to make decisions regarding annual budget, new Shack openings, entering new geographic markets, landlord and vendor negotiations, marketing decisions, pursuing new business ventures, and driving the Company's mission.

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Form 10-K | 102

2025 2024 2023

25 unchanged sentences

(2) Other operating expenses consist of delivery commissions, Shack-level marketing expenses, repairs and maintenance, utilities, and other operating expenses incidental to operating our Company-operated Shacks, such as non-perishable supplies, credit card fees, and property insurance.

(3) Other income, net includes net unrealized and realized gains and losses from marketable securities, dividend and interest income, and adjustments to liabilities under the Tax Receivable Agreement.

Interest income was $ 640 , $ 2,390 and nil , respectively for the fifty-two weeks ended December 25, 2024, December 27, 2023 and December 28, 2022.

Shake Shack Inc.

Form 10-K | 111

(3) Other (income) loss, net primarily includes interest and dividend income, adjustments to liabilities under the Tax Receivable Agreement, and net unrealized and realized gains and losses from marketable securities.

Interest income was $ 165 , $ 761 and $ 2,443 , respectively in fiscal 2025, 2024 and 2023.

GEOGRAPHIC INFORMATION

Revenue by geographic area was as follows:

Revenues by geographic area were as follows:

2025 2024 2023

14 unchanged sentences

Cash $ 8,553 $ 9,271

Accounts receivable 3,728 —

Prepaid expenses 954 1,405

34 unchanged sentences

SHAKE SHACK INC.

CONDENSED STATEMENTS OF INCOME (LOSS)

CONDENSED STATEMENTS OF INCOME

(PARENT COMPANY ONLY)

9 unchanged sentences

INCOME (LOSS) FROM OPERATIONS ( 2,350 ) 784 1,254

Equity in net income (loss) from SSE Holdings 8,558 10,091 ( 25,335 )

Equity in net income from SSE Holdings 65,672 8,558 10,091

Other income (expense), net ( 18,557 ) 28,533 14,533

Interest expense ( 1,048 ) ( 1,047 ) ( 1,047 )

INCOME (LOSS) BEFORE INCOME TAXES 36,828 24,831 ( 29,055 )

INCOME BEFORE INCOME TAXES 43,717 36,828 24,831

Income tax expense (benefit) 12,315 6,603 ( 5,203 )

NET INCOME (LOSS) $ 30,225 $ 30,034 $ ( 23,272 )

NET INCOME $ 31,402 $ 30,225 $ 30,034

See accompanying Notes to Condensed Financial Statements.

3 unchanged sentences

SHAKE SHACK INC.

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(PARENT COMPANY ONLY)

3 unchanged sentences

2024 December 27

Net income (loss) $ 30,225 $ 30,034 $ ( 23,272 )

Net income $ 31,402 $ 30,225 $ 30,034

Other comprehensive income (loss), net of tax (1) :

1 unchanged sentence

OTHER COMPREHENSIVE INCOME (LOSS) — 2 ( 3 )

COMPREHENSIVE INCOME (LOSS) $ 30,227 $ 30,031 $ ( 23,273 )

COMPREHENSIVE INCOME $ 31,402 $ 30,227 $ 30,031

(1) Net of tax benefit of $ 0 for fiscal years ended December 31, 2025, December 25, 2024 and December 27, 2023.

11 unchanged sentences

OPERATING ACTIVITIES

Net income (loss) $ 30,225 $ 30,034 $ ( 23,272 )

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

Equity in net (income) loss from SSE Holdings ( 8,558 ) ( 10,091 ) 25,335

Net income $ 31,402 $ 30,225 $ 30,034

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

Equity in net income from SSE Holdings ( 65,672 ) ( 8,558 ) ( 10,091 )

Amortization of debt issuance costs 1,048 1,047 1,047

15 unchanged sentences

Proceeds from stock option exercises 189 1,620 744

Payments under tax receivable agreement ( 37 ) — —

NET CASH PROVIDED BY FINANCING ACTIVITIES 28,192 29,238 12,475

Effect of exchange rate changes on cash and cash equivalents

2 ( 3 ) ( 1 )

INCREASE (DECREASE) IN CASH ( 718 ) 2,599 ( 480 )

32 unchanged sentences

Form 10-K | 108

The following table presents amounts in the Parent Company's Condensed Statements of Income (Loss) that were eliminated in consolidation:

The following table presents amounts in the Parent Company's Condensed Statements of Income that were eliminated in consolidation:

2025 2024 2023

Intercompany revenue $ 3,674 $ 6,476 $ 7,971

Equity in net income (loss) from SSE Holdings 8,558 10,091 ( 25,335 )

Intercompany expenses

Equity in net income from SSE Holdings

65,672 8,558 10,091

Other income (expense), net 18,566 28,533 14,533

8 unchanged sentences

As of December 31, 2025 and December 25, 2024, the fair value of the Conversion Option was $ 7,000 and $ 33,500 , respectively.

The following table presents amounts in the Parent Company's Condensed Statements of Income (Loss) related to the change in value and accretion on the Conversion Option:

The following table presents amounts in the Parent Company's Condensed Statements of Income related to the change in value and accretion on the Conversion Option:

Classification 2025 2024 2023

26 unchanged sentences

Establishment of liabilities under tax receivable agreement 861 12,121 720

The following table sets forth the total income taxes paid, net of refunds received after the adoption of ASU 2023-09:

state and local:

state and local

Shake Shack Inc.

2 unchanged sentences

Balance at beginning of period Additions Balance at end of period

(in thousands) Charged to costs and expenses Charged to other accounts

(in thousands) Charged to costs and expenses (1)

Charged to other accounts

Deferred tax asset valuation allowance:

7 unchanged sentences

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data