Wendy's Co 10-Q

Item 1. Financial Statements. THE WENDY’S COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands Except Par Value) June 29, 2025 December 29, 2024 ASSETS (Unaudited) Current assets: Cash and cash equivalents $ 281,226 $ 450,512 Restricted cash 33,995 34,481 Accounts and notes receivable, net 115,084 99,926 Inventories 6,314 6,529 Prepaid expenses and other current assets 52,693 45,563 Advertising funds restricted assets 111,134 99,129 Total current assets 600,446 736,140 Properties 915,662 907,787 Finance lease assets 257,085 244,954 Operating lease assets 667,970 679,777 Goodwill 772,827 771,468 Other intangible assets 1,176,105 1,192,264 Investments 27,092 29,006 Net investment in sales-type and direct financing leases 286,678 288,048 Other assets 190,283 185,399 Total assets $ 4,894,148 $ 5,034,843 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ 78,505 $ 78,163 Current portion of finance lease liabilities 24,234 22,509 Current portion of operating lease liabilities 51,293 50,068 Accounts payable 26,645 28,455 Accrued expenses and other current liabilities 123,785 118,224 Advertising funds restricted liabilities 110,758 100,212 Total current liabilities 415,220 397,631 Long-term debt 2,650,907 2,662,130 Long-term finance lease liabilities 593,553 575,363 Long-term operating lease liabilities 689,724 704,333 Deferred income taxes 265,430 263,420 Deferred franchise fees 88,396 88,387 Other liabilities 78,030 84,227 Total liabilities 4,781,260 4,775,491 Commitments and contingencies Stockholders’ equity: Common stock, $ 0.10 par value; 1,500,000 shares authorized; 470,424 shares issued; 191,345 and 203,834 shares outstanding, respectively 47,042 47,042 Additional paid-in capital 2,988,265 2,982,102 Retained earnings 417,765 399,700 Common stock held in treasury, at cost; 279,079 and 266,590 shares, respectively ( 3,277,648 ) ( 3,094,739 ) Accumulated other comprehensive loss ( 62,536 ) ( 74,753 ) Total stockholders’ equity 112,888 259,352 Total liabilities and stockholders’ equity $ 4,894,148 $ 5,034,843 See accompanying notes to condensed consolidated financial statements. 4 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands Except Per Share Amounts) Three Months Ended Six Months Ended June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024 (Unaudited) Revenues: Sales $ 232,853 $ 237,355 $ 452,363 $ 462,678 Franchise royalty revenue and fees 156,300 157,670 301,448 304,170 Franchise rental income 60,411 60,638 118,865 118,624 Advertising funds revenue 111,365 115,064 211,725 220,008 560,929 570,727 1,084,401 1,105,480 Costs and expenses: Cost of sales 196,521 199,886 384,690 391,999 Franchise support and other costs 17,069 16,222 33,665 30,964 Franchise rental expense 32,630 32,390 63,331 64,168 Advertising funds expense 111,374 120,817 212,902 228,191 General and administrative 59,485 61,496 127,689 125,253 Depreciation and amortization (exclusive of amortization of cloud computing arrangements shown separately below) 36,990 37,492 73,539 73,010 Amortization of cloud computing arrangements 4,056 3,519 8,223 7,061 System optimization gains, net ( 387 ) ( 280 ) ( 297 ) ( 153 ) Reorganization and realignment costs 174 2,452 ( 518 ) 8,125 Impairment of long-lived assets 1,686 689 3,107 2,695 Other operating income, net ( 2,929 ) ( 3,463 ) ( 9,316 ) ( 6,496 ) 456,669 471,220 897,015 924,817 Operating profit 104,260 99,507 187,386 180,663 Interest expense, net ( 30,945 ) ( 30,995 ) ( 62,422 ) ( 61,530 ) Investment income (loss), net — 11 ( 1,718 ) 11 Other income, net 2,585 6,300 7,571 13,136 Income before income taxes 75,900 74,823 130,817 132,280 Provision for income taxes ( 20,790 ) ( 20,180 ) ( 36,475 ) ( 35,644 ) Net income $ 55,110 $ 54,643 $ 94,342 $ 96,636 Basic and diluted net income per share $ .29 $ .27 $ .48 $ .47 See accompanying notes to condensed consolidated financial statements. 5 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands) Three Months Ended Six Months Ended June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024 (Unaudited) Net income $ 55,110 $ 54,643 $ 94,342 $ 96,636 Other comprehensive income (loss): Foreign currency translation adjustment 10,305 ( 2,011 ) 12,217 ( 6,597 ) Other comprehensive income (loss) 10,305 ( 2,011 ) 12,217 ( 6,597 ) Comprehensive income $ 65,415 $ 52,632 $ 106,559 $ 90,039 See accompanying notes to condensed consolidated financial statements. 6 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In Thousands) Common Stock Additional Paid-In Capital Retained Earnings Common Stock Held in Treasury Accumulated Other Comprehensive Loss Total (Unaudited) Balance at December 29, 2024 $ 47,042 $ 2,982,102 $ 399,700 $ ( 3,094,739 ) $ ( 74,753 ) $ 259,352 Net income — — 39,232 — — 39,232 Other comprehensive income — — — — 1,912 1,912 Cash dividends — — ( 49,432 ) — — ( 49,432 ) Repurchases of common stock — — — ( 125,399 ) — ( 125,399 ) Share-based compensation — 5,572 — — — 5,572 Common stock issued upon exercises of stock options — ( 130 ) — 326 — 196 Common stock issued upon vesting of restricted shares — ( 2,702 ) — 1,453 — ( 1,249 ) Other — 23 ( 19 ) 51 — 55 Balance at March 30, 2025 $ 47,042 $ 2,984,865 $ 389,481 $ ( 3,218,308 ) $ ( 72,841 ) $ 130,239 Net income — — 55,110 — — 55,110 Other comprehensive income — — — — 10,305 10,305 Cash dividends — — ( 26,811 ) — — ( 26,811 ) Repurchases of common stock — — — ( 62,558 ) — ( 62,558 ) Share-based compensation — 5,132 — — — 5,132 Common stock issued upon exercises of stock options — ( 245 ) — 1,689 — 1,444 Common stock issued upon vesting of restricted shares — ( 1,504 ) — 1,476 — ( 28 ) Other — 17 ( 15 ) 53 — 55 Balance at June 29, 2025 $ 47,042 $ 2,988,265 $ 417,765 $ ( 3,277,648 ) $ ( 62,536 ) $ 112,888 See accompanying notes to condensed consolidated financial statements. 7 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY—CONTINUED (In Thousands) Common Stock Additional Paid-In Capital Retained Earnings Common Stock Held in Treasury Accumulated Other Comprehensive Loss Total (Unaudited) Balance at December 31, 2023 $ 47,042 $ 2,960,035 $ 409,863 $ ( 3,048,786 ) $ ( 58,375 ) $ 309,779 Net income — — 41,993 — — 41,993 Other comprehensive loss — — — — ( 4,586 ) ( 4,586 ) Cash dividends — — ( 51,374 ) — — ( 51,374 ) Repurchases of common stock — — — ( 7,216 ) — ( 7,216 ) Share-based compensation — 5,853 — — — 5,853 Common stock issued upon exercises of stock options — 179 — 1,036 — 1,215 Common stock issued upon vesting of restricted shares — ( 3,855 ) — 1,778 — ( 2,077 ) Other — 29 ( 17 ) 55 — 67 Balance at March 31, 2024 $ 47,042 $ 2,962,241 $ 400,465 $ ( 3,053,133 ) $ ( 62,961 ) $ 293,654 Net income — — 54,643 — — 54,643 Other comprehensive loss — — — — ( 2,011 ) ( 2,011 ) Cash dividends — — ( 51,252 ) — — ( 51,252 ) Repurchases of common stock — — — ( 27,493 ) — ( 27,493 ) Share-based compensation — 5,824 — — — 5,824 Common stock issued upon exercises of stock options — ( 134 ) — 874 — 740 Common stock issued upon vesting of restricted shares — ( 3,484 ) — 3,058 — ( 426 ) Other — 32 ( 20 ) 62 — 74 Balance at June 30, 2024 $ 47,042 $ 2,964,479 $ 403,836 $ ( 3,076,632 ) $ ( 64,972 ) $ 273,753 See accompanying notes to condensed consolidated financial statements. 8 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands) Six Months Ended June 29, 2025 June 30, 2024 (Unaudited) Cash flows from operating activities: Net income $ 94,342 $ 96,636 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization (exclusive of amortization of cloud computing arrangements shown separately below) 73,539 73,010 Amortization of cloud computing arrangements 8,223 7,061 Share-based compensation 10,704 11,677 Impairment of long-lived assets 3,107 2,695 Deferred income tax 822 ( 104 ) Non-cash rental expense, net 21,406 21,120 Change in operating lease liabilities ( 24,482 ) ( 24,273 ) Net receipt of deferred vendor incentives 8,421 5,533 System optimization gains, net ( 297 ) ( 153 ) Distributions received from joint ventures, net of equity in earnings 1,679 1,146 Long-term debt-related activities, net 3,744 3,738 Cloud computing arrangements expenditures ( 9,335 ) ( 6,878 ) Changes in operating assets and liabilities and other, net ( 45,865 ) ( 45,745 ) Net cash provided by operating activities 146,008 145,463 Cash flows from investing activities: Capital expenditures ( 39,050 ) ( 34,465 ) Franchise development fund ( 16,518 ) ( 11,477 ) Dispositions 1,355 601 Notes receivable, net 1,949 1,383 Net cash used in investing activities ( 52,264 ) ( 43,958 ) Cash flows from financing activities: Proceeds from long-term debt 23,500 — Repayments of long-term debt ( 23,125 ) ( 14,625 ) Repayments of finance lease liabilities ( 10,666 ) ( 10,336 ) Repurchases of common stock ( 186,516 ) ( 34,248 ) Dividends ( 76,243 ) ( 102,626 ) Proceeds from stock option exercises 1,717 2,098 Payments related to tax withholding for share-based compensation ( 1,354 ) ( 2,645 ) Net cash used in financing activities ( 272,687 ) ( 162,382 ) Net cash used in operations before effect of exchange rate changes on cash ( 178,943 ) ( 60,877 ) Effect of exchange rate changes on cash 5,437 ( 3,298 ) Net decrease in cash, cash equivalents and restricted cash ( 173,506 ) ( 64,175 ) Cash, cash equivalents and restricted cash at beginning of period 503,608 588,816 Cash, cash equivalents and restricted cash at end of period $ 330,102 $ 524,641 See accompanying notes to condensed consolidated financial statements. 9 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) (1) Basis of Presentation The accompanying unaudited condensed consolidated financial statements (the “Financial Statements”) of The Wendy’s Company (“The Wendy’s Company” and, together with its subsidiaries, the “Company,” “we,” “us” or “our”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and, therefore, do not include all information and footnotes required by GAAP for complete financial statements. In our opinion, the Financial Statements contain all adjustments of a normal recurring nature necessary to present fairly our financial position as of June 29, 2025, the results of our operations for the three and six months ended June 29, 2025 and June 30, 2024 and cash flows for the six months ended June 29, 2025 and June 30, 2024. The results of operations for the six months ended June 29, 2025 are not necessarily indicative of the results to be expected for the full 2025 fiscal year. The Financial Statements should be read in conjunction with the audited consolidated financial statements for The Wendy’s Company and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024 (the “Form 10-K”). The principal 100% owned subsidiary of the Company is Wendy’s International, LLC and its subsidiaries (“Wendy’s”). The Company manages and internally reports its business in the following segments: (1) Wendy’s U.S., (2) Wendy’s International and (3) Global Real Estate & Development. See Note 17 for further information. We report on a fiscal year consisting of 52 or 53 weeks ending on the Sunday closest to or on December 31. All three- and six-month periods presented herein contain 13 weeks and 26 weeks, respectively. All references to years, quarters and months relate to fiscal periods rather than calendar periods. Our significant interim accounting policies include the recognition of advertising funds expense in proportion to advertising funds revenue. (2) Revenue Disaggregation of Revenue The following tables disaggregate revenue by segment and source: Wendy’s U.S. Wendy’s International Global Real Estate & Development Total Three Months Ended June 29, 2025 Sales at Company-operated restaurants $ 225,973 $ 6,880 $ — $ 232,853 Franchise royalty revenue 112,842 19,391 — 132,233 Franchise fees 20,972 2,569 526 24,067 Franchise rental income — — 60,411 60,411 Advertising funds revenue 101,355 10,010 — 111,365 Total revenues $ 461,142 $ 38,850 $ 60,937 $ 560,929 Three Months Ended June 30, 2024 Sales at Company-operated restaurants $ 231,151 $ 6,204 $ — $ 237,355 Franchise royalty revenue 117,997 18,321 — 136,318 Franchise fees 17,826 2,389 1,137 21,352 Franchise rental income — — 60,638 60,638 Advertising funds revenue 105,617 9,447 — 115,064 Total revenues $ 472,591 $ 36,361 $ 61,775 $ 570,727 10 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) Wendy’s U.S. Wendy’s International Global Real Estate & Development Total Six Months Ended June 29, 2025 Sales at Company-operated restaurants $ 438,717 $ 13,646 $ — $ 452,363 Franchise royalty revenue 217,248 36,660 — 253,908 Franchise fees 41,676 4,655 1,209 47,540 Franchise rental income — — 118,865 118,865 Advertising funds revenue 193,115 18,610 — 211,725 Total revenues $ 890,756 $ 73,571 $ 120,074 $ 1,084,401 Six Months Ended June 30, 2024 Sales at Company-operated restaurants $ 450,619 $ 12,059 $ — $ 462,678 Franchise royalty revenue 226,850 35,148 — 261,998 Franchise fees 35,652 4,278 2,242 42,172 Franchise rental income — — 118,624 118,624 Advertising funds revenue 202,317 17,691 — 220,008 Total revenues $ 915,438 $ 69,176 $ 120,866 $ 1,105,480 Contract Balances The following table provides information about receivables and contract liabilities (deferred franchise fees) from contracts with customers: June 29, 2025 (a) December 29, 2024 (a) Receivables, which are included in “Accounts and notes receivable, net” (b) $ 63,781 $ 55,601 Receivables, which are included in “Advertising funds restricted assets” 71,839 73,223 Deferred franchise fees (c) 99,397 99,411 _______________ (a) Excludes funds collected from the sale of gift cards, which are primarily reimbursed to franchisees upon redemption at franchised restaurants and do not ultimately result in the recognition of revenue in the Company’s condensed consolidated statements of operations. (b) Includes receivables related to “Sales” and “Franchise royalty revenue and fees.” (c) Deferred franchise fees are included in “Accrued expenses and other current liabilities” and “Deferred franchise fees” and totaled $ 11,001 and $ 88,396 , respectively, as of June 29, 2025, and $ 11,024 and $ 88,387 , respectively, as of December 29, 2024. Significant changes in deferred franchise fees are as follows: Six Months Ended June 29, 2025 June 30, 2024 Deferred franchise fees at beginning of period $ 99,411 $ 100,805 Revenue recognized during the period ( 4,438 ) ( 6,051 ) New deferrals due to cash received and other 4,424 5,254 Deferred franchise fees at end of period $ 99,397 $ 100,008 11 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) Anticipated Future Recognition of Deferred Franchise Fees The following table reflects the estimated franchise fees to be recognized in the future related to performance obligations that are unsatisfied at the end of the period: Estimate for fiscal year: 2025 (a) $ 7,588 2026 6,795 2027 6,657 2028 6,525 2029 6,424 Thereafter 65,408 $ 99,397 _______________ (a) Represents franchise fees expected to be recognized for the remainder of 2025, which includes development-related franchise fees expected to be recognized over a duration of one year or less. (3) Leases Nature of Leases The Company operates restaurants that are located on sites owned by us and sites leased by us from third parties. In addition, the Company owns sites and leases sites from third parties, which it leases and/or subleases to franchisees. The Company also leases restaurant, office and transportation equipment. As of June 29, 2025, the nature of restaurants operated by the Company and its franchisees was as follows: June 29, 2025 Company-operated restaurants: Owned land and building 155 Owned building and held long-term land leases 138 Leased land and building 107 Total Company-operated restaurants 400 Franchisee-operated restaurants: Company-owned properties leased to franchisees 489 Company-leased properties subleased to franchisees 1,156 Other franchisee-operated restaurants 5,289 Total franchisee-operated restaurants 6,934 Total Company-operated and franchisee-operated restaurants 7,334 12 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) Company as Lessee The components of lease cost are as follows: Three Months Ended Six Months Ended June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024 Finance lease cost: Amortization of finance lease assets $ 4,885 $ 4,372 $ 10,030 $ 8,669 Interest on finance lease liabilities 10,865 10,699 21,742 21,357 15,750 15,071 31,772 30,026 Operating lease cost 21,322 21,524 41,839 43,225 Variable lease cost (a) 17,269 17,365 33,482 33,853 Short-term lease cost 1,304 1,226 2,570 2,620 Total operating lease cost (b) 39,895 40,115 77,891 79,698 Total lease cost $ 55,645 $ 55,186 $ 109,663 $ 109,724 _______________ (a) Includes expenses for executory costs of $ 10,578 and $ 10,033 for the three months ended June 29, 2025 and June 30, 2024, respectively, and $ 20,972 and $ 20,254 for the six months ended June 29, 2025 and June 30, 2024, respectively, for which the Company is reimbursed by sublessees. (b) Includes $ 32,569 and $ 32,355 for the three months ended June 29, 2025 and June 30, 2024, respectively, and $ 63,221 and $ 64,073 for the six months ended June 29, 2025 and June 30, 2024, respectively, recorded to “Franchise rental expense” for leased properties that are subsequently leased to franchisees. Also includes $ 6,946 and $ 7,402 for the three months ended June 29, 2025 and June 30, 2024, respectively, and $ 13,887 and $ 14,790 for the six months ended June 29, 2025 and June 30, 2024, respectively, recorded to “Cost of sales” for leases for Company-operated restaurants. Company as Lessor The components of lease income are as follows: Three Months Ended Six Months Ended June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024 Sales-type and direct-financing leases: Selling profit $ 34 $ 88 $ 23 $ 72 Interest income (a) 6,943 7,178 13,858 14,897 Operating lease income 42,467 42,950 84,888 84,447 Variable lease income 17,944 17,688 33,977 34,177 Franchise rental income (b) $ 60,411 $ 60,638 $ 118,865 $ 118,624 _______________ (a) Included in “Interest expense, net.” (b) Includes sublease income of $ 44,667 and $ 45,049 recognized during the three months ended June 29, 2025 and June 30, 2024, respectively, and $ 87,451 and $ 87,832 for the six months ended June 29, 2025 and June 30, 2024, respectively. Sublease income includes lessees’ variable payments to the Company for executory costs of $ 10,512 and $ 10,155 for the three months ended June 29, 2025 and June 30, 2024, respectively, and $ 20,709 and $ 20,244 for the six months ended June 29, 2025 and June 30, 2024, respectively. 13 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) (4) Investments The following is a summary of the carrying value of our investments: June 29, 2025 December 29, 2024 Equity method investment $ 27,092 $ 27,288 Other investments in equity securities — 1,718 $ 27,092 $ 29,006 Equity Method Investment Wendy’s has a 50 % share in a partnership in a Canadian restaurant real estate joint venture (“TimWen”) with a subsidiary of Restaurant Brands International Inc., a quick-service restaurant company that owns the Tim Hortons ® brand (Tim Hortons is a registered trademark of Tim Hortons USA Inc.). The Company has significant influence over this investee. Such investment is accounted for using the equity method, under which our results of operations include our share of the income of the investee in “Other operating income, net.” Presented below is activity related to our investment in TimWen included in our condensed consolidated financial statements: Six Months Ended June 29, 2025 June 30, 2024 Balance at beginning of period $ 27,288 $ 32,727 Equity in earnings for the period 6,514 6,797 Amortization of purchase price adjustments (a) ( 1,202 ) ( 1,248 ) 5,312 5,549 Distributions received ( 6,991 ) ( 6,695 ) Foreign currency translation adjustment included in “Other comprehensive income (loss)” 1,483 ( 1,118 ) Balance at end of period $ 27,092 $ 30,463 _______________ (a) Purchase price adjustments that impacted the carrying value of the Company’s investment in TimWen are being amortized over the average original aggregate life of 21 years. Other Investments in Equity Securities During the six months ended June 29, 2025, the Company recorded an impairment charge of $ 1,718 for the difference between the estimated fair value and the carrying value of an investment in equity securities. As a result, the carrying value of the investment was zero as of June 29, 2025. 14 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) (5) Long-Term Debt Long-term debt consisted of the following: June 29, 2025 December 29, 2024 Class A-2 Notes: 4.236 % Series 2022-1 Class A-2-I Notes, anticipated repayment date 2029 $ 97,000 $ 97,500 4.535 % Series 2022-1 Class A-2-II Notes, anticipated repayment date 2032 384,134 386,134 2.370 % Series 2021-1 Class A-2-I Notes, anticipated repayment date 2029 416,519 418,769 2.775 % Series 2021-1 Class A-2-II Notes, anticipated repayment date 2031 623,780 627,030 3.783 % Series 2019-1 Class A-2-I Notes, anticipated repayment date 2026 351,673 353,673 4.080 % Series 2019-1 Class A-2-II Notes, anticipated repayment date 2029 396,373 398,623 3.884 % Series 2018-1 Class A-2-II Notes, anticipated repayment date 2028 433,974 436,349 7 % debentures, due in December 2025 49,255 48,913 Unamortized debt issuance costs ( 23,296 ) ( 26,698 ) 2,729,412 2,740,293 Less amounts payable within one year ( 78,505 ) ( 78,163 ) Total long-term debt $ 2,650,907 $ 2,662,130 Other Long-Term Debt Wendy’s U.S. advertising fund has a revolving line of credit of $ 15,000 , which was established to support the Company’s advertising fund operations and bears interest at the Secured Overnight Financing Rate (“SOFR”) plus 2.25 %. Borrowings under the line of credit are guaranteed by Wendy’s. During the three months ended March 30, 2025, the Company borrowed and repaid $ 15,000 and $ 8,500 , respectively, under the revolving line of credit. During the three months ended June 29, 2025, the Company borrowed an additional $ 8,500 under the revolving line of credit. As a result, as of June 29, 2025, the Company had outstanding borrowings of $ 15,000 under the revolving line of credit, which is included in “Advertising funds restricted liabilities.” (6) Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Valuation techniques under the accounting guidance related to fair value measurements are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. These inputs are classified into the following hierarchy: • Level 1 Inputs - Quoted prices for identical assets or liabilities in active markets. • Level 2 Inputs - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level 3 Inputs - Pricing inputs are unobservable for the assets or liabilities and include situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value require significant management judgment or estimation. 15 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) Financial Instruments The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments: June 29, 2025 December 29, 2024 Carrying Amount Fair Value Carrying Amount Fair Value Fair Value Measurements Financial assets Cash equivalents $ 129,295 $ 129,295 $ 319,212 $ 319,212 Level 1 Other investments in equity securities (a) — — 1,718 1,718 Level 2 Financial liabilities Series 2022-1 Class A-2-I Notes (b) 97,000 94,772 97,500 93,744 Level 2 Series 2022-1 Class A-2-II Notes (b) 384,134 364,731 386,134 371,855 Level 2 Series 2021-1 Class A-2-I Notes (b) 416,519 380,594 418,769 376,256 Level 2 Series 2021-1 Class A-2-II Notes (b) 623,780 541,491 627,030 551,981 Level 2 Series 2019-1 Class A-2-I Notes (b) 351,673 346,866 353,673 345,093 Level 2 Series 2019-1 Class A-2-II Notes (b) 396,373 378,615 398,623 387,039 Level 2 Series 2018-1 Class A-2-II Notes (b) 433,974 420,890 436,349 418,027 Level 2 U.S. advertising fund revolving line of credit 15,000 15,000 — — Level 2 7 % debentures, due in 2025 (b) 49,255 49,792 48,913 50,034 Level 2 _______________ (a) The fair value of our other investments in equity securities is based on our review of information provided by the investment manager, which is based on observable price changes in orderly transactions for a similar investment of the same issuer. (b) The fair values were based on quoted market prices in markets that are not considered active markets. The carrying amounts of cash, accounts payable and accrued expenses approximate fair value due to the short-term nature of those items. The carrying amounts of accounts and notes receivable, net (both current and non-current) approximate fair value due to the effect of the related allowance for doubtful accounts. Our cash equivalents are the only financial assets measured and recorded at fair value on a recurring basis. 16 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) Non-Recurring Fair Value Measurements Assets and liabilities remeasured to fair value on a non-recurring basis resulted in impairment that we have recorded to “Impairment of long-lived assets” in our condensed consolidated statements of operations. Total impairment losses may reflect the impact of remeasuring long-lived assets held and used (including land, buildings, leasehold improvements, favorable lease assets and right-of-use assets) to fair value as a result of (1) the deterioration in operating performance of certain Company-operated restaurants and (2) the Company’s decision to lease and/or sublease the land and/or buildings to franchisees in connection with the sale or anticipated sale of restaurants, including any subsequent lease modifications. The fair values of long-lived assets held and used presented in the tables below represent the remaining carrying value and were estimated based on either discounted cash flows of future anticipated lease and sublease income or discounted cash flows of future anticipated Company-operated restaurant performance. Total impairment losses may also include the impact of remeasuring long-lived assets held for sale. The fair values of long-lived assets held for sale presented in the tables below represent the remaining carrying value and were estimated based on current market values. See Note 12 for further information on impairment of our long-lived assets. Fair Value Measurements June 29, 2025 Level 1 Level 2 Level 3 Held and used $ 755 $ — $ — $ 755 Held for sale 1,433 — — 1,433 Total $ 2,188 $ — $ — $ 2,188 Fair Value Measurements December 29, 2024 Level 1 Level 2 Level 3 Held and used $ 2,391 $ — $ — $ 2,391 Held for sale 1,558 — — 1,558 Total $ 3,949 $ — $ — $ 3,949 (7) Income Taxes The Company’s effective tax rate for the three months ended June 29, 2025 and June 30, 2024 was 27.4 % and 27.0 %, respectively. The Company’s effective tax rate varied from the U.S. federal statutory rate of 21 % for the three months ended June 29, 2025 primarily due to state income taxes and the tax effects of our foreign operations and share-based compensation. The Company’s effective tax rate for the six months ended June 29, 2025 and June 30, 2024 was 27.9 % and 26.9 %, respectively. The Company’s effective tax rate varied from the U.S. federal statutory rate of 21 % for the six months ended June 29, 2025 primarily due to state income taxes and the tax effects of our foreign operations. Subsequent to the end of the second quarter of 2025, on July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted. Key provisions include the permanent extension of several business tax incentives originally established under the 2017 Tax Cuts and Jobs Act, as well as changes to provisions related to bonus depreciation, and research and development. The Company is currently evaluating the impact of the OBBBA on our condensed consolidated financial statements. 17 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) (8) Net Income Per Share The calculation of basic and diluted net income per share was as follows: Three Months Ended Six Months Ended June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024 Net income $ 55,110 $ 54,643 $ 94,342 $ 96,636 Common stock: Weighted average basic shares outstanding 191,949 204,919 196,296 205,145 Dilutive effect of stock options and restricted shares 765 1,266 870 1,433 Weighted average diluted shares outstanding 192,714 206,185 197,166 206,578 Basic and diluted net income per share $ .29 $ .27 $ .48 $ .47 Basic net income per share for the three and six months ended June 29, 2025 and June 30, 2024 was computed by dividing net income amounts by the weighted average number of shares of common stock outstanding. Diluted net income per share was computed by dividing net income by the weighted average number of basic shares outstanding plus the potential common share effect of dilutive stock options and restricted shares. We excluded potential common shares of 7,990 and 8,139 for the three and six months ended June 29, 2025, respectively, and 7,606 and 7,197 for the three and six months ended June 30, 2024, respectively, from our diluted net income per share calculation as they would have had anti-dilutive effects. (9) Stockholders’ Equity Dividends During the first and second quarter of 2025, the Company paid dividends per share of $ .25 and $ .14 , respectively. During each of the first and second quarters of 2024, the Company paid dividends per share of $ .25 . Repurchases of Common Stock In January 2023, our Board of Directors authorized a repurchase program for up to $ 500,000 of our common stock through February 28, 2027, when and if market conditions warrant and to the extent legally permissible (the “January 2023 Authorization”). During the six months ended June 29, 2025, the Company repurchased 12,957 shares under the January 2023 Authorization with an aggregate purchase price of $ 185,962 , of which $ 193 was accrued as of June 29, 2025, and excluding excise tax of $ 1,813 and commissions of $ 182 . During the six months ended June 29, 2025, the Company paid $ 565 in excise tax on shares repurchased during 2024. As of June 29, 2025, the Company had $ 49,038 of availability remaining under the January 2023 Authorization. Subsequent to June 29, 2025 through August 1, 2025, the Company repurchased 834 shares under the January 2023 Authorization with an aggregate purchase price of $ 8,825 , excluding applicable excise tax and commissions. During the six months ended June 30, 2024, the Company repurchased 1,955 shares under the January 2023 Authorization with an aggregate purchase price of $ 34,448 , of which $ 801 was accrued as of June 30, 2024, and excluding excise tax of $ 233 and commissions of $ 28 . 18 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) Accumulated Other Comprehensive Loss The following table provides a rollforward of accumulated other comprehensive loss, which is entirely comprised of foreign currency translation: Six Months Ended June 29, 2025 June 30, 2024 Balance at beginning of period $ ( 74,753 ) $ ( 58,375 ) Foreign currency translation 12,217 ( 6,597 ) Balance at end of period $ ( 62,536 ) $ ( 64,972 ) (10) System Optimization Gains, Net The Company’s system optimization initiative included a shift from Company-operated restaurants to franchised restaurants over time, through acquisitions and dispositions, as well as facilitating franchisee-to-franchisee restaurant transfers (“Franchise Flips”). As of June 29, 2025, Company-operated restaurant ownership was approximately 5 % of the total system. While the Company has no plans to move its ownership away from approximately 5 % of the total system, the Company expects to continue to optimize the Wendy’s system through Franchise Flips, as well as evaluating strategic acquisitions of franchised restaurants and strategic dispositions of Company-operated restaurants to existing and new franchisees, to further strengthen the franchisee base and drive new restaurant development. During the six months ended June 29, 2025 and June 30, 2024, the Company facilitated one and 14 Franchise Flips, respectively. Additionally, during the six months ended June 29, 2025, the Company completed the sale of two Company-operated restaurants to franchisees. No Company-operated restaurants were sold to franchisees during the six months ended June 30, 2024. Gains and losses recognized on dispositions are recorded to “System optimization gains, net” in our condensed consolidated statements of operations. Costs related to acquisitions and dispositions under our system optimization initiative are recorded to “Reorganization and realignment costs.” All other costs incurred related to facilitating Franchise Flips are recorded to “Franchise support and other costs.” The following is a summary of the disposition activity recorded as a result of our system optimization initiative: Three Months Ended Six Months Ended June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024 Number of restaurants sold to franchisees — — 2 — Proceeds from sales of restaurants $ — $ — $ 55 $ — Net assets sold (a) — — ( 169 ) — Other — — ( 25 ) — Loss on sales of restaurants, net — — ( 139 ) — Post-closing adjustments on sales of restaurants (b) ( 10 ) 254 ( 10 ) 254 (Loss) gain on sales of restaurants, net ( 10 ) 254 ( 149 ) 254 Gain (loss) on sales of other assets, net (c) 397 26 446 ( 101 ) System optimization gains, net $ 387 $ 280 $ 297 $ 153 _______________ (a) Net assets sold consisted primarily of equipment. (b) The three and six months ended June 30, 2024 represent the recognition of deferred gains as a result of the resolution of certain contingencies related to the extension of lease terms for restaurants previously sold to franchisees. 19 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) (c) During the three and six months ended June 29, 2025, the Company received net cash proceeds of $ 1,300 , primarily from the sale of surplus and other properties. During the three and six months ended June 30, 2024, the Company received net cash proceeds of $ 575 and $ 601 , respectively, primarily from the sale of surplus and other properties. Assets Held for Sale As of June 29, 2025 and December 29, 2024, the Company had assets held for sale of $ 5,144 and $ 2,833 , respectively, primarily consisting of surplus properties. Assets held for sale are included in “Prepaid expenses and other current assets.” (11) Reorganization and Realignment Costs The following is a summary of the initiatives included in “Reorganization and realignment costs:” Three Months Ended Six Months Ended June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024 Organizational Redesign Plan $ 106 $ 2,409 $ ( 844 ) $ 8,031 Other reorganization and realignment plans 68 43 326 94 Reorganization and realignment costs $ 174 $ 2,452 $ ( 518 ) $ 8,125 Organizational Redesign In February 2023, the Board of Directors approved a plan to redesign the Company’s organizational structure to better support the execution of the Company’s long-term growth strategy by maximizing organizational efficiency and streamlining decision making (the “Organizational Redesign Plan”). Additionally, in January 2024, the Board of Directors announced the appointment of a new President and Chief Executive Officer and the departure of the Company’s previous President and Chief Executive Officer. The Company expects to incur total costs of approximately $ 17,000 related to the Organizational Redesign Plan, including costs related to the 2024 succession of the President and Chief Executive Officer role. During the six months ended June 29, 2025, the Company recognized costs totaling $( 844 ), which primarily included a reversal of a severance accrual. During the six months ended June 30, 2024, the Company recognized costs totaling $ 8,031 , which primarily included severance and related employee costs. The Company expects to incur additional costs aggregating approximately $ 400 , comprised primarily of share-based compensation. The Company expects costs related to the Organizational Redesign Plan to continue into 2026. The following is a summary of the costs recorded as a result of the Organizational Redesign Plan: Three Months Ended Six Months Ended Total Incurred Since Inception June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024 Severance and related employee costs (a) $ ( 6 ) $ 1,948 $ ( 1,094 ) $ 7,310 $ 12,402 Recruitment and relocation costs — — 13 82 736 Third-party and other costs — 14 — 64 1,116 ( 6 ) 1,962 ( 1,081 ) 7,456 14,254 Share-based compensation (b) 112 447 237 575 2,333 Total organizational redesign $ 106 $ 2,409 $ ( 844 ) $ 8,031 $ 16,587 _______________ (a) The six months ended June 29, 2025 includes a reversal of an accrual as a result of a change in estimate. (b) Total incurred since inception primarily represents the accelerated recognition of share-based compensation resulting from the termination of employees under the Organizational Redesign Plan. 20 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) As of June 29, 2025, the accruals for the Organizational Redesign Plan are included in “Accrued expenses and other current liabilities.” The tables below present a rollforward of our accruals for the Organizational Redesign Plan. Balance December 29, 2024 Charges Payments Balance June 29, 2025 Severance and related employee costs $ 4,257 $ ( 1,094 ) $ ( 1,897 ) $ 1,266 Recruitment and relocation costs — 13 ( 13 ) — Third-party and other costs — — — — $ 4,257 $ ( 1,081 ) $ ( 1,910 ) $ 1,266 Balance December 31, 2023 Charges Payments Balance June 30, 2024 Severance and related employee costs $ 1,692 $ 7,310 $ ( 2,233 ) $ 6,769 Recruitment and relocation costs — 82 ( 82 ) — Third-party and other costs — 64 ( 64 ) — $ 1,692 $ 7,456 $ ( 2,379 ) $ 6,769 Other Reorganization and Realignment Plans Costs incurred under the Company’s other reorganization and realignment plans were not material during the six months ended June 29, 2025 and June 30, 2024. The Company does not expect to incur any material additional costs under these plans. (12) Impairment of Long-Lived Assets The Company records impairment charges as a result of (1) the deterioration in operating performance of certain Company-operated restaurants, (2) the Company’s decision to lease and/or sublease properties to franchisees in connection with the sale or anticipated sale of Company-operated restaurants, including any subsequent lease modifications and (3) classifying surplus properties as held for sale. The following is a summary of impairment losses recorded, which represent the excess of the carrying amount over the fair value of the affected assets and are included in “Impairment of long-lived assets:” Three Months Ended Six Months Ended June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024 Company-operated restaurants $ 1,686 $ 644 $ 2,873 $ 2,418 Surplus properties — 45 234 277 $ 1,686 $ 689 $ 3,107 $ 2,695 (13) Supplemental Cash Flow Information The following table includes supplemental non-cash investing and financing activities: Six Months Ended June 29, 2025 June 30, 2024 Supplemental non-cash investing and financing activities: Capital expenditures included in accounts payable $ 7,166 $ 9,968 Finance leases 29,347 13,085 21 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) The following table includes a reconciliation of cash, cash equivalents and restricted cash: June 29, 2025 December 29, 2024 Reconciliation of cash, cash equivalents and restricted cash at end of period: Cash and cash equivalents $ 281,226 $ 450,512 Restricted cash 33,995 34,481 Restricted cash, included in Advertising funds restricted assets 14,881 18,615 Total cash, cash equivalents and restricted cash $ 330,102 $ 503,608 (14) Guarantees and Other Commitments and Contingencies Except as described below, the Company did not have any significant changes in guarantees and other commitments and contingencies during the current fiscal period since those reported in the Form 10-K. Refer to the Form 10-K for further information regarding the Company’s additional commitments and obligations. Lease Guarantees Wendy’s has guaranteed the performance of certain leases and other obligations, primarily from former Company-operated restaurant locations now operated by franchisees, amounting to $ 96,817 as of June 29, 2025. These leases extend through 2045. We have had no judgments against us as guarantor of these leases as of June 29, 2025. In the event of default by a franchise owner where Wendy’s is called upon to perform under its guarantee, Wendy’s has the ability to pursue repayment from the franchise owner. The liability recorded for our probable exposure associated with these lease guarantees was not material as of June 29, 2025. Letters of Credit As of June 29, 2025, the Company had outstanding letters of credit with various parties totaling $ 28,995 . Substantially all of the outstanding letters of credit include amounts outstanding against the 2021-1 Variable Funding Senior Secured Notes, Class A-1. We do not expect any material loss to result from these letters of credit. (15) Transactions with Related Parties Except as described below, the Company did not have any significant changes in or transactions with its related parties during the current fiscal period since those reported in the Form 10-K. TimWen Lease and Management Fee Payments A wholly-owned subsidiary of Wendy’s leases restaurant facilities from TimWen, which are then subleased to franchisees for the operation of Wendy’s/Tim Hortons combo units in Canada. Wendy’s paid TimWen $ 10,344 and $ 10,522 under these lease agreements during the six months ended June 29, 2025 and June 30, 2024, respectively, which has been recorded to “Franchise rental expense.” In addition, TimWen paid Wendy’s a management fee under the TimWen joint venture agreement of $ 115 and $ 120 during the six months ended June 29, 2025 and June 30, 2024, respectively, which is included as a reduction to “General and administrative.” Transactions with QSCC Wendy’s has a purchasing co-op relationship structure with its franchisees that establishes Quality Supply Chain Co-op, Inc. (“QSCC”). QSCC manages, for the Wendy’s system in the U.S. and Canada, contracts for the purchase and distribution of food, proprietary paper, operating supplies and equipment under national agreements with pricing based upon total system volume. QSCC’s supply chain management facilitates continuity of supply and provides consolidated purchasing efficiencies while monitoring and seeking to minimize possible obsolete inventory throughout the Wendy’s supply chain in the U.S. and Canada. 22 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) Wendy’s and its franchisees pay sourcing fees to third-party vendors on certain products sourced by QSCC. Such sourcing fees are remitted by these vendors to QSCC and are the primary means of funding QSCC’s operations. In addition, QSCC collects certain rebates, price variance and other recoveries, technology fees, convention fees and other funding from third-party vendors as part of the administration and management of the Wendy’s supply chain in the U.S. and Canada. Should QSCC’s sourcing fees exceed its expected needs, QSCC’s board of directors may return some or all of the excess to its members in the form of a patronage dividend. Wendy’s recorded its share of patronage dividends of $ 3,379 during the six months ended June 30, 2024, of which $ 2,909 is included in “Other operating income, net” and $ 470 is included as a reduction of “Cost of sales.” There were no patronage dividends recorded during the six months ended June 29, 2025. Transactions with Yellow Cab Certain family members and/or affiliates of Mr. Nelson Peltz, our former Chairman and Chairman Emeritus, Mr. Peter May, our Senior Vice Chairman, and Mr. Matthew Peltz, our former Vice Chairman, hold minority ownership interests in Yellow Cab Holdings, LLC (“Yellow Cab”), a Wendy’s franchisee that, as of June 29, 2025 owned and operated 89 Wendy’s restaurants, and/or certain of the operating companies managed by Yellow Cab. In addition, Mr. Bradley Peltz, a director of the Company, is a Managing Director of, and holds a minority ownership interest in, Yellow Cab. During the six months ended June 29, 2025 and June 30, 2024, the Company recognized $ 7,588 and $ 7,543 , respectively, in royalty, advertising fund, lease and other income from Yellow Cab and related entities. In all transactions involving Yellow Cab, the Company’s standard franchisee recruiting and approval processes were followed, no modifications were made to the Company’s standard franchise agreements or related documents, and all deal terms and transaction documents were negotiated and executed on an arm’s-length basis, consistent with the Company’s comparable franchise transactions and relationships. As of June 29, 2025 and December 29, 2024, $ 1,153 and $ 1,132 , respectively, was due from Yellow Cab for such income, which is included in “Accounts and notes receivable, net” and “Advertising funds restricted assets.” Transactions with AMC Ms. Kristin Dolan, a director of the Company, serves as the Chief Executive Officer of AMC Networks Inc. (“AMC”). During the six months ended June 29, 2025 and June 30, 2024, the Company purchased approximately $ 600 and $ 1,100 , respectively, of advertising time from a subsidiary of AMC. The Company’s advertising spend with AMC was made in the ordinary course of business and approved on an arm’s-length basis, consistent with the Company’s comparable advertising decisions. As of June 29, 2025 and December 29, 2024, approximately $ 27 and $ 17 , respectively, was due to AMC for such advertising time, which is included in “Advertising funds restricted liabilities.” (16) Legal and Environmental Matters The Company is involved in litigation and claims incidental to our business. We provide accruals for such litigation and claims when we determine it is probable that a liability has been incurred and the loss is reasonably estimable. The Company believes it has adequate accruals for all of its legal and environmental matters. We cannot estimate the aggregate possible range of loss for our existing litigation and claims due to various reasons, including, but not limited to, many proceedings being in preliminary stages, with various motions either yet to be submitted or pending, discovery yet to occur and significant factual matters unresolved. In addition, most cases seek an indeterminate amount of damages and many involve multiple parties. Predicting the outcomes of settlement discussions or judicial or arbitral decisions is thus inherently difficult and future developments could cause these actions or claims, individually or in aggregate, to have a material adverse effect on the Company’s financial condition, results of operations, or cash flows of a particular reporting period. 23 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) (17) Segment Information Wendy’s U.S. revenue, significant segment expenses and segment adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) are as follows: Three Months Ended Six Months Ended June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024 Wendy’s U.S. revenue $ 461,142 $ 472,591 $ 890,756 $ 915,438 Wendy’s U.S. expense Cost of sales 189,258 193,046 370,495 378,979 Franchise support and other costs 13,677 13,391 26,855 26,085 Advertising fund expense (a) 101,355 110,701 193,115 209,726 General and administrative 19,619 18,666 42,043 37,992 Other segment items (b) 74 78 112 123 Wendy’s U.S. adjusted EBITDA $ 137,159 $ 136,709 $ 258,136 $ 262,533 _______________ (a) Includes advertising fund expense of $ 5,084 and $ 7,409 for the three and six months ended June 30, 2024, respectively, related to the Company’s funding of incremental advertising. There was no funding of incremental advertising during the three and six months ended June 29, 2025. (b) Other segment items for the three and six months ended June 29, 2025 and June 30, 2024 primarily include professional fees. Wendy’s International revenue, significant segment expenses and segment adjusted EBITDA are as follows: Three Months Ended Six Months Ended June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024 Wendy’s International revenue $ 38,850 $ 36,361 $ 73,571 $ 69,176 Wendy’s International expense Cost of sales 7,263 6,840 14,195 13,020 Advertising fund expense (a) 10,159 10,370 20,071 18,926 General and administrative 6,700 6,606 13,137 12,547 Other segment items (b) 1,502 1,870 3,498 3,318 Wendy’s International adjusted EBITDA $ 13,226 $ 10,675 $ 22,670 $ 21,365 _______________ (a) Includes advertising fund expense of $ 183 and $ 342 for the three and six months ended June 29, 2025, respectively, and $ 603 and $ 765 for the three and six months ended June 30, 2024, respectively, related to the Company’s funding of incremental advertising. In addition, includes other international-related advertising surplus (deficit) of $ 34 and $( 1,119 ) for the three and six months ended June 29, 2025, respectively, and $( 320 ) and $( 470 ) for the three and six months ended June 30, 2024, respectively. (b) Other segment items for the three and six months ended June 29, 2025 and June 30, 2024 primarily include franchise support and other costs. 24 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) Global Real Estate & Development revenue, significant segment expenses and segment adjusted EBITDA are as follows: Three Months Ended Six Months Ended June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024 Global Real Estate & Development revenue $ 60,937 $ 61,775 $ 120,074 $ 120,866 Global Real Estate & Development expense Franchise rental expense 32,630 32,390 63,331 64,168 General and administrative 2,650 3,768 7,870 8,868 Other segment items (a) ( 1,627 ) ( 2,565 ) ( 3,087 ) ( 4,413 ) Global Real Estate & Development adjusted EBITDA $ 27,284 $ 28,182 $ 51,960 $ 52,243 _______________ (a) Other segment items primarily include equity in earnings from our TimWen joint venture and franchise support and other costs. Equity in earnings from our TimWen joint venture was $ 3,060 and $ 5,312 for the three and six months ended June 29, 2025, respectively, and $ 3,027 and $ 5,549 for the three and six months ended June 30, 2024, respectively. The following table reconciles profit by segment to the Company’s consolidated income before income taxes: Three Months Ended Six Months Ended June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024 Wendy’s U.S. $ 137,159 $ 136,709 $ 258,136 $ 262,533 Wendy’s International 13,226 10,675 22,670 21,365 Global Real Estate & Development 27,284 28,182 51,960 52,243 Total segment adjusted EBITDA 177,669 175,566 $ 332,766 $ 336,141 Unallocated franchise support and other costs ( 658 ) ( 191 ) ( 1,245 ) ( 217 ) Advertising funds surplus 140 254 284 461 Unallocated general and administrative (a) ( 30,516 ) ( 32,456 ) ( 64,639 ) ( 65,846 ) Depreciation and amortization (exclusive of amortization of cloud computing arrangements shown separately below) ( 36,990 ) ( 37,492 ) ( 73,539 ) ( 73,010 ) Amortization of cloud computing arrangements ( 4,056 ) ( 3,519 ) ( 8,223 ) ( 7,061 ) System optimization gains, net 387 280 297 153 Reorganization and realignment costs ( 174 ) ( 2,452 ) 518 ( 8,125 ) Impairment of long-lived assets ( 1,686 ) ( 689 ) ( 3,107 ) ( 2,695 ) Unallocated other operating income, net 144 206 4,274 862 Interest expense, net ( 30,945 ) ( 30,995 ) ( 62,422 ) ( 61,530 ) Investment income (loss), net — 11 ( 1,718 ) 11 Other income, net 2,585 6,300 7,571 13,136 Income before income taxes $ 75,900 $ 74,823 $ 130,817 $ 132,280 _______________ (a) Includes corporate overhead costs, such as employee compensation and related benefits. 25 Table of Contents THE WENDY’S COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands Except Per Share Amounts) (18) New Accounting Standards Disaggregation of Income Statement Expenses In November 2024, the Financial Accounting Standards Board (“FASB”) issued an amendment to expand disclosure requirements related to certain income statement expenses. The amendment requires disaggregation of certain expense captions into specified categories in disclosures within the notes to the financial statements. We are currently evaluating the impact of the adoption of this guidance on our condensed consolidated financial statements. In January 2025, the FASB issued an update that clarified that the amendment is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. Measurement of Credit Losses for Accounts Receivable and Contract Assets In July 2025, the FASB issued an amendment to provide a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets for revenue arising from contracts with customers. The amendment is effective commencing with our 2026 fiscal year. We are currently evaluating the impact of the adoption of this guidance on our condensed consolidated financial statements. 26