0001789940-25-000086
SEC filingFirst Watch reports cash $20.7M, debt $264.1M, no buybacks or dividends; single segment. Capex $120.1M.
As of September 28, 2025, First Watch held $20.7M in cash and equivalents, down from $33.3M at year-end 2024. Total debt net of unamortized costs stood at $264.1M, composed of $214.4M Term Facilities, $35.0M revolver, $12.9M finance leases, and $3.1M financing obligation. The net increase of $65.8M from $198.3M at year-end was primarily driven by borrowings to fund business acquisitions. Shareholders' equity improved to $607.3M from $595.4M, reflecting net income and stock-based compensation partially offset by other comprehensive losses. Inventory remained stable at $6.5M, and deferred revenue (gift cards and franchise fees) totaled $3.9M.
The notes disclose no material purchase commitments beyond ordinary course lease obligations. Legal contingencies are immaterial.
First Watch did not repurchase any shares or pay dividends during the period. The company allocated $120.1M to capital expenditures in the 39-week period, primarily for new restaurant openings and unit upgrades. Debt activity included drawing $27.5M on the delayed draw facility and $32.5M on the revolver to fund acquisitions, partially offset by repayments.
The company operates as a single reporting segment: First Watch Restaurants. All revenue is generated in the United States. The chief operating decision maker evaluates performance using consolidated net income. For the 13 weeks ended September 28, 2025, total revenues were $316.0M and net income was $3.0M.
Net income of $4.3 million was significantly lower than operating cash flow of $107.5 million, primarily due to large non-cash charges: depreciation and amortization ($54.4M), stock-based compensation ($7.9M), and non-cash operating lease costs ($24.2M). Working capital changes provided a net inflow of $14.1 million, driven by increases in accrued liabilities ($11.5M) and accrued compensation ($9.3M), partially offset by a decrease in deferred revenues ($3.6M) and operating lease liabilities ($2.8M).
Capital expenditures of $120.1 million exceeded operating cash flow, resulting in negative free cash flow. The company also spent $54.8 million on acquisitions. Financing activities provided $55.7 million, primarily from net borrowings on the revolving credit facility ($35.0M) and issuance of long-term debt ($27.5M) offset by repayments.
Overall, cash flow from operations remains healthy but is heavily reliant on non-cash adjustments and working capital benefits. The elevated capex and acquisition spending suggest growth investments, but free cash flow is negative, which may necessitate continued reliance on debt financing.