Revenue grew 10.7 percent year over year to $349.9 million in 2026Q3, but operating margin of 3.2 percent and net margin of 1.4 percent indicate that top-line expansion has not yet produced consistent operating leverage.
First Watch Restaurant Group, Inc. (FWRG) annual income statement — 8-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 |
|---|
| Sales/Revenue | 1.35B | 1.22B | 1.02B | 891.55M | 730.16M | 601.19M | 342.39M | 436.37M | 349.77M |
| Revenue Growth % | 15.6% | 20.34% | 13.95% | 22.1% | 21.45% | 75.59% | -21.54% | 24.76% | - |
| Cost of Goods Sold | 905.07M | 1.06B | 223.1M | 701.43M | 590.63M | 476.96M | 312.51M | 348.96M | 278.4M |
| COGS % of Revenue | - | 86.96% | 21.96% | 78.68% | 80.89% | 79.34% | 91.27% | 79.97% | 79.6% |
| Gross Profit | 446.77M | 159.44M | 792.81M | 190.12M | 139.53M | 124.23M | 29.88M | 87.41M | 71.36M |
| Gross Margin % | 33.05% | 13.04% | 78.04% | 21.32% | 19.11% | 20.66% | 8.73% | 20.03% | 20.4% |
| Gross Profit Growth % | - | -79.89% | 317.01% | 36.25% | 12.32% | 315.75% | -65.81% | 22.49% | - |
| Operating Expenses | 389.74M | 125.67M | 753.91M | 148.85M | 122.62M | 101.99M | 77.1M | 124.97M | 68.13M |
| OpEx % of Revenue | - | 10.28% | 74.21% | 16.7% | 16.79% | 16.96% | 22.52% | 28.64% | 19.48% |
| Selling, General & Admin | 145.34M | 128.95M | 113.27M | 103.12M | 84.96M | 70.39M | 46.32M | 55.82M | 37.53M |
| SG&A % of Revenue | - | 10.55% | 11.15% | 11.57% | 11.64% | 11.71% | 13.53% | 12.79% | 10.73% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 3M | -3.28M | 640.64M | 45.73M | 37.66M | 31.6M | 30.78M | 69.15M | 30.6M |
| Operating Income | 57.03M | 33.77M | 38.91M | 41.27M | 16.91M | 22.24M | -47.22M | -37.56M | 3.23M |
| Operating Margin % | 4.22% | 2.76% | 3.83% | 4.63% | 2.32% | 3.7% | -13.79% | -8.61% | 0.92% |
| Operating Income Growth % | - | -13.2% | -5.72% | 144% | -23.96% | 147.1% | -25.74% | -1261.65% | - |
| EBITDA | 143.62M | 108.78M | 96.62M | 82.49M | 51.14M | 54.62M | -16.5M | -9.53M | 29.36M |
| EBITDA Margin % | 10.62% | 8.9% | 9.51% | 9.25% | 7% | 9.09% | -4.82% | -2.18% | 8.39% |
| EBITDA Growth % | 55.36% | 12.59% | 17.13% | 61.29% | -6.37% | 431.1% | -73.12% | -132.46% | - |
| D&A (Non-Cash Add-back) | 86.59M | 75.01M | 57.72M | 41.22M | 34.23M | 32.38M | 30.73M | 28.03M | 26.12M |
| EBIT | 20.45M | 28.83M | 40.67M | 44.14M | 17.82M | 20.47M | -46.74M | -37.81M | 7.71M |
| Net Interest Income | -9.61M | -16.7M | -12.64M | -8.06M | -5.23M | -20.1M | -22.82M | -20.08M | 0 |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 9.61M | 16.7M | 12.64M | 8.06M | 5.23M | 20.1M | 22.82M | 20.08M | 0 |
| Other Income/Expense | -46.2M | -21.64M | -10.88M | -5.19M | -4.32M | -21.87M | -22.33M | -20.34M | -15.76M |
| Pretax Income | 10.83M | 12.13M | 28.03M | 36.08M | 12.59M | 370K | -69.55M | -57.89M | -12.52M |
| Pretax Margin % | 0.8% | 0.99% | 2.76% | 4.05% | 1.72% | 0.06% | -20.31% | -13.27% | -3.58% |
| Income Tax | -10.83M | -7.3M | 9.1M | 10.69M | 5.68M | 2.48M | -19.87M | -12.42M | -221K |
| Effective Tax Rate % | -100.01% | -60.16% | 32.47% | 29.63% | 45.14% | 669.46% | 28.57% | 21.45% | 1.76% |
| Net Income | 19.61M | 19.43M | 18.93M | 25.39M | 6.91M | -2.11M | -49.68M | -45.44M | -12.3M |
| Net Margin % | 1.45% | 1.59% | 1.86% | 2.85% | 0.95% | -0.35% | -14.51% | -10.41% | -3.52% |
| Net Income Growth % | 452.1% | 2.68% | -25.45% | 267.53% | 427.81% | 95.76% | -9.34% | -269.54% | - |
| Net Income (Continuing) | 21.66M | 19.43M | 18.93M | 25.39M | 6.91M | -2.11M | -49.68M | -45.47M | -12.3M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 250K |
| EPS (Diluted) | 0.31 | 0.31 | 0.30 | 0.41 | 0.11 | -0.04 | -0.86 | -0.79 | -0.27 |
| EPS Growth % | 307.47% | 3.33% | -26.83% | 272.73% | 375% | 95.35% | -8.86% | -192.59% | - |
| EPS (Basic) | - | 0.32 | 0.31 | 0.43 | 0.12 | -0.04 | -0.86 | -0.79 | -0.27 |
| Diluted Shares Outstanding | 62.55M | 62.84M | 62.35M | 61.19M | 60.14M | 48.21M | 58.51M | 58.51M | 45.01M |
| Basic Shares Outstanding | 61.72M | 60.96M | 60.37M | 59.53M | 59.1M | 48.21M | 57.63M | 57.63M | 45.01M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - |
Quick answers to the most common questions about buying FWRG stock.
For fiscal year 2025, First Watch Restaurant Group, Inc. (FWRG) reported total revenue of $1.22B. This represents a 249.5% increase compared to $349.8M in 2018.
First Watch Restaurant Group, Inc. (FWRG) is profitable, generating $19.4M in net income for the fiscal year ending 2025 with a net profit margin of 1.6%.
First Watch Restaurant Group, Inc. (FWRG) reported an operating income of $33.8M, resulting in an operating profit margin of 2.8%. This margin reflects the operational efficiency of the business before interest and taxes.
First Watch Restaurant Group, Inc. (FWRG) generated $159.4M in gross profit for the year, representing a gross profit margin of 13.0%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Thin margins and high leverage
Metrics are mathematically derived from official filings.
Top-Line Growth Decelerating From Peak Pace
Based on the reported quarterly income statements, FWRG's revenue grew roughly 16 to 26 percent year over year through 2025, with the 2026Q3 print slowing to 10.7 percent, suggesting unit expansion momentum may be moderating from its earlier peak.
The 2025Q3 and 2025Q4 quarters showed the strongest comparable growth in the table, but the decline to 10.7 percent in 2026Q3 suggests the growth algorithm is becoming more dependent on new unit openings than on traffic gains. Investors should separate new-store contribution from same-restaurant performance, since the reported figures alone cannot confirm whether demand is broadening. The deceleration warrants monitoring rather than being treated as a settled trend.
Gross Margin Structure Sits Well Below Peers
As reported in the income statement data, FWRG's gross margin has hovered near 19 to 22 percent in most quarters, compared with peer gross margins of roughly 68 to 78 percent, which likely reflects a different cost classification rather than a pure pricing gap.
Because the company appears to include store-level labor and occupancy within cost of sales, direct gross margin comparisons with peers such as DENN or CAKE are not fully like-for-like. The more informative read is the operating margin, which has ranged from roughly 0.4 to 9.5 percent across the period. Margin volatility in the quarters shown suggests sensitivity to food and labor inflation that may be difficult to offset without pricing action.
Operating Leverage Remains Inconsistent
Based on reported figures, FWRG's operating income swung between $1.1 million and $33.8 million across recent quarters, indicating that gross profit gains have not translated into consistent operating leverage on SG&A of roughly $30 to $40 million per quarter.
SG&A has risen steadily alongside revenue, absorbing most incremental gross profit and limiting the pass-through to operating income. The 2026Q2 quarter illustrates how the operating line can expand sharply when the cost base is controlled, but the 2026Q1 and 2025Q1 results show how quickly margins can compress. This pattern suggests the business has not yet demonstrated durable overhead efficiency.
Net Income Tracks Operating Volatility Closely
As reported in the financial statements, FWRG's net income has ranged from a loss of $2.7 million to a profit of $15.2 million, with EPS swings partly driven by non-operating items and a lower net margin than operating margin in most periods.
The gap between operating and net income in several quarters, such as 2026Q3 where operating income of $11.0 million produced net income of $4.8 million, suggests interest expense and tax effects are material. Stock-based compensation of roughly $2.1 to $3.7 million per quarter is modest relative to revenue but remains a recurring cost to reported earnings. The large EPS growth percentages in some periods largely reflect a depressed prior-year base rather than structural improvement.
Thin Cushion Leaves Little Room for Error
Based on the reported quarterly figures, FWRG's trailing net margin of roughly 1.6 percent and debt-to-equity near 1.6 suggest that modest wage or commodity inflation could push several recent quarters into losses.
Short-side analysts would likely focus on the repeated pattern of quarters with near-zero or negative net income despite double-digit revenue growth, which questions whether unit growth is creating value on a per-store basis. The combination of high leverage and a 3.2 percent return on equity suggests limited capacity to absorb a traffic decline. This view depends on the reported figures and warrants further investigation into store-level cash returns.