Segment Information

3 Months Ended

Mar. 30, 2025

Segment Reporting [Abstract]

Segment Information

11. Segment Information

We have four reportable segments: Domestic Company-owned restaurants, North America franchising, North America commissaries, and International operations. The Domestic Company-owned restaurant segment consists of the operations of all Domestic Company-owned restaurants and principally generates revenues from retail sales of pizza and other food and beverage products. The North America franchising segment consists of our franchise sales and support activities and derives its revenues from sales of franchise and development rights and the collection of royalties from our franchisees located in the United States and Canada. The North America commissaries segment consists of the operations of our regional dough production and product distribution centers in the United States and Canada and derives its revenues principally from the sale and distribution of food and paper products to Domestic Company-owned and franchised restaurants in the United States and Canada. The International segment consists of the operations of all Company-owned restaurants located in the UK, as well as distribution sales to franchised Papa Johns restaurants located in the UK and our franchise sales and support activities, which derive revenues from sales of franchise and development rights and the collection of royalties from our International franchisees. International franchisees are defined as all franchise operations outside of the United States and Canada. Our reportable segments are distinct business units that provide different products or services. Separate management of each segment is required because each business unit is subject to different operational issues and strategies. Certain administrative and capital costs are allocated to each of our segments based upon predetermined rates or estimated resource usage.

All other business units that do not meet the quantitative or qualitative thresholds for determining reportable segments, which are not operating segments, we refer to as “All Other”. These consist of operations that derive revenues from franchise contributions to marketing funds and information systems and related services used in restaurant operations, including our point-of-sale system, online and other technology-based ordering platforms.

Our chief operating decision maker (“CODM”) is the Chief Executive Officer. Beginning in the first quarter of 2025, the Company updated its measure of segment profit or loss to be adjusted EBITDA, which aligns with how the CODM evaluates performance of and allocates resources to our segments. For comparability purposes, segment results for the prior year period have been recast to reflect this change in measure of segment profit or loss. Adjusted EBITDA represents Net income before Net interest expense, Income tax expense, Depreciation and amortization, Stock-based compensation expense, and other adjustments that vary from period to period, including certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business. During the annual budget and forecasting process, the CODM uses adjusted EBITDA to allocate resources (including employees, property, and financial or capital resources) to the segments. The CODM regularly reviews trends in adjusted EBITDA on at least a quarterly basis to evaluate the profitability of the segments and to make resource allocation decisions. When our CODM reviews balance sheet information, it is at a consolidated level.

Segment Results

The tables below present our operating results by segment (in thousands). The significant expense categories and amounts presented in the tables below align with the segment-level information that is regularly provided to the CODM. A reconciliation to Company results is included in the following section.

	Three Months Ended March 30, 2025
	Domestic Company-owned restaurants		North America franchising		North America commissaries		International		Total
Revenues from external customers	$	170,795	$	35,552	$	212,918	$	39,111	$	458,376
Intersegment revenues	—		1,259		51,458		—		52,717
Segment revenue	$	170,795	$	36,811	$	264,376	$	39,111	$	511,093
Less segment expenses (a):
COS - Product Costs	$	52,137	$	—	$	189,469	$	11,146	$	252,752
COS - Salaries & Benefits	57,976		—		29,982		1,568		89,526
COS - Other (d)	44,900		—		16,280		7,071		68,251
General & Administrative	10,750		9,563		9,292		8,844		38,449
Other Segment Expenses (c)	—		—		—		5,101		5,101
Segment adjusted EBITDA	$	5,032	$	27,248	$	19,353	$	5,381	$	57,014
	Three Months Ended March 31, 2024
	Domestic Company-owned restaurants		North America franchising		North America commissaries		International		Total
Revenues from external customers	$	176,224	$	35,697	$	203,287	$	46,673	$	461,881
Intersegment revenues	—		1,049		49,267		—		50,316
Segment revenue	$	176,224	$	36,746	$	252,554	$	46,673	$	512,197
Less segment expenses (a):
COS - Product Costs	$	50,528	$	—	$	182,124	$	12,494	$	245,146
COS - Salaries & Benefits	57,471		—		29,581		5,480		92,532
COS - Other (d)	43,107		—		14,582		12,881		70,570
General & Administrative (b)	10,180		8,238		9,091		8,739		36,248
Other Segment Expenses (c)	—		—		—		2,886		2,886
Segment adjusted EBITDA	$	14,938	$	28,508	$	17,176	$	4,193	$	64,815

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(a)    Segment expenses exclude Depreciation and amortization, Stock-based compensation expense, and certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business (see reconciliation that follows).

(b)    The Company prospectively adjusted for updates in internal cost allocation methodologies in our Annual Report on Form 10-K for the year ended December 29, 2024, which increased the amount of internal general and administrative expenses allocated to the segments from Unallocated corporate expenses. These methodology updates have been reflected in the 2024 quarterly results. Refer to Note 23 of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 29, 2024 for additional information.

(c)    Other Segment Expenses represent all operating expenses that are not included in the significant segment expense categories. The components of Other Segment Expense are advertising fund expenses and other operating expenses.

(d)    We have included “COS - Other” as a significant expense category beginning in the first quarter of 2025, consistent with the segment expense categories regularly provided to the CODM when evaluating segment performance and allocating resources. “COS - Other” includes delivery expenses, Company-owned restaurant advertising costs, insurance, rent, aggregator fees, and other costs of sales. For comparability purposes, we have recast quarterly 2024 segment results to include this expense category.

Reconciliation of Segment Results to Company Results

The following table reconciles Total Revenues from our segments to Total Revenues and Total Adjusted EBITDA from our segments to Income before income taxes (in thousands):

	Three Months Ended
	March 30, 2025		March 31, 2024
Total Segment Revenue	$	511,093	$	512,197
All Other Revenue (a)	74,331		65,207
Elimination of intersegment revenue	(67,115)		(63,488)
Total Revenue	$	518,309	$	513,916
	Three Months Ended
	March 30, 2025		March 31, 2024
Total Segment adjusted EBITDA	$	57,014	$	64,815
All Other adjusted EBITDA (a)	10,164		6,898
Unallocated corporate expenses, adjusted (b)	(17,554)		(11,148)
Elimination of Intersegment profit (loss)	—		—
Other income/(expense) adjustments to reconcile to income before income before income taxes (c)	(25,659)		(26,847)
Net interest expense	(10,079)		(11,063)
Income before income taxes	$	13,886	$	22,655

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(a)    As noted in the commentary above, All Other revenue and adjusted EBITDA is derived from business units that do not meet the quantitative or qualitative thresholds for determining reportable segments, including: franchise contributions to marketing funds and information systems and related services used in restaurant operations.

(b)    Unallocated corporate expenses represent administrative fees incurred by the restaurant support centers, including: information systems and related services, corporate salaries and bonuses, and other corporate costs. These expenses are adjusted for depreciation and amortization, stock-based compensation expense, and certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business (see reconciliation that follows).

(c)    Other income/(expense) adjustments represent Depreciation and amortization, Stock-based compensation expense, and certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business. As such, management excludes these items from the evaluation of adjusted EBITDA. For the periods above, the adjustments include:

	Three Months Ended
(in thousands)	March 30, 2025		March 31, 2024
Depreciation and amortization	$	18,343	$	17,674
International restructuring costs (see Note 9)	2,180		9,543
Net expenses due to natural disasters	892		—
Strategic initiative costs	575		—
Stock-based compensation expense	3,669		(370)
Other (income)/expense adjustments	$	25,659	$	26,847

Disaggregation of Revenue

Our segments earn revenue from both external and internal customers. No single external customer accounted for 10% or more of our total revenues. We account for intercompany sales and transfers as if the sales or transfers were to third parties and subsequently eliminate the activity. The accounting policies of our segments are the same as those described in 2. Significant Accounting Policies.

In the following tables, revenues are disaggregated by major product/service line. The tables also include a reconciliation of the disaggregated revenues by the reportable segment (in thousands):

	Three Months Ended March 30, 2025
	Domestic Company-owned restaurants		North America franchising		North America commissaries		International		All Other		Elimination of Intersegment Revenue		Total
Company-owned restaurant sales	$	170,795	$	—	$	—	$	3,086	$	—	$	—	$	173,881
Franchise royalties and fees	—		36,811		—		12,504		—		(1,259)		48,056
Commissary sales	—		—		264,376		16,022		—		(51,457)		228,941
Other revenues	—		—		—		3,284		25,078		(4,605)		23,757
Advertising funds revenue	—		—		—		4,215		49,253		(9,794)		43,674
Total revenues	$	170,795	$	36,811	$	264,376	$	39,111	$	74,331	$	(67,115)	$	518,309
	Three Months Ended March 31, 2024
	Domestic Company-owned restaurants		North America franchising		North America commissaries		International		All Other		Elimination of Intersegment Revenue		Total
Company-owned restaurant sales	$	176,224	$	—	$	—	$	15,027	$	—	$	—	$	191,251
Franchise royalties and fees	—		36,746		—		11,456		—		(1,049)		47,153
Commissary sales	—		—		252,554		14,225		—		(49,267)		217,512
Other revenues	—		—		—		3,064		21,524		(3,653)		20,935
Advertising funds revenue	—		—		—		2,901		43,683		(9,519)		37,065
Total revenues	$	176,224	$	36,746	$	252,554	$	46,673	$	65,207	$	(63,488)	$	513,916