Yum Brands — Income Statement, Cash Flows & Balance Sheet
Is Yum! Brands profitable?
Revenue is growing solidly, driven by a big jump in directly operated restaurant sales.
| 2023 | 2024 | 2025 | Change (2024→2025) | |
|---|---|---|---|---|
| Total revenues | $7,076M | $7,549M | $8,214M | +$665M (+8.8%) |
| Company sales | $2,142M | $2,552M | $2,945M | +$393M (+15.4%) |
| Franchise & property revenues | $3,247M | $3,295M | $3,473M | +$178M (+5.4%) |
Revenue grew at a healthy clip, with the biggest jump coming from company-operated restaurants — largely because Yum! acquired hundreds of Taco Bell and KFC locations from franchisees during the year rather than organic same-store growth.
Operating profit improved, but a higher tax bill kept net income gains modest.
| 2024 | 2025 | Change | |
|---|---|---|---|
| Operating profit | $2,403M | $2,574M | +$171M (+7.1%) |
| Income tax provision | $414M | $518M | +$104M (+25.1%) |
| Effective tax rate | 21.8% | 24.9% | +3.1 pts |
| Net income | $1,486M | $1,559M | +$73M (+4.9%) |
Operating profit grew nicely, but a higher effective tax rate — driven partly by the newly enacted "One Big Beautiful Bill Act" and one-time items tied to a Pizza Hut intellectual property reorganisation — absorbed much of that gain, leaving net income only modestly ahead.
Where does Yum! Brands' revenue come from?
Taco Bell and KFC are the profit engines; Pizza Hut is shrinking and under strategic review.
| Division | 2024 Operating Profit | 2025 Operating Profit | Change |
|---|---|---|---|
| KFC | $1,363M | $1,503M | +$140M (+10.3%) |
| Taco Bell | $1,049M | $1,129M | +$80M (+7.6%) |
| Pizza Hut | $373M | $340M | -$33M (-8.8%) |
| Habit Burger & Grill | $0M | -$13M | deteriorating |
KFC and Taco Bell together account for nearly all divisional profit, and both grew solidly. Pizza Hut moved in the wrong direction — Yum! has formally launched a strategic options review (potentially including a sale) and booked roughly $41M in related one-time charges in 2025. Habit Burger & Grill slipped back into a loss.
Does Yum! Brands generate cash?
Yum! is a strong cash generator, though big acquisition spending more than offset free cash flow.
| 2023 | 2024 | 2025 | Change (2024→2025) | |
|---|---|---|---|---|
| Operating cash flow | $1,603M | $1,689M | $2,010M | +$321M |
| Capital spending (capex) | $285M | $257M | $371M | +$114M |
| Free cash flow (GAAP operating - capex) | $1,318M | $1,432M | $1,639M | +$207M |
| Franchise acquisitions | $0M | $208M | $782M | +$574M |
| Dividends paid | $678M | $752M | $789M | +$37M |
| Share repurchases | $50M | $441M | $552M | +$111M |
Free cash flow (operating cash minus capex) hit a new high, reflecting the asset-light franchise model's earning power. However, Yum! spent heavily buying back restaurant locations from franchisees, and returned over $1.3 billion to shareholders via dividends and buybacks — funding the gap with new borrowings.
How strong is Yum! Brands' balance sheet?
Yum! carries a very large debt load by design, funded by its highly predictable franchise royalty stream.
| 2024 | 2025 | Change | |
|---|---|---|---|
| Long-term debt | $11,306M | $11,872M | +$566M |
| Cash & equivalents | $616M | $709M | +$93M |
| Net debt (approx.) | ~$10,690M | ~$11,163M | +$473M |
| Total shareholders' deficit | -$7,648M | -$7,325M | improving |
Yum! intentionally runs with substantial debt — a common structure for franchise businesses with stable, royalty-like cash flows. The shareholders' deficit (meaning total liabilities exceed total assets on paper) is not a sign of distress here; it reflects years of share buybacks funded by borrowing. Debt covenant compliance was confirmed as of year-end, and the company refinanced a key tranche of Taco Bell securitisation notes in 2025, pushing near-term maturities out. One notable tail risk: the IRS is claiming approximately $2.1 billion in unpaid taxes (plus penalties and ~$2.1 billion in accrued interest) related to a 2014 corporate reorganisation — Yum! is contesting this in Tax Court and has recorded no reserve for it.