Executive Summary
RAVE Restaurant Group delivered a solid QQ2 2025 with revenue of $2.87 million, a gross profit of $2.04 million and an operating income of $0.664 million, yielding an operating margin of 23.1% and a net income of $0.607 million (EPS $0.04). The quarter benefited from a robust gross margin of 71.1% and strong cash generation, despite a sequential revenue decline (~5.93% QoQ from Q1 2025). EBITDA was $0.78 million and the EBITDA margin stood around 27.2%, underscoring profitability leverage at the unit level amid a conservative cost base. Free cash flow for the quarter was $0.651 million, with net cash provided by operating activities of $0.695 million. At quarter-end, RAVE held cash and short‑term investments totaling approximately $8.92 million against total liabilities of $2.34 million and total equity of $13.78 million, resulting in a net debt position of approximately negative $2.11 million. The balance sheet remains exceptionally liquid (current ratio 7.19) with minimal leverage (total debt to capitalization ~5.25%; debt to equity ~5.54%), providing ample capacity to fund expansion via its franchising platforms (Pizza Inn Franchising, Pie Five Franchising) and opportunistic investments.
However, management did not issue formal forward guidance in conjunction with QQ2, limiting near-term directional visibility. The absence of an earnings call transcript in the provided data constrains qualitative read-throughs from management commentary. Investors should weigh the favorable margin and liquidity backdrop against a relatively small revenue base and the inherent cyclicality and competitive dynamics of the casual-dining and quick-service restaurant landscape. Overall, RAVE presents a defensible liquidity position and margin profile that could support measured franchising growth and selective investments, pending clearer cadence from management on same-store trends and unit openings going forward.
Key Performance Indicators
Key Insights
Revenue: $2.87M in QQ2 2025, YoY +2.76%, QoQ -5.93%; Gross Profit: $2.04M, YoY +7.88%, QoQ -0.73%; Gross Margin: 71.1%; Operating Income: $0.664M, YoY +34.41%, QoQ +8.32%; Net Income: $0.607M, YoY +9.76%, QoQ +15.40%; EPS: $0.04, YoY +4.44%, QoQ +10.80%; EBITDA: $0.78M, EBITDA Margin ~27.17%; Net Debt: negative $2.11M; Cash & Investments: cash and short-term investments ~$8.92M; Cash Flow: operating cash flow $0.695M; Free Cash Flow $0.651M; Capex $0.044M; Working Capital and Liquidity: Curr...
Financial Highlights
Revenue: $2.87M in QQ2 2025, YoY +2.76%, QoQ -5.93%; Gross Profit: $2.04M, YoY +7.88%, QoQ -0.73%; Gross Margin: 71.1%; Operating Income: $0.664M, YoY +34.41%, QoQ +8.32%; Net Income: $0.607M, YoY +9.76%, QoQ +15.40%; EPS: $0.04, YoY +4.44%, QoQ +10.80%; EBITDA: $0.78M, EBITDA Margin ~27.17%; Net Debt: negative $2.11M; Cash & Investments: cash and short-term investments ~$8.92M; Cash Flow: operating cash flow $0.695M; Free Cash Flow $0.651M; Capex $0.044M; Working Capital and Liquidity: Current ratio 7.19; Quick ratio 7.19; Cash at end of period $2.871M; Total assets $16.115M; Total liabilities $2.336M; Total equity $13.779M; Revenue per share (approx): $0.19; Net income per share (EPS) $0.04; Valuation ticks: P/S ~13.5x, P/B ~2.81x, P/E ~15.97x; Return metrics: ROA 3.77%, ROE 4.41%, ROCE 4.52%; Growth and profitability signals are positive, but base effects and franchise revenue mix require monitoring.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
2.87M |
2.76% |
-5.93% |
| Gross Profit |
2.04M |
7.88% |
-0.73% |
| Operating Income |
664.00K |
34.41% |
8.32% |
| Net Income |
607.00K |
9.76% |
15.40% |
| EPS |
0.04 |
4.44% |
10.80% |
Key Financial Ratios
operatingProfitMargin
23.1%
operatingCashFlowPerShare
$0.05
freeCashFlowPerShare
$0.04
Management Commentary
No earnings call transcript provided in the data. Management commentary and qualitative guidance from QQ2 2025 are therefore not extractable from the provided document footprint.
Forward Guidance
There is no formal forward guidance attached to QQ2 2025 in the provided data. In absence of explicit targets, the outlook hinges on franchise execution, store-level profitability, and the ability to scale the Pizza Inn Franchising and Pie Five Franchising platforms. Key factors to monitor include: (1) trajectory of systemwide same-store sales and unit openings, (2) franchise fee growth and royalty mix, (3) capital allocation to supporting franchised growth vs. Company-Owned initiatives, and (4) ongoing competitive dynamics in the U.S. pizza segment and any international franchise activity. Given the strong quarterly margins and liquidity, management could act to accelerate franchising investments if demand remains resilient, but investors should wait for concrete guidance on unit economics, opening cadence, and capital allocation expectations.