Executive Summary
RAVE Restaurant Group Inc reported a positive QQ3 2025 with modest year-over-year growth and solid margins, underscored by a liquidity-rich balance sheet and positive operating cash flow. Revenue of 2.966 million rose 0.14% year-over-year and 3.38% quarter-over-quarter, while gross profit reached 2.198 million for a gross margin of 74.1%. Operating income stood at 0.866 million (operating margin ~29.2%), leading to net income of 0.722 million and earnings per share of 0.05. The quarter benefits from a lean cost structure and franchise-focused business model, which supports high margins even at a small scale. Net cash provided by operating activities was 0.953 million, with free cash flow also reported at 0.953 million, indicating efficient cash generation relative to the scale of the business. The balance sheet shows minimal leverage, a robust current ratio (6.51x), and a net debt position near zero, reflecting prudently managed liquidity amid a capital-light strategy. However, the company maintains a sizeable portion of short-term investments (marketable securities) which, while enhancing liquidity, adds asset sensitivity to market fluctuations. Overall, the QQ3 2025 results reinforce a stable, cash-generative model with potential for disciplined growth through franchising, while underscoring the need to monitor unit economics and brand/vintage risk in a highly franchise-dependent environment.
Key Performance Indicators
Key Insights
Revenue: 2.966 million (YoY +0.14%; QoQ +3.38%)
Gross Profit: 2.198 million (Gross Margin 74.1%)
EBITDA: 1.017 million; EBITDA Margin ~34.29%
Operating Income: 0.866 million (Operating Margin 29.2%)
Net Income: 0.722 million (Net Margin 24.34%)
EPS: 0.05; Diluted EPS: 0.05
Cash Flow: Operating cash flow 0.953 million; Free cash flow 0.953 million
Balance Sheet: Total assets 15.711 million; Total liabilities 2.363 million; Total stockholders’ equity 13.348 million; Current ratio 6.51; Net debt ...
Financial Highlights
Revenue: 2.966 million (YoY +0.14%; QoQ +3.38%)
Gross Profit: 2.198 million (Gross Margin 74.1%)
EBITDA: 1.017 million; EBITDA Margin ~34.29%
Operating Income: 0.866 million (Operating Margin 29.2%)
Net Income: 0.722 million (Net Margin 24.34%)
EPS: 0.05; Diluted EPS: 0.05
Cash Flow: Operating cash flow 0.953 million; Free cash flow 0.953 million
Balance Sheet: Total assets 15.711 million; Total liabilities 2.363 million; Total stockholders’ equity 13.348 million; Current ratio 6.51; Net debt approx. -0.067 million; Cash and cash equivalents 0.734 million; Short-term investments 7.988 million; Marketable securities contribute to liquidity while keeping leverage low
Valuation (as provided): Price to Book ~2.99; Price to Sales ~13.45; Enterprise Value Multiple ~39.16; Price to Operating Cash Flows ~41.86; Price to Free Cash Flows ~41.86
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
2.97M |
0.14% |
3.38% |
| Gross Profit |
2.20M |
5.07% |
7.75% |
| Operating Income |
866.00K |
7.05% |
30.42% |
| Net Income |
722.00K |
10.40% |
18.95% |
| EPS |
0.05 |
11.61% |
25.00% |
Key Financial Ratios
operatingProfitMargin
29.2%
operatingCashFlowPerShare
$0.07
freeCashFlowPerShare
$0.07
Management Commentary
No earnings call transcript data provided in the supplied materials; as a result, quotes and transcript-driven themes cannot be extracted at this time. If a transcript becomes available, we will extract management commentary on unit economics, franchise pipeline, cost control, and any changes in capital allocation strategy.
No transcript quotes available in the provided data.
— N/A
No transcript quotes available in the provided data.
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Forward Guidance
No formal forward guidance was included in the QQ3 2025 filing. Given the franchise-centric model, the key drivers of future performance will likely be unit-level profitability, franchise expansion velocity, royalty revenue stability, and any shifts in cost structure. Investors should monitor: (1) franchise store pipeline and same-store sales trends (if disclosed in supplemental materials), (2) changes in royalty mix or fee structures, (3) any capital allocation decisions related to marketable securities versus cash deployment, and (4) potential changes in supply costs or inflation impacting operating expenses. In absence of explicit guidance, the company’s strong liquidity and low leverage suggest capacity to fund modest unit growth or selective opportunistic investments without material balance sheet strain.