Happy Belly Food Group Inc., a leader in acquiring and scaling emerging food brands across Canada, has announced its unaudited financial results and corporate update for the fiscal quarter ended September 30, 2025, indicating the 14th consecutive record quarter and third consecutive quarter of positive net income from operations.
“In Q3 2025, Happy Belly Food Group achieved its 14th consecutive record quarter and third consecutive quarter of positive net income from operations,” said Sean Black, Chief Executive Officer. “These milestones-including segmented EBITDA for the QSR division surpassing $1.0 million in Q3 and royalties & fees for the QSR division also surpassing $1.0 million in Q3, both marking firsts for the Company-reinforce our reputation as a disciplined, high-growth multi-brand restaurant operator with a predictable growth model.
“They highlight our ongoing mission to become Canada’s leading acquirer and scaler of emerging food brands while driving long-term shareholder value.
“We have a lot to be proud of as a team, and as an organization. We have truly built a predictable and repeatable growth model that saw our system sales more than double, driving a 125% increase versus the same quarter last year. We successfully added 12 new restaurant locations in Q3 to the Happy Belly portfolio through a mixture of organic and inorganic growth, with another 2 restaurant locations added through our organic growth model so far in Q4, giving Happy Belly 75 operating locations in total.
“I would like to personally congratulate all brand leaders, franchisees, team members and cross functional teams for a truly great quarter. The team continues to execute our aggressive growth plan which has led to significant growth in Q3. System sales reached $19.2M (+125%), and total revenues of $7.2M (+188%) supported by our adjusted EBITDA reaching a new high of 10.4% in Q3.
“Our core principles have been the 3P’s: People, Product and Process, while staying operationally and financially disciplined throughout our execution plan. These strong results are a testament to the team-oriented culture we have built at Happy Belly. Our management team and brand partners are working together to support our franchisees in national and US expansion as we anticipate to deliver significant organic growth beyond our original expectations in 2026. With a clear focus on growth, we believe our best chapters are still to come.”
Q3 2025 Financial Highlights
- System wide sales across Quick Service Restaurants (QSR) totaled $19.2M in the third quarter of fiscal 2025, up 125% versus the same quarter last year (2024 – $8.5M). The increase is attributed to organic baseline restaurant growth, alongside increased restaurant count, which reached 73 operating restaurants at the end of Q3 2025, up 109% versus 35 in the prior year.
- Total operating revenues, vendor rebates and interest income totaled $7.2M in Q3 2025, up 194% versus the same quarter last year (2024 – $2.5M), and for the nine months ended September 30, 2025, $16.6M up 149% from 2024 (2024-$6.7M).
- Year-over-year growth was driven by continued sales growth in both the Quick Serve Restaurant (QSR) and Consumer Product Goods (CPG) segments, multiple business acquisitions in the past twelve months, and new restaurants being added to the portfolio (12 additional restaurants during Q3 2025).
- Total product sales totaled $6.0 in the third quarter of 2025, up 224% versus the same quarter last year (2024 – $1.9M). In addition, royalties and franchise fee revenues reached $1.1M during the quarter, up 297% from the prior year (2024 – $0.3M), which was driven by an increase in royalties collected from 55 franchised restaurants in the system.
- Adjusted EBITDA reached $0.7M or 10.4% in the third quarter of fiscal 2025, up from $0.1M or 4.2% in the same quarter last year. During the third quarter of fiscal 2025, net income from operations was $0.3M up from a net loss of $0.1M in the same quarter of 2024.
- Segmented EBITDA for the QSR division surpassed $1.0M in Q3, marking a first for the Company.
- Royalties & Fees for the QSR division surpassed $1.0M in Q3, marking a first for the Company.
- Net working capital remains healthy at $2.8M as of September 30, 2025 (December 31, 2024 – $3.3M). Total cash and cash equivalents were $3.3M as of September 30, 2025 (December 31, 2024 -$3.5M). Furthermore, cash flows before non-cash working capital was positive $0.7M in Q3 2025 up from $0.1M in the same quarter last year.
- In the third quarter, the Company generated $0.8M in cash flow from operating activities up from negative $(0.2)M in the same quarter of 2024.
- During Q3 2025, Happy Belly added 12 restaurants to its growing portfolio. Heal Wellness opened two new locations in Aurora and Kensington. Rosie’s Burgers opened a new location in Bridgeland. The acquisition of Salus Fresh Foods added nine new locations in the GTA. Following the close of Q3, Happy Belly further expanded by opening iQ foods on Avenue Rd and Yolks on Bloor St West. These additions bring the total number of restaurants in the Happy Belly portfolio to 75.
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