EARNINGS RESULTS · Q2 2026

McDonald’s Q2 2026: Revenue Up 3.76%, Operating Margin 47.03%

Results for the quarter ended 2026-06-30 bring the business drivers and cash after investment into focus. Quarterly free cash flow was $1.98 bn. The dated assessment on 2026-10-08 was buy at a reference price of $230.88.

McDonald’s · MCDPublished October 8, 2026Quarter ended June 30, 2026

Q2 2026: What the Quarter Delivered

Revenue: $7.1 bn
Revenue growth YoY: 3.8%
Operating income: $3.34 bn
Operating margin: 47%
Diluted EPS, GAAP: $3.32

McDonald’s reported $7.1 bn of revenue in Q2 2026. Revenue rose 3.76% from the comparable prior-year quarter. Operating profit was $3.34 bn, with an operating margin of 47.03%. Reported diluted EPS was $3.32.

The latest reported quarter supports the franchise thesis: consolidated revenue, operating income and net income increased against the comparable fiscal quarter.

How Revenue Reached Operating Profit

The quarter's revenue and operating result imply an operating margin of 47.03%: $47.03 of operating profit for every $100 of revenue, before interest and tax.

Reported operating profitability remained strong, though the margin eased against the comparable fiscal quarter.

What the Reported Earnings Include

Other non-operating income: $0.01 bn
GAAP net income: $2.36 bn
Diluted weighted-average shares: 0.71 bn shares

Q2 2026 GAAP net income was $2.36 bn. Other non-operating income was $0.01 bn.

Our valuation uses subjective normalized operating earnings, not reported GAAP earnings or company guidance.

Share reduction enhances the earnings attributable to remaining shareholders, but it is most valuable when supported by cash generation rather than increasingly burdensome financing.

Cash Left After Investment

Operating cash flow: $11.34 bn
OCF less cash PPE purchases, plus PPE sales: $8.03 bn
Quarterly operating cash flow: $2.81 bn
Quarterly cash CapEx: $0.83 bn
Quarterly OCF less cash PPE purchases: $1.98 bn

In Q2 2026, operating cash flow of $2.81 bn less cash capital expenditure of $0.83 bn left $1.98 bn of free cash flow. Operations funded cash investment and left cash after that spending.

Reported operating cash flow increased against the comparable fiscal quarter and comfortably exceeded cash purchases of property, plant and equipment.

The Verdict Recorded on 2026-10-08

Verdict Invest recorded buy on 2026-10-08, using a reference price of $230.88 dated 2026-10-07. This assessment relates to the Q2 2026 results, with a 12-month horizon and stated validity through 2026-11-07.

Confirmation to watch: Restaurant expansion translating into additional rent and royalty revenue.
Confirmation to watch: Continued sales growth with disciplined restaurant and administrative costs.
Confirmation to watch: Sustained cash generation supporting net share reduction without weakening debt servicing capacity.
Confirmation to watch: Market recognition of durable franchise earnings through a stronger valuation multiple.
Risk to this assessment: Persistent demand weakness that undermines franchise revenue and restaurant economics.
Risk to this assessment: Sustained margin erosion as restaurant and administrative costs outpace revenue.
Risk to this assessment: Cash investment absorbing materially more operating cash without corresponding earnings growth.
Risk to this assessment: Refinancing pressure or rising interest expense that materially reduces recurring shareholder earnings.