Arcos Dorados is the largest McDonald's franchisee in the world, with the exclusive right to operate the brand across 21 countries and territories in Latin America and the Caribbean, and the most recent quarterly disclosure confirms the operating model is in the middle of one of its cleanest inflections in years. In the second quarter of 2026 the company printed $1,305.6 million in total revenues, the highest quarterly figure in its history and up 14.3% in US dollars versus the prior-year quarter (up 18.5% in constant currency), alongside systemwide comparable sales growth of 15.3% and consolidated Adjusted EBITDA of $126.8 million, which also set a second-quarter record. Net income attributable to the company nearly doubled to $45.0 million, or $0.22 per share, from $22.6 million a year earlier, and Adjusted Free Cash Flow over the trailing twelve months rose to $143.4 million from $16.1 million.
What we read in the Q2 print is the convergence of three forces that have been building in the background for several quarters: traffic is back in all three divisions, the FIFA World Cup 2026 sponsorship gave the company a unique marketing tailwind across the region, and the deleveraging campaign that began with the 2032 Senior Notes issuance in 2025 is now translating into lower net interest expense. The market had been paying for a balance sheet in transition; the second quarter suggests the transition is closer to complete, with the consolidated net indebtedness to Adjusted EBITDA ratio at 1.09x at quarter-end and 1.1x on a total cash-inclusive basis. We see the trade as straightforward: at a sub-1.2x net leverage ratio, with constant-currency revenue growth running in the high teens and EBITDA margin expansion tracking 70 basis points ex a non-recurring prior-year gain, the franchise is producing both a recovery story and a self-help margin story in the same quarter.
The two things we would watch most carefully are the SLAD division, where constant-currency comparable sales of 42.9% reflect a difficult Argentina comparison being lapped and may look less impressive once that comp normalizes, and the Q2 2025 base, which contained a $6.9 million gain in Mexico from a sub-franchisee transaction. Adjusting both out, the underlying growth is still strong but the headline math looks better than the run-rate. We see ARCO as a mid-cap franchise recovery with embedded deleveraging, not a hyper-growth story, and the report that follows frames what the financials are saying today and where the second half of 2026 has to deliver.