The Filing Desk

McDonald's operating income rose 7% to $3.6 billion in the third quarter on 1% more revenue

By Jon Mc Gowan, The Filing Desk

McDONALD’S CORPORATION · NYSE: MCD Quarter ended September 30, 2026 Form 10-Q filed November 6, 2026 · 0000063908-26-000083 Published
A McDonald's restaurant building with its sign.
A McDonald's restaurant in Miles City, Montana. Photo: dave_mcmt / Flickr, CC BY 2.0

McDonald's revenue rose 1.1% to $7.2 billion in the third quarter, but operating income rose 7.1% to $3.6 billion, so operating margin widened to 50.2%. Diluted earnings per share rose 10.4% to $3.51. McDonald's shares rose 6.5% from the close on November 3 to the close on November 4, the day of the earnings release, while the S&P 500 fund SPY rose 1.7% over the same two closes.

Revenue
$7.2B
1.1% vs Q3 FY2025
Operating income
$3.6B
7.1% vs Q3 FY2025
Net income
$2.5B
9.1% vs Q3 FY2025
Diluted EPS
$3.51
10.4% vs Q3 FY2025
Free cash flow
$2.1B
11.2% vs Q3 FY2025

Revenue edged up while operating income grew faster

Revenue of $7.2 billion compares with $7.1 billion in the third quarter of 2025. In its earnings release, McDonald's said global comparable sales increased 1.5% and systemwide sales, which include restaurants run by franchisees, increased 4%. The release put comparable sales in the U.S. down 0.2%.

Revenue
US$ billions per quarter, fiscal years ending December 31

Operating income rose from $3.4 billion to $3.6 billion. Operating margin was 50.2%, up 2.8 points from 47.4% a year earlier. The 10-Q says results primarily reflected higher sales-driven franchised margins and higher other operating income across all segments.

Operating margin and net margin
Percent of revenue
Operating marginNet margin

Earnings per share rose faster than net income

Net income rose 9.1% to $2.5 billion. The effective tax rate was 22.0%, against 22.8% a year earlier. Diluted earnings per share rose 10.4% to $3.51, a little faster than net income because the diluted share count fell 1.1% to 708 million. The company repurchased $519 million of shares in the quarter and paid $1.3 billion in dividends. It declared a 4% increase in its quarterly dividend, to $1.93 per share.

Diluted earnings per share
US$ per share, by quarter

Free cash flow fell as operating cash flow dropped

Cash from operations was $3.0 billion, down 11.6% from $3.4 billion. Capital spending was $884 million, down 12.6%. Free cash flow, which is cash from operations minus capital spending, was $2.1 billion, down 11.2% from $2.4 billion. That is 30.0% of revenue, against 34.1% in the third quarter of 2025. The dividends and buybacks above came to 85% of the quarter's free cash flow.

Where operating cash flow went
US$ billions per quarter. Each column is cash from operations, split into capital spending and what was left as free cash flow.
Free cash flowCapital spending

Twelve quarters of figures

US$ billions unless stated. Fiscal years end December 31. Fourth-quarter figures are derived as the full year minus the first nine months, so some lines are blank for those quarters. Download these figures (CSV, US$ millions)

Sources: Form 10-Q (SEC EDGAR) · Form 10-Q filing index · EDGAR company facts for McDonald's · McDonald's third-quarter 2026 earnings release (Exhibit 99.1). More figures for McDonald's are on its company page.

This report describes figures the company has published. It is for information only and is not investment advice or a recommendation to buy, sell or hold any security. Check the original filings before relying on any figure. The Filing Desk is not affiliated with McDonald's.