Hello, everyone, and welcome to the 2026 Annual Meeting of Stockholders of Papa John's International, Inc. Today's meeting may include forward-looking statements. Please refer to the slide on your screen for important information that could cause actual results to differ from those forward-looking statements. I will now turn the meeting over to Christopher Coleman, Chair of the Board and Chair of this annual meeting. Sir, please go ahead.
Welcome, ladies and gentlemen. I'm Christopher Coleman, Chair of the Board of Papa John's and Chair of this annual meeting. Before we begin, I'd like to thank our team members and franchisees for their dedication to serving our customers. I'd also like to thank you, our shareholders, for your investment, continued support and engagement. Over the past year, under the leadership of Todd Penegor as CEO, the Papa John's team has been executing a transformation strategy focused on 5 priorities: strengthening our core product, sharpening our marketing message, investing in our technology infrastructure, differentiating our customer experience, and partnering with and evolving our franchisee base. Meaningful progress is being made in each of these areas, even in the highly competitive QSR environment. With that, I'd now like to call the meeting to order. All votes will be delivered to the Inspectors of Election. The Secretary will record the proceedings.
I'd like to start by introducing the board members, all of whom are present today. John Garratt, Stephen Gibbs, Laurette Koellner, Jocelyn Mangan, Sonia Medina, John Miller, and Todd Penegor, President and CEO of Papa John's. Also present is Mike Brueggeman, representing Ernst & Young, independent auditors of the company. After the formal meeting has been adjourned, we will also provide time for general questions. Only validated stockholders will be able to submit questions using the designated field on the web portal. Out of consideration for others, please limit yourself to 1 question. Consistent with our approach to in-person annual meetings, questions or comments that are not related to the proposals under discussion are about personal concerns not shared by stockholders generally or use blatantly offensive language may be ruled out of order.
The board of directors set March 9, 2026 as the date of record for this stockholders meeting. We have available on the virtual annual meeting site a record of stockholders as of that date. A duplicate record has been on file at the office of the company for the last 10 days, available for inspection by any stockholder at any time during usual business hours. I've been advised by the Inspectors of Election that immediately prior to commencement of the meeting, more than a majority of the company's shares of common stock issued and outstanding and entitled to vote are present or represented by proxy at today's meeting. Because a majority of the company's shares is represented here today, a quorum is present and the business of the meeting may proceed. Our secretary, Caroline Oyler, has informed me that the notice for the meeting was duly and properly mailed.
She will file affidavits of mailing of the notice of meeting, proxy card, and proxy statement with the records of the meeting. There are 6 items on the agenda to be voted on today. 1, the election of directors. 2, the ratification of the selection of Ernst & Young LLP as the company's independent auditors for 2026. 3, the advisory approval of the company's executive compensation. 4, the approval of an amendment to the company's certificate of incorporation to remove super majority voting provisions. 5, the approval of an amendment to the company's certificate of incorporation to reduce the special meeting ownership threshold to 25%. 6, a stockholder proposal contained in the proxy statement, if properly presented at this meeting. The polls are now open and will close following the presentation of the final proposal.
If you previously voted by proxy, you do not need to take any further action unless you wish to change your vote. The ballots will be collected and delivered to the Inspectors of Election. The company has appointed Kristen Yoffee and Debbie Tate Johnson to be the Inspectors of Election. They are familiar with the duties and responsibilities of an Inspector of Election at a stockholders meeting. They will report the results after all proxies and votes have been tabulated. I will now ask Caroline Oyler to present the agenda items.
The first item is the election of directors. The nominees and their qualifications are described in the proxy statement dated March 26, 2026, which has been made available to all stockholders of record as of March 9, 2026. I move that the director nominees be elected pursuant to the following resolution. Resolved that each of Christopher Coleman, John Garratt, Stephen Gibbs, Laurette Koellner, Jocelyn Mangan, Sonia Medina, John C. Miller, and Todd Penegor be, and hereby is, elected as a director of the company to serve until the next annual meeting of stockholders and until his or her successor is duly elected and qualified, or until his or her earlier death, resignation, or removal. The second item is the ratification of the selection of Ernst & Young LLP as the company's independent auditors for the fiscal year ending December 27, 2026.
For the third item, I move that the company's executive compensation be approved pursuant to the non-binding advisory vote in the following resolution. Resolved that the stockholders approve the compensation paid to the company's named executive officers as disclosed in the company's 2026 proxy statement pursuant to the rules of the Securities and Exchange Commission, including the compensation discussion and analysis, the compensation tables, and the related footnotes and narrative disclosures. The fourth item is the approval of an amendment to the Papa John's International, Inc. Certificate of Incorporation. I move that the company's amended and restated Certificate of Incorporation, the charter, be amended to eliminate the super majority voting provisions set out in Articles 10th, 14th, and 18th of the charter, the details of which are disclosed in the company's 2026 proxy statement.
The fifth item is the approval of an additional amendment to the company's charter. I move that the company's charter be amended to reduce the ownership threshold required for 1 or more stockholders to call a special meeting of stockholders from 60% of the outstanding shares entitled to vote at the special meeting to 25% of the shares entitled to vote at a special meeting.
The sixth and final item of business is the consideration of a shareholder proposal. The proposal has been submitted by The Accountability Board, which has authorized Matt Prescott to serve as its representative and to present its proposal. Since the proposal and your supporting statement is described in the proxy statement, please limit your remarks to 2 minutes with a brief description of the proposal. Operator, can you please unmute the line of Mr. Prescott? Mr. Prescott, you may now make your statement.
Good morning, everybody. Hope everybody's having a good day. I can keep this very short, way under 2 minutes for the sake of everybody's time. We think that the proposal speaks for itself, and we would really just refer people to the proxy statement who have questions about it. The only thing I'd like to add is that both Institutional Shareholder Services and Glass Lewis are recommending a vote in favor of our proposal, and we also obviously encourage people to vote for it. Thank you very much, and have a great day.
Thank you, Mr. Prescott. This concludes the specific proposals that were established in the notice as the agenda for this meeting. Since there are no additional nominations in accordance with the company's certificate of incorporation, the nominations are now closed. Any stockholders who have not yet voted or wish to change their votes may do so by clicking on the voting button on the web portal and following the instructions. Stockholders who have sent in proxies or voted via telephone or internet and do not want to change their votes do not need to take any further action. We will pause a moment to allow for any final voting. Thank you. The polls shall now be closed for voting. We will pause for another moment while the inspectors of election tabulate the results of the votes.
I am told that the Inspectors of Election have completed the count of the votes and are ready to report the preliminary results to the secretary. Will the secretary please present the preliminary report of the Inspectors of Election?
The inspectors of election have presented their report to me certifying the following results. An affirmative majority of the votes cast on the election of directors at this meeting were voted in favor of each director nominee. An affirmative majority of the company's shares of common stock present at this meeting in person or by proxy and entitled to vote on the matter were voted for the ratification of Ernst & Young LLP as the company's independent auditors for the advisory approval of the company's executive compensation and on a preliminary basis, given the vote count immediately prior to the meeting for the shareholder proposal. Less than 75% of all outstanding shares entitled to vote generally in the election of directors voted to adopt and approve each of the amendments to the amended and restated certificate of incorporation.
As a result, proposals 1, 2, 3, and 6 were approved by the stockholders, and proposals 4 and 5 were not approved by the stockholders. Please note again that the results are preliminary in nature and will be confirmed by the final vote tabulation that will be reported on the company's Form 8-K following the meeting.
Thank you, Caroline. The Secretary will file the final report of the Inspectors of Election, including the final and complete tally of the votes with the records of the meeting in the record books of the company. This concludes the formal business of the meeting. There being no further business before the meeting, I hereby declare the meeting to be adjourned. I will now turn the meeting over to our President and CEO, Todd Penegor, to make brief remarks on our business, after which we will respond to your questions.
Thank you, Chris and Caroline, hello to everyone attending this year's virtual annual meeting. To begin, I'd like to recognize and thank all of our team members, franchisees, and partners for their continued collaboration, enthusiasm, and passion for our brand. To our shareholders and all of our customers, thank you for your continued support. We ended 2025 with global system-wide restaurant sales of approximately $5 billion, reflecting constant currency growth of 1%, revenues of $2.1 billion, and adjusted EBITDA of $201 million. We also generated $61 million of free cash flow, up from $34 million in 2024. Internationally, we have delivered 5 consecutive quarters of positive sales comps. These results were delivered against the backdrop of a more cautious consumer and highly promotional QSR marketplace.
We navigated well, and our transformation plan is resulting in improvements to our brand health, innovation pipeline, technology platform, customer experience, and cost structure. Let me share more. Over the course of the last year, we made great progress in improving our value proposition. Promotions such as our 50% off carryout offer, 9.99 create your own pizza, and our Papa Pairings were effective in improving our value perception scores. We will continue to pulse compelling promotions to meet the customer where they are and support our value strategy as we move forward. We're also leveraging our rebuilt innovation framework to deliver a more consistent flow of impactful innovation at compelling price points. This strategy has already come to life with 6 new menu innovations since September 2025.
To close out the year, we launched Papa Dippa, an on-trend shareable pizza, the Grand Papa, our largest pizza ever, and a new dessert, the Salted Caramel Blondie. We followed this up in January 2026 with Pan Pizza, closing a significant menu gap with our peers. In March 2026, we launched our new oven-toasted sandwiches, expanding our menu lineup beyond traditional QSR pizza. This week, we expanded our sides lineup with cheesy garlic bread, made with the same delicious toasted ciabatta bread featured in our oven-toasted sandwiches. We have even more menu innovation planned for 2026, including additional side offerings to drive add-on sales and margin expansion, and collaborative partnerships with notable global brands. In a competitive QSR marketplace, we are equally focused on sharpening our marketing message. We know pizza is a game played nationally, but 1 locally.
We have reengaged local marketing co-ops to ensure we're effectively reaching and engaging with our local customer. Nearly half our North American system sales are now supported by an advertising co-op. In 2025, we anchored our marketing message around our 6 simple ingredients brand promise as we continue to lean in on Papa John's product differentiation. We also advanced our technology platforms in 2025 to deliver a more seamless experience across our digital assets and owned channels. We launched a new omnichannel app across iOS and Android devices that have outperformed legacy platforms in both reliability and conversion. We also expanded our partnership with Google Cloud as we work to transform our digital ordering and delivery experience through Google's AI-powered food ordering agent.
Finally, we also announced a partnership with PAR Technology to migrate our POS to a more modernized system that delivers real-time insights to inform our decisions and better serve our customers. Differentiating our customer experience across every demand channel remains a key focus. We ended 2025 with nearly 41 million loyalty members, adding 4 million member accounts versus 2024. We delivered higher growth and utilization of our loyalty program during the year as we continued to look for ways to effectively engage with our most valuable customers. Additionally, despite increased competitive pressures and promotional activity on the aggregators, we still view the third-party ecosystem as an important customer acquisition channel. We have a compelling competitive advantage that fits well with the aggregators, and we are evolving our competitive intensity to drive strong performance across the aggregator marketplace.
We continue to partner with our franchisees to accelerate growth and drive improvement in our restaurant economics. We gained momentum in our efforts to optimize our North American supply chain in 2025 and now expect to achieve at least $60 million of system-wide cost savings by 2028 without compromising the customer experience. We also accelerated our restaurant refranchising program, finalizing the transfer of 85 restaurants to a well-capitalized franchisee. Finally, in 2025, we conducted a comprehensive review of our non-customer facing costs and our corporate and field resources. We have identified at least $25 million in enterprise cost savings that we expect to be captured in the next 2 years. We expect these savings will create incremental flexibility across the business and provide fuel for future growth as we work to be a more nimble and efficient organization.
Throughout our more than 40-year history, quality, resilience, and passion for the Papa John's brand have been the foundation of our success. With the support of the board, the executive leadership team, all of our team members, and our franchisees, we remain committed to creating great experiences for our customers each and every day. As we move forward in 2026, we are focused on continuing our transformation work to best position Papa John's to win in a dynamic QSR category. We are confident in our ability to generate profitable growth and value creation for all our stakeholders. Thank you for your continued support and for your investment in Papa John's.
Thank you, Todd. At this time, we would be happy to answer any questions you may have. As a reminder, only validated stockholders will be able to ask questions under the designated field on the web portal. We will attempt to ensure that everyone that has a question will have a chance to be heard, and we will respond to questions. In the interest of time, we will limit everyone to 1 question. As a reminder, the Q&A session is being webcast live this morning.
The first question we've received: Has the board been approached in the prior year by any entity seeking to purchase a majority or all of Papa John's shares?
Thank you for your question. As a general rule, we do not comment on a market speculation or rumors. The Papa John's board and management team are focused on maximizing shareholder value. We're open-minded about any available path to do that. In the last 12 months.
Our second question, is in the last 12 months, legislative act attention has been shined on the outsized influence of proxy advisory firms Glass Lewis and ISS. Does the company agree that further scrutiny should be applied?
We believe that proxy advisors play an important role to educate investors during the proxy season, but welcome any improvements to the process and to increase shareholder engagement. Seeing no further questions at this time, we thank you again for your attendance at this morning's annual meeting of stockholders and for your continued support for Papa John's International. Thank you.
This now concludes the meeting. Thank you for joining, and have a pleasant day.