Noble Romans Swings to Q1 Loss Amid Revenue Dip

TL;DR

**NROM's Q1 loss and revenue drop mean this pizza play is getting cold; stay away until they show a turnaround.**

AI Summary

NOBLE ROMANS INC (NROM) reported a net loss of $100,000 for the three months ended March 31, 2025, a significant deterioration from the net income of $100,000 reported in the same period of 2024. Total revenues decreased by 10% to $2.7 million in Q1 2025, down from $3.0 million in Q1 2024, primarily due to a decline in franchise and licensing fees. The company's strategic outlook includes continued focus on its non-traditional franchise model, but this quarter's results suggest challenges in execution. Key business changes include a reduction in general and administrative expenses by 5% to $1.2 million, which was insufficient to offset the revenue decline. Risks highlighted include ongoing economic uncertainties impacting consumer spending and the competitive quick-service restaurant market. The company also noted a decrease in cash and cash equivalents by 15% to $1.5 million as of March 31, 2025, compared to $1.7 million at December 31, 2024, indicating tightening liquidity.

Why It Matters

This Q1 performance is a red flag for investors, signaling potential operational headwinds and a struggle to maintain profitability in a competitive market. The shift from net income to a net loss, coupled with declining revenue, could erode investor confidence and impact NROM's ability to fund future growth initiatives. For employees, sustained losses could lead to job insecurity or reduced expansion opportunities. Customers might see fewer new locations or menu innovations if the company's financial health continues to decline, while competitors in the quick-service pizza space, like Domino's or Papa John's, could further consolidate market share.

Risk Assessment

Risk Level: high — The company reported a net loss of $100,000 for Q1 2025, a stark contrast to the $100,000 net income in Q1 2024. This significant swing to a loss, coupled with a 10% decrease in total revenues to $2.7 million, indicates deteriorating financial performance and heightened operational risk. Furthermore, cash and cash equivalents decreased by 15% to $1.5 million, suggesting tightening liquidity.

Analyst Insight

Investors should consider reducing their exposure to NROM given the significant swing to a net loss and declining revenues. Monitor future filings for signs of revenue stabilization or a return to profitability before considering any new investment.

Financial Highlights

revenue

$2.7 million

net Income

-$100,000

cash Position

$1.5 million

revenue Growth

-10%

Revenue Breakdown

Key Numbers

• $100,000 — Net Loss (Reported for Q1 2025, a swing from $100,000 net income in Q1 2024.)
• $2.7 million — Total Revenues (Reported for Q1 2025, a 10% decrease from $3.0 million in Q1 2024.)
• 10% — Revenue Decrease (Percentage decline in total revenues from Q1 2024 to Q1 2025.)
• $1.2 million — General and Administrative Expenses (Reported for Q1 2025, a 5% decrease from the prior year.)
• 5% — G&A Expense Decrease (Percentage decrease in general and administrative expenses in Q1 2025.)
• $1.5 million — Cash and Cash Equivalents (As of March 31, 2025, a 15% decrease from December 31, 2024.)
• 15% — Cash Decrease (Percentage decline in cash and cash equivalents from December 31, 2024, to March 31, 2025.)

Key Players & Entities

• NOBLE ROMANS INC (company) — filer of the 10-Q
• Domino's (company) — competitor in the quick-service restaurant market
• Papa John's (company) — competitor in the quick-service restaurant market
• SEC (regulator) — recipient of the 10-Q filing

FAQ

Risk Factors

• Economic Uncertainties [high — market]: Ongoing economic uncertainties are impacting consumer spending, which directly affects the company's revenue streams. This is a significant concern given the decline in franchise and licensing fees.
• Competitive Market [medium — market]: The quick-service restaurant market is highly competitive. NROM faces challenges in maintaining market share and driving growth against established and emerging competitors.
• Liquidity Concerns [medium — financial]: Cash and cash equivalents decreased by 15% to $1.5 million as of March 31, 2025, from $1.7 million at December 31, 2024. This tightening liquidity requires careful management.
• Execution Challenges [medium — operational]: Despite a focus on a non-traditional franchise model, the Q1 2025 results suggest challenges in executing the company's strategy, leading to a net loss and revenue decline.

Industry Context

NOBLE ROMANS INC operates in the highly competitive quick-service restaurant (QSR) sector. The industry is characterized by intense price competition, evolving consumer preferences for healthier options, and the ongoing impact of economic conditions on discretionary spending. Companies in this space must continually innovate in menu offerings, operational efficiency, and marketing to maintain market share.

Regulatory Implications

As a publicly traded company, NROM is subject to SEC regulations, including timely and accurate financial reporting via forms like the 10-Q. Compliance with accounting standards and disclosure requirements is crucial to maintain investor confidence and avoid penalties.

What Investors Should Do

1. Monitor revenue trends closely.
2. Assess the effectiveness of the non-traditional franchise model.
3. Evaluate liquidity and cash management.
4. Analyze cost control measures.

Key Dates

• 2025-03-31: End of Q1 2025 — Reported a net loss of $100,000 and total revenues of $2.7 million, a decline from the prior year.
• 2025-03-31: Cash and Cash Equivalents as of Quarter End — Stood at $1.5 million, a 15% decrease from the end of the previous fiscal year, indicating tightening liquidity.
• 2024-03-31: End of Q1 2024 — Reported a net income of $100,000 and total revenues of $3.0 million.
• 2024-12-31: End of Fiscal Year 2024 — Cash and cash equivalents were $1.7 million.

Glossary

10-Q

A quarterly report required by the U.S. Securities and Exchange Commission (SEC) that provides a continuing view of the company's financial position. (This document provides the detailed financial and operational information for NOBLE ROMANS INC for the first quarter of 2025.)

Franchise and Licensing Fees

Revenue generated from allowing other businesses to operate under the company's brand name and business model. (A key revenue stream for NROM, which experienced a decline in Q1 2025, contributing to the overall revenue decrease.)

General and Administrative Expenses (G&A)

Costs associated with the overall management and operation of a company, not directly tied to the production of goods or services. (NROM reduced these expenses by 5% to $1.2 million in Q1 2025, but it was not enough to offset the revenue decline.)

Cash and Cash Equivalents

Highly liquid short-term investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. (The decrease in this metric to $1.5 million highlights potential liquidity pressures for NROM.)

Year-Over-Year Comparison

Compared to the first quarter of 2024, NOBLE ROMANS INC has experienced a significant downturn. Total revenues decreased by 10% to $2.7 million, a stark contrast to the $3.0 million reported previously. The company swung from a net income of $100,000 in Q1 2024 to a net loss of $100,000 in Q1 2025. While general and administrative expenses were reduced by 5%, this cost-saving measure was outpaced by the revenue decline, leading to the negative net income. No new significant risks were explicitly detailed, but the existing economic and competitive pressures appear to be intensifying.

Filing Details

This Form 10-Q (Form 10-Q) was filed with the SEC on June 26, 2025 regarding NOBLE ROMANS INC (NROM).

View full filing on EDGAR

View Full Filing

View this 10-Q filing on SEC EDGAR