Keurig Dr Pepper Reports Q2 2025 Results and Reaffirms Guidance for 2025

Rhea-AI Summary

Keurig Dr Pepper (NASDAQ: KDP) reported strong Q2 2025 results with net sales increasing 6.1% to $4.2 billion. On a constant currency basis, net sales grew 7.2%, driven by volume/mix growth of 5.0% and favorable net price realization of 2.2%. The company's adjusted diluted EPS rose 11.1% to $0.49.

Performance was led by robust growth in U.S. Refreshment Beverages (+10.5%), stable U.S. Coffee performance (-0.2%), and International growth of 5.7% on a constant currency basis. KDP reaffirmed its 2025 guidance, expecting mid-single-digit constant currency net sales growth and high-single-digit adjusted diluted EPS growth.

Positive

• Net sales increased 6.1% to $4.2 billion in Q2 2025
• Adjusted diluted EPS grew 11.1% to $0.49
• U.S. Refreshment Beverages segment sales surged 10.5% to $2.7 billion
• International segment achieved 5.7% constant currency net sales growth
• Market share gains in carbonated soft drinks, energy, and sports hydration
• Operating cash flow of $431 million and free cash flow of $325 million

Negative

• U.S. Coffee segment sales declined 0.2% with 3.8% volume/mix decrease
• International reported sales decreased 1.8% due to currency impact
• Foreign currency translation expected to create 0.5% headwind for full year
• Inflationary pressures continue to impact operating costs across segments

Insights

Financial Analyst

KDP delivered solid Q2 with 7.2% constant currency sales growth and 11.1% EPS growth, reaffirming full-year guidance despite challenges ahead.

Keurig Dr Pepper posted robust Q2 2025 results with constant currency net sales growth of 7.2%, driven by strong 5.0% volume/mix improvement and 2.2% favorable pricing. The GHOST acquisition contributed significantly, adding 4.0 percentage points to volume/mix growth, showing management's effective M&A strategy bearing fruit.

Breaking down segment performance reveals a tale of contrasting dynamics. U.S. Refreshment Beverages was the standout performer with 10.5% net sales growth, reflecting successful market share gains in carbonated soft drinks, energy, and sports hydration categories. Meanwhile, U.S. Coffee showed signs of stabilization with nearly flat sales (down just 0.2%), balancing pricing actions (+3.6%) against volume declines (-3.8%). International operations delivered 5.7% constant currency growth despite a 1.8% headline decline due to currency headwinds.

On profitability, KDP demonstrated strong operational discipline with adjusted operating income increasing 7.0% to $1,028 million, maintaining a healthy margin of 24.7%. This translated to adjusted diluted EPS growth of 11.1% to $0.49, outpacing revenue growth and indicating effective cost management despite inflationary pressures.

The company's free cash flow generation of $325 million for the quarter provides flexibility for continued strategic investments, debt reduction, or shareholder returns. Management's reaffirmation of full-year guidance for mid-single-digit constant currency net sales growth and high-single-digit adjusted EPS growth signals confidence in their business trajectory, though they acknowledge "new challenges" in the second half.

This performance demonstrates KDP's resilience in navigating inflationary pressures through a balanced approach of pricing actions, productivity initiatives, and strategic growth investments, positioning them well despite the cautionary note about second-half challenges.

Strong Q2 Results Fueled by Healthy Top-Line Growth and Cost Discipline

Momentum in U.S. Refreshment Beverages and International, with Improving U.S. Coffee Trends

Company Reaffirms 2025 Constant Currency Net Sales and Adjusted EPS Outlook

BURLINGTON, Mass. and FRISCO, Texas, July 24, 2025 /PRNewswire/ -- Keurig Dr Pepper Inc. (NASDAQ: KDP) today reported results for the second quarter of 2025 and reaffirmed its full year guidance.

		Reported GAAP Basis				Adjusted Basis1
		Q2		YTD		Q2		YTD
Net Sales		$4.16 bn		$7.80 bn		$4.16 bn		$7.80 bn
% vs prior year		6.1 %		5.5 %		7.2 %		6.8 %
Diluted EPS		$0.40		$0.78		$0.49		$0.91
% vs prior year		5.3 %		11.4 %		11.1 %		9.5 %

Commenting on the quarter, CEO Tim Cofer stated, "Our Q2 results cemented a strong first half of the year, as we drove robust performance in U.S. Refreshment Beverages, good growth in International, and sequential progress in U.S. Coffee. Today's dynamic environment puts a premium on operational excellence, which we are demonstrating while pushing ahead on our multi-year strategic agenda. Though the back half will present new challenges, we are on track to deliver our 2025 outlook and are confident in the long-term value creation ahead."

Second Quarter Consolidated Results

Net sales for the second quarter increased 6.1% to $4.2 billion. On a constant currency basis, net sales advanced 7.2%, driven by volume/mix growth of 5.0% and favorable net price realization of 2.2%. The acquisition of GHOST contributed 4.0 percentage points to volume/mix growth.

GAAP operating income increased 4.3% to $898 million, including an unfavorable year-over-year impact of items affecting comparability. Adjusted operating income increased 7.0% to $1,028 million and totaled 24.7% of net sales. GAAP and Adjusted operating income growth were driven by net sales growth and productivity savings, partially offset by the impact of inflationary pressures.

GAAP net income increased 6.2% to $547 million, or $0.40 per diluted share, including an unfavorable year-over-year impact of items affecting comparability. Adjusted net income increased 10.5% to $673 million and Adjusted diluted EPS increased 11.1% to $0.49. Adjusted diluted EPS growth was driven by the Adjusted operating income growth.

Operating cash flow for the second quarter was $431 million and free cash flow totaled $325 million.

_______________________

1 Adjusted financial metrics presented in this release are non-GAAP, excluding items affecting comparability. Adjusted growth rates are non-GAAP, excluding items affecting comparability and presented on a constant currency basis. See reconciliations of GAAP results to Adjusted results on a constant currency basis in the accompanying tables.

Second Quarter Segment Results

U.S. Refreshment Beverages

Net sales for the second quarter increased 10.5% to $2.7 billion, driven by volume/mix growth of 9.5% and favorable net price realization of 1.0%. Segment growth reflected market share gains in carbonated soft drinks, energy, and sports hydration, as well as the acquisition of GHOST.

GAAP operating income increased 4.0% to $746 million, which included an unfavorable year-over-year impact of items affecting comparability. Adjusted operating income increased 8.0% to $781 million and totaled 29.4% of net sales. GAAP and Adjusted operating income growth were driven by net sales growth and productivity savings, partially offset by the impact of inflationary pressures.

U.S. Coffee

Net sales for the second quarter decreased 0.2% to $0.9 billion. Favorable net price realization of 3.6% was offset by a volume/mix decline of 3.8%. The approximately flat net sales result reflected K-Cup pricing actions taken to combat inflation, offset by pod and brewer shipment declines.

GAAP operating income increased 2.2% to $233 million. Adjusted operating income increased 2.0% to $299 million and totaled 31.5% of net sales. GAAP and Adjusted operating income growth were driven by net price realization and cost efficiency measures, partially offset by the impact of inflationary pressures.

International

Net sales for the second quarter decreased 1.8% to $0.6 billion. On a constant currency basis, net sales increased 5.7%, driven by favorable net price realization of 5.3% and volume/mix growth of 0.4%. Performance was led by market share gains in key categories such as mineral water in Mexico and single serve coffee in Canada.

GAAP operating income decreased 4.7% to $143 million, including an unfavorable impact from foreign exchange translation. Adjusted operating income increased 2.6% to $145 million and totaled 26.1% of net sales. Adjusted operating income growth was driven by net sales growth and productivity savings, partially offset by the impact of inflationary pressures.

2025 Guidance

The 2025 guidance provided below is presented on a constant currency, non-GAAP basis. The Company does not provide reconciliations of such forward-looking non-GAAP measures to GAAP measures, due to the inability to predict the amount and timing of impacts outside of the Company's control on certain items, such as non-cash gains or losses resulting from mark-to-market adjustments of derivative instruments, among others, which could be material. Reconciling such items would require unreasonable efforts.

KDP reaffirmed its fiscal 2025 guidance for constant currency net sales growth in a mid-single-digit range and Adjusted diluted EPS growth in a high-single-digit range. At current rates, foreign currency translation is forecasted to approximate a one half of one percentage point headwind to full year top- and bottom-line growth.

Investor Contact:

Investor Relations

T: 888-340-5287 / IR@kdrp.com

Media Contact:

Katie Gilroy

T: 781-418-3345 / katie.gilroy@kdrp.com

ABOUT KEURIG DR PEPPER

Keurig Dr Pepper (Nasdaq: KDP) is a leading beverage company in North America, with a portfolio of more than 125 owned, licensed and partner brands and powerful distribution capabilities to provide a beverage for every need, anytime, anywhere. With annual revenue of more than $15 billion, we hold leadership positions in beverage categories including carbonated soft drinks, coffee, tea, water, juice and mixers, and have the #1 single serve coffee brewing system in the U.S. and Canada. Our innovative partnership model builds emerging growth platforms in categories such as premium coffee, energy, sports hydration and ready-to-drink coffee. Our brands include Keurig®, Dr Pepper®, Canada Dry®, Mott's®, A&W®, Peñafiel®, Snapple®, 7UP®, Green Mountain Coffee Roasters®, GHOST®, Clamato®, Core Hydration® and The Original Donut Shop®. Driven by a purpose to Drink Well. Do Good., our 29,000 employees aim to enhance the experience of every beverage occasion and to make a positive impact for people, communities and the planet. For more information, visit www.keurigdrpepper.com and follow us @KeurigDrPepper on LinkedIn and Instagram.

FORWARD LOOKING STATEMENTS

Certain statements contained herein are "forward-looking statements" within the meaning of applicable securities laws and regulations. These forward-looking statements can generally be identified by the use of words such as "outlook," "guidance," "anticipate," "enable," "expect," "believe," "could," "confident," "estimate," "feel," "forecast," "intend," "may," "on track," "plan," "positioned," "potential," "project," "should," "target," "will," "would," and similar words. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. These statements are based on the current expectations of our management, are not predictions of actual performance, and actual results may differ materially.

Forward-looking statements are subject to a number of risks and uncertainties, including the factors disclosed in our Annual Report on Form 10-K and subsequent filings with the SEC. Our actual financial performance could differ materially from those projected in the forward-looking statements due to a variety of factors, including the inherent uncertainty of estimates, forecasts and projections, global economic uncertainty or economic downturns, tariffs or the imposition of new tariffs, trade wars, barriers or restrictions, or threats of such actions and related uncertainty, and the possibility that we are unable to successfully integrate GHOST Lifestyle LLC ("GHOST") into our business, and our financial performance may be better or worse than anticipated. We are under no obligation to update, modify or withdraw any forward-looking statements, except as required by applicable law.

NON-GAAP FINANCIAL MEASURES

This release includes certain non-GAAP financial measures, which differ from results using U.S. Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures should be considered as supplements to and should not be considered replacements for, or superior to, the GAAP measures.  These measures may differ from similarly titled non-GAAP financial measures presented by other companies, and other companies may not define the non-GAAP financial measure in the same way. Non-GAAP financial measures typically exclude certain charges, including one-time costs that are not expected to occur routinely in future periods, described by the Company as "items affecting comparability". Refer to page A-5 for the Company's description of items affecting comparability for each period presented. The Company uses non-GAAP financial measures to evaluate our operating and financial performance and to compare such performance to that of prior periods and to the performance of our competitors. Additionally, we use non-GAAP financial measures in making operational and financial decisions and in our budgeting and planning process. We believe that providing non-GAAP financial measures to investors helps investors evaluate our operating performance, profitability and business trends in a way that is consistent with how management evaluates such performance.

Adjusted gross profit. Adjusted gross profit is defined as Net sales less Cost of sales, as adjusted for items affecting comparability as described on page A-5. Management believes that Adjusted gross profit is useful for investors in evaluating the Company's operating results and understanding the Company's operating trends by adjusting certain items that can vary significantly depending on specific underlying transactions or events, thereby affecting comparability.

Adjusted operating income. Adjusted operating income is defined as Income from operations, as adjusted for items affecting comparability as described on page A-5. Management believes that Adjusted operating income is useful for investors in evaluating the Company's operating results and understanding the Company's operating trends by adjusting certain items that can vary significantly depending on specific underlying transactions or events, thereby affecting comparability.

Adjusted net income. Adjusted net income is defined as Net income, as adjusted for items affecting comparability as described on page A-5. Management believes that Adjusted net income is useful for investors in evaluating the Company's operating results and understanding the Company's operating trends by adjusting certain items that can vary significantly depending on specific underlying transactions or events, thereby affecting comparability.

Adjusted diluted EPS. Adjusted diluted EPS is defined as Diluted EPS, as adjusted for items affecting comparability as described on page A-5. Management believes that Adjusted diluted EPS is useful for investors in providing period-to-period comparisons of the results of our operations since it adjusts for certain items affecting overall comparability.

Adjusted gross margin. Adjusted gross margin is defined as Adjusted gross profit divided by Net sales. Management believes that Adjusted gross margin is useful for investors as supplemental measures to evaluate our operating performance and ability to manage ongoing costs.

Adjusted operating margin. Adjusted operating margin is defined as Adjusted Income from operations divided by Net sales. Management believes that Adjusted operating margin is useful for investors as supplemental measures to evaluate our operating performance and ability to manage ongoing costs.

Adjusted interest expense. Adjusted interest expense is defined as Interest expense, net, as adjusted for items affecting comparability as described on page A-5. Management believes that Adjusted interest expense is useful for investors in evaluating our performance and establishing expectations for the impacts of interest expenses.

Adjusted EBITDA. Adjusted EBITDA is defined as EBITDA, as adjusted for items affecting comparability as described on page A-5. EBITDA is defined as Net income as adjusted for interest expense, net; provision for income taxes; depreciation expense; amortization of intangibles; and other amortization. Management believes that Adjusted EBITDA is useful for investors in evaluating the Company's operating results and understanding the Company's operating trends by adjusting certain items that can vary significantly depending on specific underlying transactions or events, thereby affecting comparability.

Management leverage ratio. Management leverage ratio is defined as KDP's total principal amounts of debt less cash and cash equivalents, divided by Adjusted EBITDA. Management believes that the Management leverage ratio is useful for investors in evaluating the Company's liquidity and assessing the Company's ability to meet its financial obligations.

Free cash flow. Free cash flow is defined as net cash provided by operating activities adjusted for purchases of property, plant and equipment, proceeds from sales of property, plant and equipment, and certain items excluded for comparison to prior year periods. Management uses this measure to evaluate the company's performance and make resource allocation decisions.

Financial measures presented on a constant currency basis. Defined as certain financial statement captions and metrics adjusted for certain items affecting comparability, calculated on a constant currency basis by converting our current period local currency financial results using the prior period foreign currency exchange rates. Because our reporting currency is the U.S. Dollar, the value of financial measures presented in U.S. Dollar will be affected by changes in currency exchange rates. Therefore, we present certain financial measures on a constant currency basis for greater comparability.

 

KEURIG DR PEPPER INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
	Second Quarter				First Six Months
(in millions, except per share data)	2025		2024		2025		2024
Net sales	$         4,163		$         3,922		$         7,798		$         7,390
Cost of sales	1,908		1,750		3,558		3,278
Gross profit	2,255		2,172		4,240		4,112
Selling, general, and administrative expenses	1,356		1,295		2,548		2,471
Other operating expense (income), net	1		16		(7)		15
Income from operations	898		861		1,699		1,626
Interest expense, net	180		204		328		382
Other income, net	—		(15)		(7)		(22)
Income before provision for income taxes	718		672		1,378		1,266
Provision for income taxes	171		157		314		297
Net income	$            547		$            515		$         1,064		$            969
Earnings per common share:
Basic	$           0.40		$           0.38		$           0.78		$           0.71
Diluted	0.40		0.38		0.78		0.70
Weighted average common shares outstanding:
Basic	1,358.3		1,355.6		1,357.7		1,368.2
Diluted	1,362.8		1,361.2		1,362.6		1,374.4

 

KEURIG DR PEPPER INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
	June 30,		December 31,
(in millions, except share and per share data)	2025		2024
Assets
Current assets:
Cash and cash equivalents	$                509		$                510
Restricted cash and restricted cash equivalents	56		80
Trade accounts receivable, net	1,498		1,502
Inventories	1,741		1,299
Prepaid expenses and other current assets	802		606
Total current assets	4,606		3,997
Property, plant, and equipment, net	2,996		2,964
Investments in unconsolidated affiliates	1,566		1,543
Goodwill	20,228		20,053
Other intangible assets, net	23,841		23,634
Other non-current assets	1,095		1,200
Deferred tax assets	36		39
Total assets	$           54,368		$           53,430
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$             3,113		$             2,985
Accrued expenses	1,324		1,584
Structured payables	31		41
Short-term borrowings and current portion of long-term obligations	1,976		2,642
Other current liabilities	777		835
Total current liabilities	7,221		8,087
Long-term obligations	13,920		12,912
Deferred tax liabilities	5,487		5,435
Other non-current liabilities	2,755		2,753
Total liabilities	29,383		29,187
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value, 15,000,000 shares authorized, no shares issued	—		—
Common stock, $0.01 par value, 2,000,000,000 shares authorized, 1,358,413,413 and 1,356,664,609 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively	14		14
Additional paid-in capital	19,729		19,712
Retained earnings	5,232		4,793
Accumulated other comprehensive income (loss)	10		(276)
Total stockholders' equity	24,985		24,243
Total liabilities and stockholders' equity	$           54,368		$           53,430

 

KEURIG DR PEPPER INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
	First Six Months
(in millions)	2025		2024
Operating activities:
Net income	$               1,064		$                  969
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense	217		207
Amortization of intangibles	68		67
Other amortization expense	63		101
Provision for sales returns	24		29
Deferred income taxes	4		17
Employee stock-based compensation expense	45		52
(Gain) loss on disposal of property, plant, and equipment	(6)		18
Unrealized (gain) loss on foreign currency	(6)		16
Unrealized (gain) loss on derivatives	(56)		36
Equity in earnings of unconsolidated affiliates	(27)		(17)
Earned equity from distribution arrangements	(10)		(45)
Other, net	(5)		5
Changes in assets and liabilities, excluding the effects of business acquisitions:
Trade accounts receivable	3		(67)
Inventories	(416)		(119)
Income taxes receivable and payables, net	(86)		(34)
Other current and non-current assets	(136)		(180)
Accounts payable and accrued expenses	(93)		(314)
Other current and non-current liabilities	(7)		1
Net change in operating assets and liabilities	(735)		(713)
Net cash provided by operating activities	640		742
Investing activities:
Acquisitions of businesses, net of cash acquired	(111)		—
Purchases of property, plant, and equipment	(226)		(273)
Proceeds from sales of property, plant, and equipment	13		1
Purchases of intangibles	(16)		(49)
Investments in unconsolidated affiliates	(1)		(7)
Other, net	63		(1)
Net cash used in investing activities	(278)		(329)
Financing activities:
Proceeds from issuance of Notes	2,000		3,000
Repayments of Notes	(529)		(1,150)
Net repayment of commercial paper	(139)		(226)
Repayment of term loan	(990)		—
Proceeds from structured payables	16		31
Repayments of structured payables	(26)		(60)
Cash dividends paid	(625)		(591)
Repurchases of common stock, inclusive of excise tax obligation	(9)		(1,105)
Tax withholdings related to net share settlements	(28)		(43)
Payments on finance leases	(63)		(56)
Other, net	(16)		(22)
Net cash used in financing activities	(409)		(222)
Cash, cash equivalents, restricted cash, and restricted cash equivalents:
Net change from operating, investing, and financing activities	(47)		191
Effect of exchange rate changes	4		(20)
Beginning balance	608		267
Ending balance	$                  565		$                  438

 

KEURIG DR PEPPER INC.
RECONCILIATION OF SEGMENT INFORMATION
(UNAUDITED)
	Second Quarter				First Six Months
(in millions)	2025		2024		2025		2024
Net Sales
U.S. Refreshment Beverages	$            2,660		$            2,407		$            4,983		$            4,500
U.S. Coffee	948		950		1,825		1,861
International	555		565		990		1,029
Total net sales	$            4,163		$            3,922		$            7,798		$            7,390
Income from Operations
U.S. Refreshment Beverages	$              746		$              717		$            1,400		$            1,332
U.S. Coffee	233		228		435		476
International	143		150		233		262
Unallocated corporate costs	(224)		(234)		(369)		(444)
Total income from operations	$              898		$              861		$            1,699		$            1,626

KEURIG DR PEPPER INC.
RECONCILIATION OF GAAP TO NON-GAAP INFORMATION
CERTAIN LINE ITEMS - CONSOLIDATED
(UNAUDITED)

The Company reports its financial results in accordance with U.S. GAAP. However, management believes that certain non-GAAP financial measures that reflect the way management evaluates the business may provide investors with additional information regarding the Company's results, trends and ongoing performance on a comparable basis.

Specifically, investors should consider the following with respect to our financial results:

Adjusted: Defined as certain financial statement captions and metrics adjusted for certain items affecting comparability.

Items affecting comparability: Defined as certain items that are excluded for comparison to prior year periods, adjusted for the tax impact as applicable. Tax impact is determined based upon an approximate rate for each item. For each period, management adjusts for (i) the unrealized mark-to-market impact of derivative instruments not designated as hedges in accordance with U.S. GAAP that do not have an offsetting risk reflected within the financial results, as well as the unrealized mark-to-market impact of our Vita Coco investment prior to its sale in the first quarter of 2025; (ii) the amortization associated with definite-lived intangible assets; (iii) the amortization of the deferred financing costs associated with the DPS Merger; (iv) the amortization of the fair value adjustment of the senior unsecured notes obtained as a result of the DPS Merger; (v) stock compensation expense and the associated windfall tax benefit attributable to the matching awards made to employees who made an initial investment in KDP; (vi) transaction costs for significant business combinations (completed or abandoned); and (vii) other certain items that are excluded for comparison purposes to prior year periods.

For the first six months of 2025, the other certain items excluded for comparison purposes include (i) productivity expenses; (ii) restructuring adjustments associated with the 2023 CEO Succession and Associated Realignment; (iii) costs related to significant non-routine legal matters, including the antitrust litigation; (iv) restructuring expenses associated with the Network Optimization program; (v) the impact of the step-up of acquired inventory associated with the GHOST and Dyla acquisitions; (vi) integration expenses associated with the GHOST and Dyla acquisitions; (vii) the change in our mandatory redemption liability for GHOST; and (viii) non-cash changes in deferred tax liabilities related to goodwill and other intangible assets as a result of tax rate or apportionment changes.

For the first six months of 2024, the other certain items excluded for comparison purposes include (i) productivity expenses; (ii) restructuring expenses associated with the 2023 CEO Succession and Associated Realignment; (iii) costs related to significant non-routine legal matters, including the antitrust litigation; and (iv) restructuring expenses associated with the Network Optimization program.

Constant currency adjusted: Defined as certain financial statement captions and metrics adjusted for certain items affecting comparability, calculated on a constant currency basis by converting our current period local currency financial results using the prior period foreign currency exchange rates.

For the second quarter and first six months of 2025 and 2024, the supplemental financial data set forth below includes reconciliations of adjusted and constant currency adjusted financial measures to the applicable financial measure presented in the unaudited condensed consolidated financial statements for the same period.

KEURIG DR PEPPER INC.
RECONCILIATION OF GAAP TO NON-GAAP INFORMATION
CERTAIN LINE ITEMS - CONSOLIDATED
(UNAUDITED)
(in millions, except %)	Gross profit		Gross margin		Income from operations		Operating margin
Second Quarter of 2025
Reported	$            2,255		54.2 %		$               898		21.6 %
Items Affecting Comparability:
Productivity	35				47
Mark to market	(4)				(6)
Amortization of intangibles	—				34
Stock compensation	—				4
Non-routine legal matters	—				5
Transaction costs	—				5
Restructuring - 2023 CEO Succession and Associated Realignment	—				1
Restructuring - Network Optimization	—				10
Integration of acquisitions	1				28
Inventory step-up	2				2
Adjusted	$            2,289		55.0 %		$            1,028		24.7 %
Impact of foreign currency			— %				— %
Constant currency adjusted			55.0 %				24.7 %
Second Quarter of 2024
Reported	$            2,172		55.4 %		$               861		22.0 %
Items Affecting Comparability:
Productivity	20				45
Mark to market	6				(5)
Amortization of intangibles	—				34
Stock compensation	—				3
Non-routine legal matters	—				1
Transaction costs	—				1
Restructuring - 2023 CEO Succession and Associated Realignment	—				11
Restructuring - Network Optimization	2				19
Adjusted	$            2,200		56.1 %		$               970		24.7 %

Refer to pages A-9 and A-10 for reconciliations of reported net sales to constant currency net sales and adjusted income from operations to constant currency adjusted income from operations.

 

KEURIG DR PEPPER INC.
RECONCILIATION OF GAAP TO NON-GAAP INFORMATION
CERTAIN LINE ITEMS - CONSOLIDATED
(UNAUDITED)
(in millions, except % and per share data)	Interest expense, net		Income before provision for income taxes		Provision for income taxes		Effective tax rate		Net income		Diluted earnings per share
Second Quarter of 2025
Reported	$     180		$                       718		$                  171		23.8 %		$      547		$             0.40
Items Affecting Comparability:
Productivity	—		47		12				35		0.03
Mark to market	(2)		(4)		(3)				(1)		—
Amortization of intangibles	—		34		10				24		0.02
Stock compensation	—		4		2				2		—
Amortization of fair value debt adjustment	(4)		4		1				3		—
Amortization of deferred financing costs	(1)		1		—				1		—
Non-routine legal matters	—		5		2				3		—
Transaction costs	—		5		1				4		—
Restructuring - 2023 CEO Succession and Associated Realignment	—		1		—				1		—
Restructuring - Network Optimization	—		10		3				7		0.01
Integration of acquisitions	—		28		6				22		0.02
Change in mandatory redemption liability for GHOST	—		29		8				21		0.02
Inventory step-up	—		2		2				—		—
Change in deferred tax liabilities related to goodwill and other intangible assets	—		—		(4)				4		—
Adjusted	$     173		$                       884		$                  211		23.9 %		$      673		$             0.49
Impact of foreign currency							(0.2) %
Constant currency adjusted							23.7 %
Second Quarter of 2024
Reported	$     204		$                       672		$                  157		23.4 %		$      515		$             0.38
Items Affecting Comparability:
Productivity	—		45		10				35		0.03
Mark to market	(32)		22		4				18		0.01
Amortization of intangibles	—		34		8				26		0.02
Stock compensation	—		3		1				2		—
Amortization of fair value of debt adjustment	(3)		3		—				3		—
Amortization of deferred financing costs	(1)		1		—				1		—
Non-routine legal matters	—		1		1				—		—
Transaction costs	—		1		1				—		—
Restructuring - 2023 CEO Succession and Associated Realignment	—		11		2				9		0.01
Restructuring - Network Optimization	—		19		4				15		0.01
Change in deferred tax liabilities related to goodwill and other intangible assets	—		—		6				(6)		—
Adjusted	$     168		$                       812		$                  194		23.9 %		$      618		$             0.45
Change - adjusted	3.0 %								8.9 %		8.9 %
Impact of foreign currency	(0.6) %								1.6 %		2.2 %
Change - constant currency adjusted	2.4 %								10.5 %		11.1 %

Diluted earnings per common share may not foot due to rounding.

 

KEURIG DR PEPPER INC.
RECONCILIATION OF GAAP TO NON-GAAP INFORMATION
INCOME FROM OPERATIONS - CONSOLIDATED AND SEGMENTS
(UNAUDITED)
(in millions, except %)	U.S. Refreshment Beverages		U.S. Coffee		International		Unallocated corporate costs		Total
Second Quarter of 2025
Reported - Income from Operations	$                    746		$                   233		$                   143		$                  (224)		$                   898
Items Affecting Comparability:
Productivity	—		35		—		12		47
Mark to market	—		—		—		(6)		(6)
Amortization of intangibles	9		23		2		—		34
Stock compensation	—		—		—		4		4
Non-routine legal matters	—		—		—		5		5
Transaction costs	—		—		—		5		5
Restructuring - 2023 CEO Succession and Associated Realignment	—		—		—		1		1
Restructuring - Network Optimization	1		8		—		1		10
Integration of acquisitions	23		—		—		5		28
Inventory step-up	2		—		—		—		2
Adjusted - Income from Operations	$                    781		$                   299		$                   145		$                  (197)		$                1,028
Second Quarter of 2024
Reported - Income from Operations	$                    717		$                   228		$                   150		$                  (234)		$                   861
Items Affecting Comparability:
Productivity	1		20		—		24		45
Mark to market	—		—		(1)		(4)		(5)
Amortization of intangibles	5		26		3		—		34
Stock compensation	—		—		—		3		3
Non-routine legal matters	—		—		—		1		1
Transaction costs	—		—		—		1		1
Restructuring - 2023 CEO Succession and Associated Realignment	—		—		—		11		11
Restructuring - Network Optimization	—		19		—		—		19
Adjusted - Income from Operations	$                    723		$                   293		$                   152		$                  (198)		$                   970
Change - adjusted	8.0 %		2.0 %		(4.6) %		(0.5) %		6.0 %
Impact of foreign currency	— %		— %		7.2 %		0.5 %		1.0 %
Change - constant currency adjusted	8.0 %		2.0 %		2.6 %		— %		7.0 %

 

KEURIG DR PEPPER INC.
RECONCILIATION OF GAAP TO NON-GAAP INFORMATION
CHANGE IN NET SALES AND OPERATING MARGIN - CONSOLIDATED AND SEGMENTS
(UNAUDITED)
		Reported		Impact of Foreign Currency		Constant Currency
Second Quarter of 2025
Change in net sales
U.S. Refreshment Beverages		10.5 %		— %		10.5 %
U.S. Coffee		(0.2)		—		(0.2)
International		(1.8)		7.5		5.7
Total change in net sales		6.1		1.1		7.2

 

		Reported		Items Affecting Comparability		Adjusted		Impact of Foreign Currency		Constant Currency Adjusted
Second Quarter of 2025
Operating margin
U.S. Refreshment Beverages		28.0 %		1.4 %		29.4 %		— %		29.4 %
U.S. Coffee		24.6		6.9		31.5		—		31.5
International		25.8		0.3		26.1		—		26.1
Total operating margin		21.6		3.1		24.7		—		24.7

 

		Reported		Items Affecting Comparability		Adjusted
Second Quarter of 2024
Operating margin
U.S. Refreshment Beverages		29.8 %		0.2 %		30.0 %
U.S. Coffee		24.0		6.8		30.8
International		26.5		0.4		26.9
Total operating margin		22.0		2.7		24.7

 

KEURIG DR PEPPER INC.
RECONCILIATION OF GAAP TO NON-GAAP INFORMATION
CERTAIN LINE ITEMS - CONSOLIDATED
(UNAUDITED)
(in millions, except %)	Gross profit		Gross margin		Income from operations		Operating margin
First Six Months of 2025
Reported	$            4,240		54.4 %		$        1,699		21.8 %
Items Affecting Comparability:
Productivity	60				79
Mark to market	(43)				(49)
Amortization of intangibles	—				68
Stock compensation	—				6
Non-routine legal matters	—				8
Transaction costs	—				4
Restructuring - Network Optimization	1				12
Integration of acquisitions	1				31
Inventory step-up	17				17
Adjusted	$            4,276		54.8 %		$        1,875		24.0 %
Impact of foreign currency			— %				— %
Constant currency adjusted			54.8 %				24.0 %
First Six Months of 2024
Reported	$            4,112		55.6 %		$        1,626		22.0 %
Items Affecting Comparability:
Productivity	34				81
Mark to market	3				(24)
Amortization of intangibles	—				67
Stock compensation	—				7
Non-routine legal matters	—				2
Transaction costs	—				2
Restructuring - 2023 CEO Succession and Associated Realignment	—				13
Restructuring - Network Optimization	2				21
Adjusted	$            4,151		56.2 %		$        1,795		24.3 %

Refer to pages A-13 and A-14 for reconciliations of reported net sales to constant currency net sales and adjusted income from operations to constant currency adjusted income from operations.

 

KEURIG DR PEPPER INC.
RECONCILIATION OF GAAP TO NON-GAAP INFORMATION
CERTAIN LINE ITEMS - CONSOLIDATED
(UNAUDITED)
(in millions, except % and per share data)	Interest expense, net		Income before provision for income taxes		Provision for income taxes		Effective tax rate		Net income		Diluted earnings per share
First Six Months of 2025
Reported	$               328		$                    1,378		$                  314		22.8 %		$       1,064		$              0.78
Items Affecting Comparability:
Productivity	—		79		18				61		0.04
Mark to market	21		(38)		(4)				(34)		(0.03)
Amortization of intangibles	—		68		16				52		0.04
Stock compensation	—		6		2				4		—
Amortization of fair value debt adjustment	(8)		8		2				6		—
Amortization of deferred financing costs	(1)		1		—				1		—
Non-routine legal matters	—		8		2				6		—
Transaction costs	—		4		1				3		—
Restructuring - Network Optimization	—		12		3				9		0.01
Integration of acquisitions	—		31		7				24		0.02
Change in mandatory redemption liability for GHOST	—		40		10				30		0.02
Inventory step-up	—		17		4				13		0.01
Change in deferred tax liabilities related to goodwill and other intangible assets	—		—		(2)				2		—
Adjusted	$               340		$                    1,614		$                  373		23.1 %		$       1,241		$              0.91
Impact of foreign currency							(0.1) %
Constant currency adjusted							23.0 %
First Six Months of 2024
Reported	$               382		$                    1,266		$                  297		23.5 %		$          969		$              0.70
Items Affecting Comparability:
Productivity	—		81		20				61		0.04
Mark to market	(67)		40		6				34		0.02
Amortization of intangibles	—		67		17				50		0.04
Stock compensation	—		7		2				5		—
Amortization of fair value of debt adjustment	(7)		7		1				6		—
Amortization of deferred financing costs	(1)		1		—				1		—
Non-routine legal matters	—		2		1				1		—
Transaction costs	—		2		1				1		—
Restructuring - 2023 CEO Succession and Associated Realignment	—		13		3				10		0.01
Restructuring - Network Optimization	—		21		5				16		0.01
Change in deferred tax liabilities related to goodwill and other intangible assets	—		—		6				(6)		—
Adjusted	$               307		$                    1,507		$                  359		23.8 %		$       1,148		$              0.84
Change - adjusted	10.7 %								8.1 %		8.3 %
Impact of foreign currency	(0.3) %								1.5 %		1.2 %
Change - Constant currency adjusted	10.4 %								9.6 %		9.5 %

Diluted earnings per common share may not foot due to rounding.

 

KEURIG DR PEPPER INC.
RECONCILIATION OF GAAP TO NON-GAAP INFORMATION
INCOME FROM OPERATIONS - CONSOLIDATED AND SEGMENTS
(UNAUDITED)
(in millions, except %)	U.S. Refreshment Beverages		U.S. Coffee		International		Unallocated corporate costs		Total
First Six Months of 2025
Reported - Income from Operations	$                 1,400		$                   435		$                   233		$                  (369)		$                1,699
Items Affecting Comparability:
Productivity	—		60		—		19		79
Mark to market	—		—		—		(49)		(49)
Amortization of intangibles	16		47		5		—		68
Stock compensation	—		—		—		6		6
Non-routine legal matters	—		—		—		8		8
Transaction costs	—		—		—		4		4
Restructuring - Network Optimization	1		10		—		1		12
Integration of acquisitions	23		—		—		8		31
Inventory step-up	17		—		—		—		17
Adjusted - Income from Operations	$                 1,457		$                   552		$                   238		$                  (372)		$                1,875
First Six Months of 2024
Reported - Income from Operations	$                 1,332		$                   476		$                   262		$                  (444)		$                1,626
Items Affecting Comparability:
Productivity	3		34		—		44		81
Mark to market	—		—		(7)		(17)		(24)
Amortization of intangibles	10		51		6		—		67
Stock compensation	—		—		—		7		7
Non-routine legal matters	—		—		—		2		2
Transaction costs	—		—		—		2		2
Restructuring - 2023 CEO Succession and Associated Realignment	—		—		—		13		13
Restructuring - Network Optimization	—		21		—		—		21
Adjusted - Income from Operations	$                 1,345		$                   582		$                   261		$                  (393)		$                1,795
Change - adjusted	8.3 %		(5.2) %		(8.8) %		(5.3) %		4.5 %
Impact of foreign currency	— %		— %		8.4 %		0.5 %		1.1 %
Change - constant currency adjusted	8.3 %		(5.2) %		(0.4) %		(4.8) %		5.6 %

 

KEURIG DR PEPPER INC.
RECONCILIATION OF GAAP TO NON-GAAP INFORMATION
CHANGE IN NET SALES AND OPERATING MARGIN - CONSOLIDATED AND SEGMENTS
(UNAUDITED)
		Reported		Impact of Foreign Currency		Constant Currency
First Six Months of 2025
Change in net sales
U.S. Refreshment Beverages		10.7 %		— %		10.7 %
U.S. Coffee		(1.9)		—		(1.9)
International		(3.8)		9.3		5.5
Total change in net sales		5.5		1.3		6.8

 

		Reported			Items Affecting Comparability			Adjusted			Impact of Foreign Currency				Constant Currency Adjusted
First Six Months of 2025
Operating margin
U.S. Refreshment Beverages		28.1 %		1.1 %			29.2 %					— %				29.2 %
U.S. Coffee		23.8		6.4			30.2					—				30.2
International		23.5		0.5			24.0					(0.1)				23.9
Total operating margin		21.8		2.2			24.0					—				24.0

 

		Reported		Items Affecting Comparability		Adjusted
First Six Months of 2024
Operating margin
U.S. Refreshment Beverages		29.6 %		0.3 %		29.9 %
U.S. Coffee		25.6		5.7		31.3
International		25.5		(0.1)		25.4
Total operating margin		22.0		2.3		24.3

 

KEURIG DR PEPPER INC.
RECONCILIATION OF GAAP TO NON-GAAP INFORMATION
ADJUSTED EBITDA AND MANAGEMENT LEVERAGE RATIO
(UNAUDITED)
(in millions, except for ratio)	Last Twelve Months
Net income	$                  1,536
Interest expense, net	681
Provision for income taxes	490
Depreciation expense	432
Other amortization	140
Amortization of intangibles	134
EBITDA	$                  3,413
Items affecting comparability:
Productivity	$                     114
Mark to market	(7)
Stock compensation	13
Non-routine legal matters	16
Transaction costs	42
Restructuring - 2023 CEO Succession and Associated Realignment	27
Restructuring - Network Optimization	42
Integration of acquisitions	32
Change in mandatory redemption liability for GHOST	40
Termination fees for distribution rights related to GHOST	225
Inventory step-up	21
Impairment of goodwill and other intangible assets	718
Impairment of investments and note receivable	2
Adjusted EBITDA	$                  4,698
	June 30,
	2025
Principal amounts of:
Commercial paper notes	$                  1,477
Senior unsecured notes	14,564
Total principal amounts	16,041
Less: Cash and cash equivalents	509
Total principal amounts less cash and cash equivalents	$                15,532
June 30, 2025 Management Leverage Ratio	3.3

 

KEURIG DR PEPPER INC.
RECONCILIATION OF GAAP TO NON-GAAP INFORMATION
ADJUSTED EBITDA - LAST TWELVE MONTHS
(UNAUDITED)
(in millions)	Third Quarter of 2024		Fourth Quarter of 2024		First Six Months of 2025		Last Twelve Months
Net income (loss)	$               616		$             (144)		$            1,064		$            1,536
Interest expense, net	106		247		328		681
Provision (benefit) for income taxes	186		(10)		314		490
Depreciation expense	103		112		217		432
Other amortization	39		38		63		140
Amortization of intangibles	33		33		68		134
EBITDA	$            1,083		$               276		$            2,054		$            3,413
Items affecting comparability:
Productivity	$                 23		$                 26		$                 65		$               114
Mark to market	33		(23)		(17)		(7)
Stock compensation	4		3		6		13
Non-routine legal matters	3		5		8		16
Transaction costs	13		25		4		42
Restructuring - 2023 CEO Succession and Associated Realignment	3		24		—		27
Restructuring - Network Optimization	24		6		12		42
Integration of acquisitions	—		1		31		32
Change in mandatory redemption liability for GHOST	—		—		40		40
Termination fees for distribution rights related to GHOST	—		225		—		225
Inventory step-up	4		—		17		21
Impairment of goodwill and other intangible assets	—		718		—		718
Impairment of investments and note receivable	—		2		—		2
Adjusted EBITDA	$            1,190		$            1,288		$            2,220		$            4,698

KEURIG DR PEPPER INC.
RECONCILIATION OF GAAP TO NON-GAAP INFORMATION 
FREE CASH FLOW
(UNAUDITED)

Free cash flow is defined as net cash provided by operating activities adjusted for purchases of property, plant, and equipment, proceeds from sales of property, plant, and equipment, and certain items excluded for comparison to prior year periods. For the first six months of 2025 and 2024, there were no certain items excluded for comparison to prior year periods.

		First Six Months
(in millions)		2025		2024
Net cash provided by operating activities		$               640		$               742
Purchases of property, plant, and equipment		(226)		(273)
Proceeds from sales of property, plant, and equipment		13		1
Free Cash Flow		$               427		$               470

 

 

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SOURCE Keurig Dr Pepper

FAQ

What were Keurig Dr Pepper's (KDP) Q2 2025 earnings results?

KDP reported Q2 2025 net sales of $4.2 billion (up 6.1%) and adjusted diluted EPS of $0.49 (up 11.1%). Operating cash flow was $431 million with free cash flow of $325 million.

How did KDP's different segments perform in Q2 2025?

U.S. Refreshment Beverages grew 10.5%, U.S. Coffee declined 0.2%, and International segment achieved 5.7% constant currency growth.

What is Keurig Dr Pepper's guidance for 2025?

KDP reaffirmed its 2025 guidance for mid-single-digit constant currency net sales growth and high-single-digit adjusted diluted EPS growth.

How did KDP's volume and pricing contribute to Q2 2025 growth?

Growth was driven by 5.0% volume/mix increase and 2.2% favorable net price realization, with GHOST acquisition contributing 4.0 percentage points to volume/mix growth.

What were KDP's operating income results for Q2 2025?

Adjusted operating income increased 7.0% to $1,028 million, representing 24.7% of net sales, driven by sales growth and productivity savings.