01—Abstract
Summary
Summary of the 10-K filed February 25, 2025. Cited figures are marked; the original filing is the authoritative source.
Keurig Dr Pepper Inc. (KDP) reported net sales of $15,351 milliona for the year ended December 31, 2024, up $537 million, or 3.6%, from $14,814 million in 2023.
Net income fell 33.9% to $1,441 millionb from $2,181 million, and diluted EPS declined 32.3% to $1.05 from $1.55. The decline was driven by non-cash impairment charges of $306 million on goodwill (U.S. Warehouse Direct reporting unit) and $412 million on indefinite-lived brand intangibles (primarily Snapple), plus a $225 million termination fee payable to Anheuser-Busch InBev related to the GHOST distribution rights. Income from operations fell 18.8% to $2,591 million, while gross margin improved to 55.6% from 54.5%.
Segment results were mixed. U.S. Refreshment Beverages net sales grew 5.8% to $9,331 millionc, but its operating income fell 24.4% due to the impairments and the ABI fee. U.S. Coffee net sales declined 2.6% to $3,967 million, with income from operations down 6.8%.
The International segment grew net sales 6.8% to $2,053 milliond and operating income 14.7% to $545 million. Cash flow from operations rose to $2,219 million from $1,329 million, driven by working capital changes. Balance sheet and capital allocation changes were significant.
KDP acquired a 60% controlling interest in GHOST effective December 31, 2024, for an initial payment of $999 million funded primarily by a $990 million term loan, and agreed to buy the remaining 40% in 2028. Total debt-related obligations rose, with interest expense, net increasing 48.2% to $735 million. KDP repurchased $1,110 million of common stock and paid $1,194 million in dividends, with $1,810 million remaining under its share repurchase authorization.
02—Key points
Key Highlights
- Net sales rose 3.6% to $15,351 million, with volume/mix growth of 2.7% and net price realization of 1.2%.
- Net income declined 33.9% to $1,441 million, and diluted EPS fell to $1.05 from $1.55, largely due to non-cash impairments of $306 million (goodwill) and $412 million (brands, primarily Snapple).
- A $225 million termination payment to ABI for GHOST distribution rights was accrued in 2024 and is payable in Q1 2025.
- U.S. Refreshment Beverages sales grew 5.8%, but segment operating income fell 24.4% to $1,878 million; International operating income rose 14.7% to $545 million.
- Net cash from operating activities increased to $2,219 million from $1,329 million, driven by working capital changes.
- Interest expense, net rose 48.2% to $735 million, reflecting increased debt and higher financing costs.
- Returned capital through $1,110 million of share repurchases and $1,194 million of cash dividends paid; $1,810 million remains under the repurchase authorization.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Keurig Dr Pepper kept $0.09.
- Revenue$15.35B100.0%
- Cost of revenue−$6.82B44.4%
- Gross profit$8.53B55.6%
- Operating costs−$5.94B38.7%
- Operating income$2.59B16.9%
- Interest, other & tax−$1.15B7.5%
- Net income$1.44B9.4%
Where FY2024 revenue went
$15.35B- Cost of revenue: $6.82B, 44% of revenue
- SG&A: $5.01B, 33% of revenue
- Net income: $1.44B, 9.4% of revenue
- R&D: $70.0M, 0.5% of revenue
- Other operating costs: $855.0M, 5.6% of revenue
- Interest, other & tax: $1.15B, 7.5% of revenue
Kept 9.4% as net incomeR&D $70.0M · 0.5%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 25, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $15.35B$14.81B | +3.6% |
| Cost of Revenue | $6.82B$6.73B | +1.3% |
| Gross Profit | $8.53B$8.08B | +5.6% |
| R&D Expenses | $70.00M$66.00M | +6.1% |
| SG&A Expenses | $5.01B$4.91B | +2.1% |
| Operating Income | $2.59B$3.19B | −18.8% |
| Net Income | $1.44B$2.18B | −33.9% |
| EPS (Basic) | $1.06$1.56 | −32.1% |
| EPS (Diluted) | $1.05$1.55 | −32.3% |
| Shares Outstanding (Basic) | 1.36B1.40B | −2.7% |
| Shares Outstanding (Diluted) | 1.37B1.41B | −2.8% |
05—Questions
Frequently Asked Questions
Why did net income and EPS decline so sharply in 2024?
Net income fell 33.9% to $1,441 million, primarily because of non-cash impairment charges of $306 million on goodwill for the U.S. Warehouse Direct reporting unit and $412 million on indefinite-lived brand assets, led by Snapple. A $225 million accrued termination fee to ABI also weighed on results, and interest expense rose 48.2%.
What is the GHOST acquisition and how was it financed?
KDP acquired a 60% controlling interest in GHOST, a lifestyle sports nutrition business anchored by GHOST Energy, effective December 31, 2024, for an initial payment of $999 million. The payment was funded primarily by proceeds from the Term Loan Agreement. KDP also agreed to purchase the remaining 40% in 2028, and the mandatory redemption liability was recorded at a fair value of $689 million.
How did KDP's segments perform?
U.S. Refreshment Beverages net sales grew 5.8% to $9,331 million but operating income fell 24.4% to $1,878 million. U.S. Coffee net sales declined 2.6% to $3,967 million, with operating income down 6.8% to $1,079 million. International net sales rose 6.8% to $2,053 million and operating income rose 14.7% to $545 million.
How strong is KDP's liquidity and capital return program?
KDP reported cash and cash equivalents of $510 million at year-end and operating cash flow of $2,219 million. It repurchased $1,110 million of common stock and paid $1,194 million in dividends, and declared total dividends of $0.89 per share. Its Moody's and S&P long-term ratings are Baa1 and BBB, both with stable outlooks, and it reported compliance with all debt covenants.
What is the status of the antitrust litigation against Keurig?
Consolidated antitrust claims in the Multidistrict Antitrust Litigation allege monopolization of single serve brewer and pod markets, with plaintiffs collectively claiming more than $5 billion in damages. Discovery is concluded, and summary judgment motions are fully briefed. KDP strongly disputes the claims, has not accrued a loss contingency, and says it cannot predict the outcome.
06—Continue