01—Abstract
Summary
Summary of the 10-K filed February 24, 2026. Cited figures are marked; the original filing is the authoritative source.
Keurig Dr Pepper Inc. (KDP) reported net sales of $16.60 billiona for the year ended December 31, 2025, up 8.2% from $15.35 billion, with net income of $2.08 billion (diluted EPS $1.53, up from $1.05).
Income from operations rose 38.0% to $3.58 billionb, aided by the absence of the prior year's $306 million goodwill impairment and lower indefinite-lived brand impairments ($78 million versus $412 million). Growth was led by U.S. Refreshment Beverages, where net sales rose 11.9% to $10.44 billion, including the GHOST acquisition, while U.S. Coffee sales rose only 0.6% as appliance volume fell 19.9% and K-Cup pod volume fell 4.8%. The dominant strategic item is the proposed JDE Peet's Acquisition, for which KDP commenced a tender offer on January 16, 2026 at €31.85 per share, with closing expected early in the second quarter of 2026.
It is financed through bridge and delayed-draw term loans (€5.85 billion and €10.35 billion facilities, respectively, both undrawn at year-end), a $4 billionc minority investment by JV investors in a Pod Manufacturing JV for a 49% interest, and $4.5 billion of Convertible Preferred Stock. KDP also intends to separate its beverage and coffee businesses into two public companies after the acquisition closes. Moody's (Baa1) and S&P (BBB) have placed KDP ratings under review or on watch negative for potential downgrade.
Balance sheet and cash flow highlights: total assets were $55.46 billiond, with goodwill of $20.25 billion and intangible assets of $23.73 billion. Net cash provided by operating activities was $1.99 billion, down from $2.22 billion, and cash dividends paid were $1.25 billion.
Commercial paper stood at $2.21 billion and Notes at $13.93 billion carrying value. Walmart accounted for approximately 16% of consolidated net sales.
02—Key points
Key Highlights
- Net sales rose 8.2% to $16.60 billion; net income increased 44.3% to $2.08 billion, and diluted EPS was $1.53 versus $1.05.
- Income from operations increased 38.0% to $3.58 billion, benefiting from lower non-cash impairments ($78 million in 2025 versus $718 million in 2024 across goodwill and intangibles).
- U.S. Refreshment Beverages drove growth with net sales up 11.9% to $10.44 billion and operating income up 56.5% to $2.94 billion; GHOST contributed 6.2 percentage points to segment volume/mix growth.
- U.S. Coffee was weaker, with net sales up only 0.6% to $3.99 billion, operating income down 10.8%, and appliance volume down 19.9%.
- Pending JDE Peet's Acquisition at €31.85 per share is expected to close early in Q2 2026, with the Separation of beverage and coffee businesses to follow.
- Financing for the JDE Peet's deal includes a $4 billion JV investment for a 49% interest in the Pod Manufacturing JV and $4.5 billion of Convertible Preferred Stock at 4.75% dividends.
- Credit ratings are under review: Moody's Baa1 is under review for downgrade and S&P BBB is on CreditWatch Negative, which could raise borrowing costs.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2025, Keurig Dr Pepper kept $0.13.
- Revenue$16.60B100.0%
- Cost of revenue−$7.60B45.8%
- Gross profit$9.00B54.2%
- Operating costs−$5.42B32.7%
- Operating income$3.58B21.5%
- Interest, other & tax−$1.50B9.0%
- Net income$2.08B12.5%
Where FY2025 revenue went
$16.60B- Cost of revenue: $7.60B, 46% of revenue
- SG&A: $5.35B, 32% of revenue
- Net income: $2.08B, 13% of revenue
- R&D: $70.0M, 0.4% of revenue
- Interest, other & tax: $1.50B, 9.0% of revenue
Kept 13% as net incomeR&D $70.0M · 0.4%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2025filed February 24, 2026Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $16.60B$15.35B | +8.2% |
| Cost of Revenue | $7.60B$6.82B | +11.5% |
| Gross Profit | $9.00B$8.53B | +5.5% |
| R&D Expenses | $70.00M$70.00M | 0.0% |
| SG&A Expenses | $5.35B$5.01B | +6.7% |
| Operating Income | $3.58B$2.59B | +38.0% |
| Net Income | $2.08B$1.44B | +44.3% |
| EPS (Basic) | $1.53$1.06 | +44.3% |
| EPS (Diluted) | $1.53$1.05 | +45.7% |
| Shares Outstanding (Basic) | 1.36B1.36B | −0.3% |
| Shares Outstanding (Diluted) | 1.36B1.37B | −0.4% |
05—Questions
Frequently Asked Questions
How did KDP perform financially in 2025?
Net sales grew 8.2% to $16.60 billion, gross margin declined to 54.2% from 55.6%, and operating margin rose to 21.5% from 16.9%. Net income was $2.08 billion, or $1.53 per diluted share, compared with $1.05 in 2024, largely because of the absence of the prior year's goodwill impairment and lower brand impairments.
What is the status of the JDE Peet's Acquisition?
KDP entered into the agreement on August 24, 2025 and commenced a tender offer on January 16, 2026 at €31.85 per share in cash. Completion requires a minimum tender of at least 95% of shares, subject to reduction in certain circumstances, and the company expects closing early in the second quarter of 2026. Irrevocable undertakings from Acorn Holdings B.V. and certain JDE Peet's directors cover about 69% of shares.
How will the JDE Peet's deal be funded and how could it affect shareholders?
Funding includes bridge and delayed-draw term loan facilities, a $4 billion JV investment for a 49% interest in the Pod Manufacturing JV, and $4.5 billion of Convertible Preferred Stock with a 4.75% dividend and an initial conversion price of $37.25. The filing warns of increased leverage, dilution from conversion and possible future equity issuance, and preferred holders' voting rights and preemptive rights.
What are the main risks around credit ratings and the Separation?
Moody's has placed KDP's Baa1 rating under review for downgrade and S&P has placed its BBB rating on CreditWatch Negative, both as of August 25, 2025. A downgrade could increase interest expense. The filing states management intends each standalone business to achieve investment-grade ratings after the Separation, but there is no guarantee of achieving or maintaining them.
Are there material legal proceedings?
Keurig is defending antitrust litigation in the Multidistrict Antitrust Litigation in the Southern District of New York, with remaining plaintiffs collectively claiming approximately $1.5 billion of damages. The direct purchaser class certification was denied in October 2025 and plaintiffs have petitioned the Second Circuit. KDP strongly disputes the claims, has not accrued a loss contingency, and states it cannot predict the outcome.
06—Continue