01—Abstract
Summary
Summary of the 10-Q filed April 24, 2025. Cited figures are marked; the original filing is the authoritative source.
Keurig Dr Pepper Inc. reported first-quarter 2025 net sales of $3.64 billiona, up 4.8% from $3.47 billion in the prior-year quarter, with net income of $517 million, up 13.9%, and diluted EPS of $0.38, up 15.2% from $0.33.
Growth was led by U.S. Refreshment Beverages, where net sales rose 11.0% to $2,323 millionb, including a contribution from the GHOST acquisition. U.S. Coffee net sales declined 3.7% to $877 million and International net sales declined 6.3% to $435 million, with unfavorable FX translation in the International segment. Income from operations rose 4.7% to $801 million, while interest expense, net fell 16.9% to $148 million, largely due to a favorable change in unrealized mark-to-market activity.
Total debt-related obligations shifted during the quarter. Commercial paper rose to $2,972 millionc from $1,616 million, and the company repaid the first tranche of its Term Loan Agreement ($990 million at December 31, 2024). On March 31, 2025, KDP entered into a $4 billion revolving credit agreement maturing March 31, 2030, which replaced its previous revolving credit facility and had no amounts outstanding at quarter end.
Cash and cash equivalents increased to $653 milliond, and net cash provided by operating activities was $209 million compared with $85 million a year earlier. KDP did not repurchase any common stock during the quarter and had $1,810 million remaining under its share repurchase authorization, while paying cash dividends of $312 million.
The company also completed the GHOST Transactions, acquiring a 60% interest effective December 31, 2024 for $999 million and obtaining distribution rights effective March 3, 2025, and disclosed that JAB Holding Company's affiliate sold approximately 87 million shares in February 2025, leaving JAB with less than 10% ownership. Management reports that disclosure controls were effective as of March 31, 2025, and the company disclosed ongoing antitrust litigation related to Keurig with plaintiffs claiming more than $5 billion in damages, for which no loss accrual has been recorded.
02—Key points
Key Highlights
- Net sales of $3,635 million, up 4.8%, with volume/mix up 3.6% and net price realization up 2.8%, partly offset by FX down 1.6%
- Net income of $517 million, up 13.9%, and diluted EPS of $0.38 versus $0.33 a year earlier
- U.S. Refreshment Beverages net sales up 11.0% to $2,323 million, while U.S. Coffee net sales fell 3.7% to $877 million and International fell 6.3% to $435 million
- Interest expense, net decreased 16.9% to $148 million, primarily due to a favorable change in unrealized mark-to-market activity
- Net cash provided by operating activities of $209 million versus $85 million a year earlier; no common stock repurchased in the quarter
- New $4 billion revolving credit agreement entered March 31, 2025, maturing March 31, 2030, replacing the prior facility; commercial paper increased to $2,972 million
- Pending Keurig antitrust litigation with plaintiffs claiming more than $5 billion in damages; no loss accrual recorded
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2025, Keurig Dr Pepper kept $0.14.
- Revenue$3.63B100.0%
- Cost of revenue−$1.65B45.4%
- Gross profit$1.99B54.6%
- Operating costs−$1.18B32.6%
- Operating income$801.0M22.0%
- Interest, other & tax−$284.0M7.8%
- Net income$517.0M14.2%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed April 24, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $3.63B$3.47B | +4.8% |
| Cost of Revenue | $1.65B$1.53B | +8.0% |
| Gross Profit | $1.99B$1.94B | +2.3% |
| SG&A Expenses | $1.19B$1.18B | +1.4% |
| Operating Income | $801.00M$765.00M | +4.7% |
| Net Income | $517.00M$454.00M | +13.9% |
| EPS (Basic) | $0.38$0.33 | +15.2% |
| EPS (Diluted) | $0.38$0.33 | +15.2% |
| Shares Outstanding (Basic) | 1.36B1.38B | −1.7% |
| Shares Outstanding (Diluted) | 1.36B1.39B | −1.8% |
05—Questions
Frequently Asked Questions
How did KDP's core segments perform in the first quarter of 2025?
U.S. Refreshment Beverages was the strongest segment, with net sales up 11.0% to $2,323 million and income from operations up 6.3% to $654 million. U.S. Coffee net sales declined 3.7% to $877 million, and income from operations fell 18.5% to $202 million. International net sales declined 6.3% to $435 million, and income from operations fell 19.6% to $90 million, with unfavorable FX translation a factor.
What changed in KDP's debt and liquidity position?
Short-term borrowings and the current portion of long-term obligations rose to $3,999 million from $2,642 million, driven by commercial paper of $2,972 million. The $990 million Term Loan Agreement tranche was repaid on January 31, 2025 using commercial paper proceeds, leaving $250 million of a second tranche available and undrawn. KDP also entered a $4 billion revolving credit agreement on March 31, 2025 that matures in 2030 and had no borrowings outstanding at quarter end.
Did KDP return capital to shareholders this quarter?
KDP paid cash dividends of $312 million and declared dividends of $0.23 per share for the first quarter of 2025, compared with $0.215 per share a year earlier. The company did not repurchase any common stock during the first quarter of 2025, and $1,810 million remained available under its share repurchase authorization, which expires December 31, 2025.
What is the GHOST transaction, and how does it affect KDP?
KDP acquired a 60% interest in GHOST Lifestyle LLC effective December 31, 2024 for aggregate consideration of $999 million and agreed to purchase the remaining equity interests in 2028. It also obtained the rights to distribute GHOST products effective March 3, 2025. The filing states that GHOST contributed 2.9 percentage points to consolidated volume/mix growth and 4.8 percentage points to volume/mix growth in U.S. Refreshment Beverages.
What legal risks does the filing disclose?
The filing discloses Multidistrict Antitrust Litigation involving Keurig, in which plaintiffs collectively claim more than $5 billion in monetary damages. In January 2025 the court granted certain expert challenges but largely denied the parties' motions, and summary judgment motions are fully briefed. Keurig strongly disputes the claims, has not accrued a loss contingency, and says it cannot predict the outcome or potential loss.
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