01—Abstract
Summary
Summary of the 10-Q filed October 28, 2025. Cited figures are marked; the original filing is the authoritative source.
Keurig Dr Pepper Inc. reported third-quarter 2025 net sales of $4,306 milliona, up 10.7% from $3,891 million a year earlier, with net income rising 7.5% to $662 million and diluted EPS of $0.49 versus $0.45.
Growth was driven mainly by volume/mix (6.4 percentage points, including GHOST) and net price realization (4.2 percentage points). Gross margin declined 70 bps to 54.3%, while interest expense, net rose 77.4% to $188 millionb, largely due to unfavorable unrealized mark-to-market activity. For the first nine months of 2025, net sales were $12,104 million (up 7.3%) and net income was $1,726 million (up 8.9%).
The most significant developments are the pending JDE Peet's Acquisition, for which KDP entered a Bridge Credit Agreement of up to €16.2 billion, and planned financing through a JV Investment of $4 billionc for a 49% stake in the Pod Manufacturing JV and a $3 billion Convertible Preferred Stock investment. KDP also intends to separate its beverage and coffee portfolios after the JDE Peet's closing. The filing notes that Moody's placed KDP's ratings under review for downgrade and S&P placed KDP on CreditWatch Negative as of August 25, 2025.
Closing of the JDE Peet's Acquisition is expected in the first half of 2026, subject to regulatory approvals and tender acceptance. Liquidity remained solid at period end, with $516 milliond of cash and cash equivalents, $1,391 million of commercial paper outstanding, and the full $4.3 billion revolving credit capacity undrawn. Net cash provided by operating activities was $1,279 million for the first nine months, and KDP paid $937 million in cash dividends.
The company did not repurchase common stock in the first nine months of 2025. Litigation in the Multidistrict Antitrust Litigation claims more than $5 billion in damages, and KDP has not accrued a loss contingency.
02—Key points
Key Highlights
- Third-quarter 2025 net sales rose 10.7% to $4,306 million, and income from operations rose 10.3% to $995 million.
- Diluted EPS was $0.49 for the third quarter versus $0.45 a year earlier; net income for the first nine months was $1,726 million, up 8.9%.
- Interest expense, net increased 77.4% to $188 million in the third quarter, driven by unfavorable unrealized mark-to-market activity and higher debt costs.
- JDE Peet's Acquisition is pending, with a 364-day Bridge Credit Agreement of up to €16.2 billion and €10 billion of FX forward contracts entered in the third quarter to hedge exposure.
- KDP agreed to a $4 billion JV Investment for a 49% interest in the Pod Manufacturing JV and a $3 billion Convertible Preferred Stock investment, both expected to close alongside the JDE Peet's Acquisition.
- Moody's placed KDP's ratings under review for downgrade and S&P placed KDP on CreditWatch Negative, following the JDE Peet's announcement.
- Total debt-related obligations rose, with Notes carrying amount of $14,425 million at September 30, 2025, versus $12,948 million at December 31, 2024; the $990 million term loan was repaid and terminated.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2025, Keurig Dr Pepper kept $0.15.
- Revenue$4.31B100.0%
- Cost of revenue−$1.97B45.7%
- Gross profit$2.34B54.3%
- Operating costs−$1.34B31.2%
- Operating income$995.0M23.1%
- Interest, other & tax−$333.0M7.7%
- Net income$662.0M15.4%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed October 28, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $4.31B$3.89B | +10.7% |
| Cost of Revenue | $1.97B$1.75B | +12.3% |
| Gross Profit | $2.34B$2.14B | +9.3% |
| SG&A Expenses | $1.34B$1.25B | +8.0% |
| Operating Income | $995.00M$902.00M | +10.3% |
| Net Income | $662.00M$616.00M | +7.5% |
| EPS (Basic) | $0.49$0.45 | +8.9% |
| EPS (Diluted) | $0.49$0.45 | +8.9% |
| Shares Outstanding (Basic) | 1.36B1.36B | +0.2% |
| Shares Outstanding (Diluted) | 1.36B1.36B | +0.1% |
05—Questions
Frequently Asked Questions
How did KDP's operating performance trend in the third quarter of 2025?
Net sales grew 10.7% to $4,306 million, led by volume/mix (6.4 percentage points, including GHOST) and net price realization (4.2 percentage points). Gross margin fell 70 bps to 54.3%, and operating margin was 23.1% versus 23.2%. U.S. Refreshment Beverages drove growth, while U.S. Coffee income from operations fell 6.7% to $237 million.
What is the status of the JDE Peet's Acquisition and how will it be financed?
KDP entered a merger protocol on August 24, 2025, to acquire JDE Peet's through a tender offer at €31.85 per share in cash. The acquisition is expected to close in the first six months of 2026, subject to regulatory approvals and shareholder tender acceptance. Financing includes the Bridge Credit Agreement (up to €16.2 billion, fully undrawn as of September 30, 2025), a $4 billion JV Investment, and a $3 billion Convertible Preferred Stock issuance, with proceeds from the latter two expected to reduce the bridge facility.
How strong is KDP's liquidity and balance sheet position?
At September 30, 2025, KDP had $516 million of cash and cash equivalents, $2,285 million of short-term borrowings and current portion of long-term obligations, and $13,531 million of long-term obligations. The 2025 Revolving Credit Agreement provides $4.3 billion of capacity with no borrowings outstanding. KDP stated it was in compliance with all debt covenants. Stockholders' equity was $25,324 million.
What are the main risks highlighted in the filing?
Key risks include the possibility that the JDE Peet's Acquisition or Separation is not completed on the expected timeline or at all, significant new debt and possible credit rating downgrades, integration challenges, and dilution or governance restrictions from the Convertible Preferred Stock and Pod Manufacturing JV. The filing also notes the Multidistrict Antitrust Litigation, where plaintiffs claim more than $5 billion in damages, and KDP has not accrued a loss contingency for it.
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