01—Abstract
Summary
Summary of the 10-Q filed April 30, 2026. Cited figures are marked; the original filing is the authoritative source.
The Coca-Cola Company reported robust financial results for the first quarter of 2026, demonstrating strong top-line growth and improved profitability.
Net operating revenues increased by 12% year-over-year, reaching $12.47 billiona, driven by an 8% increase in concentrate sales volume and a 2% favorable price/mix. The company also benefited from a 3% positive impact from foreign currency fluctuations. This top-line expansion translated to a significant increase in profitability, with operating income rising by 19% to $4.36 billion and consolidated net income growing to $3.97 billion from $3.34 billion in the prior year period.
The company's strategic focus on volume growth and effective pricing strategies continues to yield positive results. Despite ongoing investments in marketing and some commodity cost pressures, Coca-Cola maintained a healthy gross profit margin of 63.0%b and expanded its consolidated operating margin to 35.0% from 32.9%. The company's diversified global operations and strong brand portfolio are key drivers of this performance, with significant growth observed across multiple operating segments, particularly in North America and Asia Pacific.
While the company faces ongoing litigation with the IRS regarding historical tax matters, it has paid the assessed amount and is appealing the decision. The potential financial impact, though significant, is being actively managed, and the company maintains a strong liquidity position. Overall, the first quarter of 2026 presents a picture of a financially healthy company with sustained operational momentum and effective execution of its growth strategies.
02—Key points
Key Highlights
- Net operating revenues increased 12% to $12.47 billion, driven by 8% concentrate sales volume growth and 2% favorable price/mix.
- Operating income grew 19% to $4.36 billion, reflecting strong revenue growth and margin expansion.
- Consolidated net income rose to $3.92 billion ($0.91 per diluted share) from $3.33 billion ($0.77 per diluted share) in the prior year's comparable period.
- Gross profit margin improved to 63.0% from 62.6%, supported by pricing initiatives and favorable currency impacts.
- North America and Asia Pacific segments showed strong operating income growth, up 12% and 6% respectively.
- The company paid $6.0 billion in back taxes and interest related to an IRS tax dispute but continues to appeal the decision, with an estimated potential future liability of up to $14 billion for subsequent years.
- Cash provided by operating activities was $2.02 billion, a significant improvement from a use of $5.20 billion in the prior year period.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Coca Cola Co kept $0.31.
- Revenue$12.47B100.0%
- Cost of revenue−$4.62B37.0%
- Gross profit$7.85B63.0%
- Operating costs−$3.49B28.0%
- Operating income$4.36B35.0%
- Interest, other & tax−$435.0M3.5%
- Net income$3.92B31.5%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed April 30, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $12.47B$12.54B | −0.5% |
| Cost of Revenue | $4.62B$4.71B | −2.0% |
| Gross Profit | $7.85B$7.82B | +0.4% |
| SG&A Expenses | $3.47B$3.47B | +0.1% |
| Operating Income | $4.36B$4.28B | +1.8% |
| Interest Expense | $375.00M$445.00M | −15.7% |
| Net Income | $3.92B$3.81B | +3.0% |
| EPS (Basic) | $0.91$0.89 | +2.2% |
| EPS (Diluted) | $0.91$0.88 | +3.4% |
| Shares Outstanding (Basic) | 4.30B4.30B | 0.0% |
| Shares Outstanding (Diluted) | 4.31B4.32B | 0.0% |
05—Questions
Frequently Asked Questions
What is the overall financial performance of Coca-Cola in Q1 2026?
The Coca-Cola Company demonstrated strong financial performance in the first quarter of 2026. Net operating revenues increased by 12% to $12.47 billion, driven by volume growth and favorable pricing. Operating income saw a 19% increase to $4.36 billion, and net income attributable to shareowners grew to $3.92 billion, or $0.91 per diluted share. The company also reported a positive shift in operating cash flow.
How did the company's revenue growth break down?
Revenue growth was primarily driven by an 8% increase in concentrate sales volume and a 2% favorable price/mix. Additionally, foreign currency fluctuations had a favorable impact of 3% on consolidated net operating revenues.
What is the status of the IRS tax litigation, and what is its potential financial impact?
The company paid $6.0 billion in back taxes and interest for tax years 2007-2009 related to a transfer pricing dispute with the IRS. While Coca-Cola is appealing the Tax Court's decision, it believes it's more likely than not to prevail. The company estimates a potential aggregate remaining incremental tax and interest liability for tax years 2010-2025 could be approximately $14 billion if the IRS methodology were upheld. The company's liquidity is considered sufficient to manage this outcome.
What are the key drivers of profitability and margins?
Profitability was boosted by strong net operating revenue growth, a favorable price/mix, and efficient cost management. The gross profit margin improved slightly to 63.0%, and the consolidated operating margin expanded to 35.0%. Key drivers include strategic pricing initiatives, operational efficiencies, and the positive impact of foreign currency exchange rates.
06—Continue