01—Abstract
Summary
Summary of the 8-K filed February 10, 2026. Cited figures are marked; the original filing is the authoritative source.
The Coca-Cola Company (KO) reported fourth quarter and full year 2025 results on February 10, 2026, showing a mixed picture on the headline GAAP numbers but solid underlying performance.
Q4 reported net revenues grew 2% to $11.8 billiona, with organic revenues up 5% and unit case volume up 1%. Reported operating income fell 32% to $1.84 billion, driven by a $960 million non-cash impairment of the BODYARMOR trademark, while comparable currency neutral operating income grew 13%. For the full year, net revenues rose 2% to $47.9 billion, organic revenues grew 5%, reported operating income rose 38% to $13.8 billion (lapping 2024's large fairlife contingent consideration charge), and reported diluted EPS grew 23% to $3.04.
Comparable EPS, which strips out items impacting comparability, grew 4% to $3.00b, with a roughly 5-point currency headwind; comparable currency neutral EPS grew 9%. Cash generation was strong but distorted by a one-time item. Operating cash flow was $7.4 billion and free cash flow was $5.3 billion for 2025, but these figures include a $6.1 billion fairlife contingent consideration payment made in Q1 2025.
Excluding that payment, free cash flow was $11.4 billionc. The company also paid $8.8 billion in dividends and extended its streak of annual dividend increases to 63 years, while net share repurchases were modest at $0.4 billion, leaving about $5.2 billion of authorization remaining. Looking ahead, management guided 2026 organic revenue growth of 4% to 5%, comparable currency neutral EPS growth excluding acquisitions and divestitures of 5% to 6%, and comparable EPS growth of 7% to 8% from the $3.00 base, with a roughly 3-point currency tailwind.
Projected 2026 free cash flow is approximately $12.2 billiond. The guidance assumes the pending sale of Coca-Cola Beverages Africa closes in the second half of 2026, creating an approximate 4-point revenue headwind and 1-point EPS headwind. Management also announced leadership and organizational changes, including a new Chief Digital Officer role, to support topline growth.
02—Key points
Key Highlights
- Q4 2025 organic revenues grew 5% and comparable currency neutral operating income grew 13%, but reported operating income fell 32% to $1.84 billion due to a $960 million non-cash BODYARMOR trademark impairment.
- Full year 2025 reported diluted EPS rose 23% to $3.04, while comparable EPS grew 4% to $3.00; comparable currency neutral EPS grew 9%, with currency a roughly 5-point headwind.
- Full year 2025 reported operating margin expanded to 28.7% from 21.2%, and comparable operating margin rose to 31.2% from 30.0%.
- Free cash flow was $5.3 billion for 2025, or $11.4 billion excluding the $6.1 billion fairlife contingent consideration payment made in Q1 2025.
- 2026 guidance calls for 4% to 5% organic revenue growth, 5% to 6% comparable currency neutral EPS growth excluding M&A, 7% to 8% comparable EPS growth from $3.00, and about $12.2 billion in free cash flow.
- The pending sale of Coca-Cola Beverages Africa, assumed to close in H2 2026, is a roughly 4-point revenue headwind and 1-point EPS headwind in the 2026 outlook.
- Shareholder returns remained steady with $8.8 billion in dividends paid and a 63-year streak of annual dividend increases, while net buybacks were only $0.4 billion.
03—Questions
Frequently Asked Questions
Why did reported operating income fall in Q4 2025 even though the underlying business grew?
Q4 reported operating income declined 32% to $1.84 billion, mainly because of a $960 million non-cash impairment of the BODYARMOR trademark, which management attributed to slower projected category growth, a more competitive environment, and narrower innovation and international rollout plans. Currency headwinds also weighed. Excluding these items, comparable currency neutral operating income grew 13%, driven by organic revenue growth and cost management.
How should investors interpret the 2025 free cash flow figure?
Reported 2025 free cash flow of $5.3 billion is depressed by the $6.1 billion fairlife contingent consideration payment made in March 2025, which was a one-time item tied to the 2020 acquisition. Excluding that payment, free cash flow was $11.4 billion. The 2026 projection of about $12.2 billion (operating cash flow of $14.4 billion less $2.2 billion of capex) provides a cleaner comparison base for the coming year.
What is driving the 2026 EPS guidance, and what are the key headwinds and tailwinds?
The guidance calls for 7% to 8% comparable EPS growth from $3.00, which includes an approximate 3-point currency tailwind and a 1-point headwind from acquisitions and divestitures, mainly the pending CCBA sale. Excluding M&A and currency, comparable currency neutral EPS growth is expected at 5% to 6%. Q1 2026 is expected to benefit from a 2-point currency tailwind and six additional days versus Q1 2025, though a 1-point divestiture headwind applies to revenue.
Does the 2025 tax picture affect comparability with prior years?
Yes. Full-year 2025 reported EPS of $3.04 includes an 8-point currency headwind and a 19-point benefit from items impacting comparability, including a $1.1 billion gain-related and tax benefit mix. Certain tax matters added $878 million of tax expense that is excluded from comparable results, and the 2026 underlying effective tax rate of 20.9% excludes the potential outcome of the ongoing IRS tax litigation, which could be material if the company does not prevail.
04—Continue