01—Abstract
Summary
Summary of the 8-K filed February 3, 2026. Cited figures are marked; the original filing is the authoritative source.
Mondelēz International (MDLZ) reported fourth-quarter and full-year 2025 results on February 3, 2026, showing a mixed picture: top-line growth held up, but profitability and per-share earnings fell sharply under the weight of cocoa cost inflation and large non-cash derivative mark-to-market swings.
FY'25 net revenues rose 5.8% to $38.5 billiona, driven by 4.3% organic net revenue growth (higher pricing of +8.0 points, offset by volume/mix of -3.7 points), plus the Evirth acquisition and favorable currency. Q4 net revenues grew 9.3%, with organic growth of 5.1%. Profitability weakened materially: FY'25 Adjusted Gross Profit margin fell 580 bps to 32.0% and Adjusted Operating Income margin fell 300 bps to 13.2%, as higher raw material (cocoa) costs and unfavorable mix outweighed pricing, productivity and overhead savings.
Reported diluted EPS fell 44.7% to $1.89b, largely due to unfavorable mark-to-market derivative impacts and pension settlement losses, while Adjusted EPS declined 14.6% on a constant currency basis to $2.92. Cash generation and shareholder returns remained solid. Operating cash flow was $4.5 billion and Free Cash Flow was $3.2 billion, down from $3.5 billion.
The company returned $4.9 billionc to shareholders via dividends and buybacks, though net debt rose $2.7 billion to $19.1 billion and short-term borrowings increased to $2.7 billion. For 2026, management guided to organic net revenue growth of flat to 2%, Adjusted EPS growth of flat to 5% on a constant currency basis, and Free Cash Flow of about $3 billion, with currency expected to add roughly 2.0% to net revenue growth and about $0.06 to Adjusted EPS.
Management frames the outlook as cautious, citing ongoing cocoa cost volatility, geopolitical and tariff uncertainty, and commodity price swings. Investors will be watching whether cocoa cost stabilization and new restructuring actions can restore margins in 2026.
02—Key points
Key Highlights
- FY'25 net revenues rose 5.8% to $38.5 billion; organic net revenue grew 4.3%, entirely price-driven (+8.0 pts pricing vs. -3.7 pts volume/mix).
- Adjusted Operating Income margin fell 300 bps to 13.2% and Adjusted Gross Profit margin fell 580 bps to 32.0%, reflecting unprecedented cocoa cost inflation and unfavorable product mix.
- Reported diluted EPS fell 44.7% to $1.89, while Adjusted EPS declined 14.6% constant currency to $2.92; the gap is driven mainly by derivative mark-to-market losses and pension settlement charges.
- Q4 2025 net revenues rose 9.3% with 5.1% organic growth, but Q4 reported diluted EPS fell 60.8% to $0.51 (Adjusted EPS $0.72, up 4.6% constant currency).
- Free Cash Flow was $3.2 billion (down from $3.5 billion) and returned $4.9 billion to shareholders; net debt rose to $19.1 billion from $16.4 billion.
- 2026 guidance: organic net revenue growth of flat to 2%, Adjusted EPS growth of flat to 5% (constant currency), and Free Cash Flow of about $3 billion.
- Management launched new restructuring actions in Q4 2025 and continues the multi-year ERP System Implementation (expected completion by year-end 2028), with cost savings intended to support margins.
03—Questions
Frequently Asked Questions
Why did reported EPS fall so much more than Adjusted EPS in 2025?
Reported diluted EPS of $1.89 (down 44.7%) includes several items excluded from Adjusted EPS of $2.92. The largest is an unfavorable $0.83 per-share mark-to-market loss from commodity and foreign currency derivatives, which reverses when hedged positions settle. Pension participation changes added about $0.20 of charges (including pension buy-out settlement losses), and ERP implementation costs added $0.10. These were partially offset by a gain on an equity method investment transaction and other items.
How is cocoa affecting Mondelēz's profitability?
Cocoa and other raw material cost inflation was the primary driver of margin compression. Adjusted Gross Profit margin fell 580 bps for the year to 32.0%, and Adjusted Operating Income margin fell 300 bps to 13.2%. Pricing actions (+8.0 pts for the year) partly offset these costs, but volume declined 3.7 points and unfavorable mix weighed further. Management says it expects cocoa costs to stabilize, but the guidance still reflects significant uncertainty.
What does the 2026 outlook imply for investors?
The 2026 guidance is modest: organic net revenue growth of flat to 2%, Adjusted EPS growth of flat to 5% on a constant currency basis, and Free Cash Flow of about $3 billion. Currency is expected to add roughly 2 points to reported net revenue growth and about $0.06 to Adjusted EPS. The company explicitly cites elevated volatility from geopolitical, trade, regulatory and commodity factors, so the range is wide and depends heavily on cocoa cost trends and volume recovery.
Is Mondelēz's balance sheet and capital return sustainable?
Operating cash flow of $4.5 billion covered capital expenditures of $1.3 billion, leaving Free Cash Flow of $3.2 billion, which funded $2.5 billion in dividends and $2.4 billion in share repurchases. However, total returns exceeded Free Cash Flow, and net debt rose $2.7 billion to $19.1 billion, with short-term borrowings up to $2.7 billion. Investors should monitor whether 2026's roughly $3 billion Free Cash Flow guidance can keep pace with shareholder distributions and debt levels.
What are the main drivers of revenue growth, and where is growth coming from?
Growth came mainly from pricing and acquisitions rather than volume. For FY'25, Emerging Markets net revenue grew 8.5% (organic 7.2%), while Developed Markets grew 4.0% (organic 2.5%). Europe reported +12.9% and Latin America was down 0.5% on a reported basis. North America declined 2.1%, with organic volume weakness. Acquired Evirth contributed about $316 million of incremental revenue in 2025, and currency also helped reported results.
04—Continue