01—Abstract
Summary
Summary of the 10-K filed February 3, 2026. Cited figures are marked; the original filing is the authoritative source.
PepsiCo, Inc. (PEP) has released its 2025 Annual Report (10-K), detailing a year marked by efforts to navigate macroeconomic challenges including inflation, supply chain disruptions, and evolving consumer preferences.
The company demonstrated resilience, with reported net revenue increasing by 2% to $93.9 billiona. However, operating profit saw a decline of 11% to $11.5 billion, primarily attributed to increased operating costs, specific impairment charges, and the impact of higher commodity costs, partially offset by productivity savings and effective net pricing. Strategic initiatives remain a focus, including efforts to reignite North American business performance through integration and brand investment, and expanding international market presence.
The company continues to advance its pep+ transformation, emphasizing portfolio reshaping towards healthier options, sustainable packaging, and digital integration. Despite a challenging environment, PepsiCo is committed to returning value to shareholders through a 4% increase in its annualized dividend and a new $10 billionb share repurchase program, signaling confidence in its long-term strategy.
02—Key points
Key Highlights
- Net revenue grew 2% to $93.9 billion in 2025, indicating continued top-line strength.
- Operating profit decreased 11% to $11.5 billion, impacted by higher costs and specific charges.
- The company completed significant acquisitions, including poppi and Siete, to bolster its portfolio.
- PepsiCo announced a 4% increase in its annualized dividend and a new $10 billion share repurchase program.
- Continued investment in productivity initiatives and digital transformation, including AI, to enhance efficiency and consumer insights.
- Navigated challenges such as inflation, supply chain disruptions, and evolving consumer demand, while maintaining a focus on the pep+ sustainability agenda.
- Sales to Walmart represented 14% of consolidated net revenue, highlighting the importance of key retail partners.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2025, Pepsico Inc kept $0.09.
- Revenue$93.92B100.0%
- Cost of revenue−$43.07B45.9%
- Gross profit$50.86B54.1%
- Operating costs−$39.36B41.9%
- Operating income$11.50B12.2%
- Interest, other & tax−$3.26B3.5%
- Net income$8.24B8.8%
Where FY2025 revenue went
$93.92B- Cost of revenue: $43.07B, 46% of revenue
- SG&A: $37.37B, 40% of revenue
- Net income: $8.24B, 8.8% of revenue
- R&D: $839.0M, 0.9% of revenue
- Other operating costs: $1.15B, 1.2% of revenue
- Interest, other & tax: $3.26B, 3.5% of revenue
Kept 8.8% as net incomeNet income $8.24B · 8.8%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2025filed February 3, 2026Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $93.92B$91.85B | +2.3% |
| Cost of Revenue | $43.07B$41.74B | +3.2% |
| Gross Profit | $50.86B$50.11B | +1.5% |
| R&D Expenses | $839.00M$813.00M | +3.2% |
| SG&A Expenses | $37.37B$37.19B | +0.5% |
| Operating Income | $11.50B$12.89B | −10.8% |
| Interest Expense | $1.12B$919.00M | +22.0% |
| Net Income | $8.24B$9.58B | −14.0% |
| EPS (Basic) | $6.02$6.97 | −13.6% |
| EPS (Diluted) | $6.00$6.95 | −13.7% |
| Shares Outstanding (Basic) | 1.37B1.37B | −0.3% |
| Shares Outstanding (Diluted) | 1.37B1.38B | −0.4% |
05—Questions
Frequently Asked Questions
What were the primary drivers for the change in operating profit?
Operating profit decreased by 11% primarily due to increased operating costs, significant impairment charges related to the Rockstar brand, a decline in organic volume, and the impact of higher commodity costs. These were partially offset by productivity savings and effective net pricing.
How is PepsiCo returning value to shareholders in 2026?
PepsiCo expects to return approximately $8.9 billion to shareholders in 2026, comprising dividends of approximately $7.9 billion (reflecting a 4% increase in the annualized dividend to $5.92 per share) and share repurchases of approximately $1.0 billion under a new $10 billion repurchase program.
What strategic acquisitions did PepsiCo make in 2025?
In 2025, PepsiCo completed the acquisition of poppi, a prebiotic soda business, for $1.95 billion plus contingent consideration, and Siete, a Mexican-American foods business, for $1.2 billion in cash. These acquisitions are expected to strengthen its portfolio.
What are the company's key risk factors mentioned in the report?
Key risk factors include potential reductions in future demand due to changing consumer preferences and affordability, damage to brand reputation, product recalls, inability to compete effectively, workforce management challenges, water scarcity, disruptions to supply chains and manufacturing operations, cyber incidents, geopolitical instability, and the impact of taxes and regulations on products.
06—Continue