Keurig Dr Pepper (KDP) Q4 2025 earnings summary

Executive summary

• Achieved all 2025 guidance targets with 8.6% constant currency net sales growth and 7.3% adjusted EPS growth, driven by innovation, market share gains, and strong U.S. Refreshment Beverages and international performance.

• Announced and advanced the acquisition of JDE Peet's, with integration planning underway and deal expected to close in early April 2026, followed by separation into Beverage Co. and Global Coffee Co.

• Board and governance evolving, including new chair transition and addition of independent directors to support transformation.

• Positioned for a transformational next chapter, focusing on innovation, digital marketing, and operational readiness for separation.

Financial highlights

• FY 2025 net sales reached $16.6 billion, up 8.6% year-over-year (constant currency); adjusted operating income grew 4.9% to $4.2 billion; adjusted EPS rose 7.3% to $2.05.

• Q4 2025 net sales up 9.9% to $4.5 billion; adjusted operating income up 4.8% to $1.2 billion; adjusted EPS up 1.7% to $0.60.

• Free cash flow for 2025 was $1.52 billion, including a $225 million one-time payment; 2026 standalone FCF expected to rise to ~$2 billion.

• 2025 adjusted operating margin was 25.0%; Q4 adjusted operating margin was 26.5%.

• Management leverage ratio at year-end 2025 was 3.1x.

Outlook and guidance

• 2026 net sales expected at $25.9–$26.4 billion, including $8.5–$8.7 billion from JDE Peet's (Q2–Q4); standalone guidance: 4–6% net sales and EPS growth, with FX as a 1% tailwind.

• Low double-digit adjusted EPS growth targeted for 2026 (constant currency), with 6–7 percentage points from JDE Peet's.

• Q1 2026 EPS expected at $0.36–$0.37, down from $0.42 prior year, due to cost headwinds and inventory adjustments; EPS growth to accelerate in H2.

• Interest expense for 2026 expected at $1.07–$1.12 billion; effective tax rate 22–23%; diluted weighted average shares outstanding: ~1.37 billion.