Keurig Dr Pepper (KDP) Q4 2025 earnings summary

Executive summary

• Achieved all 2025 guidance targets with 8.6% 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 progressed on the acquisition and integration of JDE Peet's, with plans for separation into Beverage Co. and Global Coffee Co.; operational readiness targeted by end of 2026.

• Successfully integrated GHOST Lifestyle, contributing to volume/mix growth.

• Board leadership transition: Pamela Patsley to become board chair, with new independent directors joining.

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

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 distribution termination payment; 2026 outlook is ~$2 billion.

• Adjusted EBITDA for the last twelve months reached $4.87 billion; management leverage ratio at 3.1x.

• Gross margin contracted 150 bps in Q4 due to inflation, partly offset by price realization and productivity savings.

Outlook and guidance

• 2026 net sales expected at $25.9–$26.4 billion, including $8.5–$8.7 billion from JDE Peet's (from Q2 onward); standalone growth guidance is 4–6%.

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

• Interest expense projected at $1.07–$1.12 billion; effective tax rate at 22–23%; ~1.37 billion diluted shares outstanding.

• Q1 2026 EPS expected at $0.36–$0.37, below prior year due to cost headwinds, inventory adjustments, and lapping a one-time gain.

• Free cash flow forecasted to rise to $2 billion in 2026, with further updates post-acquisition.