Total Revenue

+4.8% (from $3.468B to $3.635B)

The overall revenue growth is driven primarily by strong performance in the U.S. Refreshment Beverages segment, which rose by 11%, while partially offset by declines in International revenue (–6.3%) and U.S. Coffee (–3.7%). This mixed performance reflects the continuation of favorable volume/mix and pricing strategies in key segments from previous periods, building on prior strengths. " " "

U.S. Refreshment Beverages

+11% (from $2.093B to $2.323B)

The segment benefited from robust volume/mix growth (around 8% contribution), enhanced by favorable net price realization (approx. 3%) and strategic initiatives such as the acquisition of GHOST (adding 2.9 percentage points). This marks an acceleration of growth compared to earlier periods where pricing enhancements and partnerships had begun to drive positive momentum. " "

U.S. Coffee

~–3.7% (from $911M to $877M)

The slight decrease in revenue continues the trend observed in earlier periods, with challenges stemming from unfavorable pricing actions and subdued volume/mix dynamics. The same pressures seen previously—where pricing headwinds offset modest volume/mix gains—persist in the current period. " "

International Revenue

–6.3% (from $464M to $435M)

The decline is largely attributed to adverse foreign currency translation effects and possibly weaker demand in certain markets. In previous periods, similar FX pressures were noted, and this trend has continued, contributing to a stronger negative impact on reported revenue this quarter. " " "

Net Income

+14% (from $454M to $517M)

Improved net income reflects the uplift in overall sales driven by the booming U.S. Refreshment segment combined with strengthened operational efficiencies. This year-over-year gain, which also increased Basic EPS from $0.33 to $0.38, builds on earlier improvements in revenue and cost management strategies. " " " "

Operating Cash Flow

+145% (from $85M to $209M)

The dramatic rise in operating cash flow is primarily due to a much improved working capital profile; the net impact of operating assets and liabilities improved markedly compared to the previous period. Enhanced trade receivables, inventory adjustments, and a smaller negative shift in accounts payable and accrued expenses contributed to this significant turnaround. " "

Net Sales Growth

FY 2025

Mid-single-digit growth on a constant currency basis. "

Mid-single-digit constant currency growth, with a bias towards the high end of the range. " " "

raised

Earnings Per Share (EPS) Growth

FY 2025

High single-digit growth on a constant currency basis. "

High single-digit constant currency growth. " " "

no change

Foreign Exchange Impact

FY 2025

An anticipated additional 1 to 2 percentage point headwind due to foreign exchange rates. "

FX is expected to represent approximately a 1 percentage point headwind to both top and bottom line growth for the full year. "

lowered

Interest Expense

FY 2025

Expected to be in the range of $680 million to $700 million. "

Expected to be in the range of $680 million to $700 million. "

no change

Effective Tax Rate

FY 2025

Approximately 22% to 23%. "

Approximately 22% to 23%. "

no change

Diluted Weighted Average Shares Outstanding

FY 2025

Approximately 1.37 billion. "

Approximately 1.37 billion shares. "

no change

Tariff Impacts

FY 2025

no prior guidance

Anticipated tariff impacts in 2025 are expected to be manageable relative to the guidance, with mitigation steps planned. " "

no prior guidance

Free Cash Flow

FY 2025

no prior guidance

Healthy free cash flow generation is expected for 2025, with improvement over 2024, especially after accounting for the $225 million GHOST distribution payment. " "

no prior guidance

Energy Drinks Growth and Portfolio Expansion

Consistently bullish. Q2 discussions highlighted robust energy drink sales and the growing portfolio with brands like C4 (30% growth in Q2 " " ), Q3 emphasized key acquisitions such as GHOST and complementary brand positioning " " , and Q4 focused on strategic expansion and achieving a double‑digit market share. " "

Continued momentum. In Q1 2025, energy drinks delivered high single‑digit retail sales with recent weeks achieving double‑digit growth. The energy portfolio—comprising C4, Bloom, Black Rifle and the smooth GHOST integration—demonstrated strong execution. " " "

Bullish sentiment endures, with incremental acceleration and flawless execution of portfolio integration.

U.S. Coffee Segment Performance Challenges

Persistent headwinds. Q2 and Q3 calls noted muted at‑home consumption, pricing declines driven by promotional activity and commodity inflation " " " " , while Q4 underscored subdued growth along with escalating green coffee cost pressures. " "

Continued challenges. Q1 2025 reported a 3.7% net sales decline, volume/mix pressures, and further margin squeeze from record green coffee inflation and tariff impacts. " " "

Downbeat sentiment remains persistent, indicating ongoing challenges in growth and profitability for the U.S. Coffee segment.

Input Cost Inflation and Tariff/Material Cost Pressures

Noted across multiple periods. While Q2 had more subtle mentions " , Q3 and Q4 provided detailed discussion on commodity and aluminum cost inflation (with Q4 discussing hedging limitations). " "

Emphatic challenge. In Q1 2025, record green coffee inflation was highlighted with a gross margin contraction of 170bps and ongoing tariff pressures necessitating pricing and productivity measures. " " " "

Persistent inflationary headwinds remain, with continuous mitigation efforts indicating cautious management.

Brand Innovation and Portfolio Optimization

Strong focus. Q2 showcased successful innovations (e.g., Dr Pepper Creamy Coconut, Canada Dry Fruit Splash " ), Q3 stressed consumer‑centric brand building and portfolio adjustments (including GHOST and Electrolit integration " " ), and Q4 emphasized major new product launches and strategic portfolio moves. "

Enhanced momentum. Q1 2025 introduced new products such as Dr Pepper Blackberry and 7UP Tropical, while continuing to drive energy portfolio success and optimizing coffee portfolios (e.g. Lavazza K‑Cup growth). " " " "

Sustained innovation with continuous infusion of new products and proactive portfolio optimization to capture emerging opportunities.

Capital Allocation and Free Cash Flow Management

Financial strength showcased. Q2 generated robust free cash flow ($543M " ), Q3 highlighted strong FCF generation and active capital deployment with share buybacks and dividend increases " , and Q4 demonstrated high FCF generation and strategic investments alongside deleveraging efforts. " "

Disciplined execution. Q1 2025 delivered $102M free cash flow (adjusted for a one‑time $225M payment) and reaffirmed progressive steps toward deleveraging and balanced capital returns, underlining a consistent commitment to strong cash generation. " "

Consistent financial discipline with robust free cash flow generation and dynamic capital allocation remaining a core strength.

Execution and Integration Risks from Overextension

Addressed in Q3 only. Q3 provided detailed commentary on integration preparedness for GHOST and other partnerships, with CEO confidence and examples (Electrolit transition) mitigating overextension concerns. "

Not explicitly mentioned. Q1 2025 did not raise specific concerns about overextension, instead highlighting smooth integration and strong execution in key segments. " " "

Reduced emphasis on overextension risks suggests earlier concerns have been successfully managed.

Consumer Demand Uncertainty and Inflationary Pressures

Ongoing caution. Q2 discussed mixed consumer behavior by income and selective purchasing (e.g. shifts toward value channels " " ), Q3 noted a soft consumer environment in some categories and commodity cost inflation " " , and Q4 detailed subdued coffee demand alongside persistent inflation pressures. " " "

Continued caution. Q1 2025 acknowledged an uncertain economic backdrop with dampened consumer sentiment among certain demographics and reaffirmed aggressive measures to counter inflation, including price increases and productivity actions. " " " "

Cautious tone persists; while core demand holds, inflation and selective consumer behavior continue to pose challenges across segments.

Decline in Emphasis on International Expansion

Not an issue. Q2, Q3, and Q4 consistently highlighted strong performance internationally, with double‑digit growth and strategic licensing deals (e.g., Nessea in Canada). " " " "

Not mentioned as a concern. Q1 2025 did not indicate any decline; instead, international growth remained positive with key market gains, confirming ongoing focus on these markets. " "

No decline noted; international expansion continues to be a positive and stable component of KDP’s strategy.

Productivity and Cost Management Initiatives

Emphasized across periods. Q2 highlighted significant productivity savings and cost discipline driving margins " " , Q3 stressed SG&A leverage and productivity gains leading to operating margin expansion " " , while Q4 underscored high‑end productivity savings and tight cost management in the wake of inflation. " "

Maintained focus. In Q1 2025, disciplined expense management and targeted productivity savings were underlined as key to offsetting tariff and inflation impacts, with ongoing efforts in cost control and efficiency enhancements. " "

Consistent emphasis on cost management initiatives that support profitability and mitigate external inflation pressures.