Executive Summary

Q1 2025 organic revenue grew 6% (price/mix +5%, concentrate +1%) while reported net revenue declined 2% to $11.1B on FX (-5 pts) and refranchising (-3 pts); operating margin expanded to 32.9% (comparable 33.8%) on disciplined cost and marketing timing .
Comparable EPS was $0.73 (+1% YoY) vs S&P Global consensus $0.716* (beat), while reported EPS was $0.77 (+5% YoY); revenue of $11.129B was slightly below the $11.158B* consensus (miss) .
Guidance maintained for FY25 organic revenue +5–6% and comparable EPS +2–3%; updated to comparable currency-neutral EPS +7–9% and improved FX headwinds (comparable net revenue FX headwind now 2–3% vs 3–4% prior; comparable EPS FX headwind now 5–6% vs 6–7% prior) .
Cash from operations of -$5.2B and free cash flow of -$5.5B reflect the ~$6.1B fairlife contingent consideration payment; FCF ex-fairlife was ~$0.56B; net leverage at 2.1x EBITDA supports capital allocation (dividend declared $0.51 per share) .
Management flagged “choppy” near-term demand (NA volumes -3%; Mexico softness; calendar/weather/misinformation impacts) but reiterated confidence in FY25 targets and local-execution playbook (affordability, refillables, cold-drink equipment) .

Note: Values marked with * are consensus estimates retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well
- Margin expansion: Operating margin rose to 32.9% and comparable operating margin to 33.8% (+134 bps YoY), aided by organic growth, cost control, marketing timing, and refranchising tailwinds (partly offset by FX) .
- Category/brand momentum: Coca‑Cola Zero Sugar grew 14% and the company gained value share in total NARTD; APAC volume +6% with India and China strength .
- Clear local-execution playbook: CEO emphasized reinforcing “localness” and affordability to manage macro/geopolitics; reiterated ability to achieve FY25 guidance under all‑weather strategy .
What Went Wrong
- North America volume -3% (sparkling and hydration pressure) amid severe weather, calendar shifts (two fewer days), and a false viral video that hit Trademark Coke in southern states; management is targeting affordability and Hispanic consumer re‑engagement .
- Mexico softness on tougher comps, holiday shift (Easter), and consumer sentiment tied to geopolitical tension; actions include affordability (refillables/value packs) and “Made in” messaging .
- FX and structural headwinds: Reported revenue -2% despite +6% organic, with -5 pts FX and -3 pts refranchising; cash flow optics impacted by ~$6.1B fairlife payment .

Financial Results

Quarterly summary (oldest → newest)

Metric	Q3 2024	Q4 2024	Q1 2025
Net Revenues ($USD Billions)	$11.9	$11.5	$11.129
GAAP EPS ($)	$0.66	$0.51	$0.77
Comparable EPS ($)	$0.77	$0.55	$0.73
Operating Margin (GAAP, %)	21.2%	23.5%	32.9%
Comparable Operating Margin (%)	30.7%	24.0%	33.8%
Organic Revenue Growth YoY (%)	9%	14%	6%

Q1 2025 vs S&P Global consensus

Metric	Consensus	Actual	Surprise
Comparable/Primary EPS ($)	0.716*	0.73	+$0.014 (+2.0%)*
Revenue ($USD Billions)	11.158*	11.129	-$0.029 (-0.3%)*

Note: Consensus estimates and surprise calculations are based on S&P Global data.*

Segment performance – Q1 2025

Segment	Net Operating Revenues ($MM)	Operating Income ($MM)
Europe, Middle East & Africa	$2,657	$1,065
Latin America	$1,477	$904
North America	$4,361	$1,341
Asia Pacific	$1,421	$624
Bottling Investments	$1,463	$119
Corporate/Elims/Other	$26; Eliminations $(276)	Corporate $(394)
Consolidated	$11,129	$3,659

KPI drivers – Q1 2025 (YoY % change)

Region	Unit Case Volume	Price/Mix	Concentrate Sales	Organic Revenue
Consolidated	2	5	1	6
EMEA	3	6	1	7
Latin America	0	16	(3)	13
North America	(3)	8	(4)	3
Asia Pacific	6	(1)	8	7
Bottling Investments	(17)	3	(1)	2

Additional category notes: Sparkling soft drinks +2%; Coca‑Cola Zero Sugar +14%; tea even; water +3%; sports -1% .

Cash flow – Q1 2025

Metric	Amount
Cash from Operations ($B)	$(5.202)
Free Cash Flow ($B)	$(5.511)
FCF ex fairlife payment ($B)	$0.558

Drivers: ~$6.1B fairlife contingent consideration paid in March 2025 (final milestone) .

Non-GAAP adjustments of note (Q1 2025)

Items impacting comparability included a $331M gain on partial sale of CCEP stake and a $47M fairlife contingent consideration remeasurement charge; other items included hedging and securities mark‑to‑market timing adjustments .

Guidance Changes

Metric	Period	Previous Guidance (2/11/25)	Current Guidance (4/29/25)	Change
Organic Revenue Growth (non‑GAAP)	FY 2025	+5% to +6%	+5% to +6%	Maintained
Comparable Net Revenues FX Headwind	FY 2025	3%–4% headwind	2%–3% headwind	Improved
Comparable Currency‑Neutral EPS Growth	FY 2025	+8% to +10%	+7% to +9%	Trimmed
Comparable EPS Growth (all‑in)	FY 2025	+2% to +3% vs $2.88	+2% to +3% vs $2.88	Maintained
FX Headwind to Comparable EPS	FY 2025	6%–7% headwind	5%–6% headwind	Improved
Underlying Effective Tax Rate	FY 2025	20.8%	20.8%	Maintained
FCF ex fairlife (Non‑GAAP)	FY 2025	~$9.5B	~$9.5B	Maintained
Global trade dynamics	FY 2025	—	Impact expected manageable	New
Comparable Net Revenues FX	Q2 2025	—	~3% headwind	New
Comparable EPS FX	Q2 2025	—	5%–6% headwind	New
Dividend	Next payment	—	$0.51 per share, payable Jul 1 (record Jun 13)	Declared

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24, Q4’24)	Current Period (Q1’25)	Trend
AI/tech & marketing productivity	Expanded AI partnerships (WPP/NVIDIA); RGM tools; digital creative at scale	Studio X scaled tailored digital; efficiency focus in creative/media planning to drive same/higher impact at lower cost	Steady execution; productivity ramp
Supply chain & 2Q setup	Normalization; refranchising impact; 2 extra days in Q4’24	Expect “choppy” Q2 given broader industry disruptions, but KO not expecting own supply issues; one extra day in Q4’25	Monitoring; manageable
Tariffs/macro & FX	Significant FX headwinds in 2024; 2025 FX mid-single digit headwinds guided	Tariff impact seen as manageable given local sourcing; FX headwind refined to 5–6% on EPS	Slightly improved FX outlook
Product performance	Share gains; Zero Sugar and tea momentum	Coke Zero +14%; APAC volume +6%; innovation (Orange Creams, Simply Pop)	Positive
Regional trends	Q3: Mexico/China headwinds; Q4: China/Brazil/US strength	NA volume -3%; Mexico softness; India/China growth; targeted affordability/refillables	Mixed; actions in NA/MX
Regulatory/tax	—	Underlying ETR 20.8% in 2025 (global minimum tax)	Higher ETR YoY

Management Commentary

“Our results in the first quarter reflect the continued execution of our all‑weather strategy… we believe we can achieve our 2025 guidance.” — James Quincey, CEO .
“Comparable operating margin increased approximately 130 basis points… driven by underlying expansion and refranchising, partially offset by currency headwinds.” — John Murphy, CFO .
“We’re emphasizing localness and affordability… reinforcing ‘made in’ messaging in markets with sentiment pressure.” — James Quincey .
“Based on current rates… ~2–3‑pt currency headwind to comparable net revenues and ~5–6% headwind to comparable EPS for 2025.” — John Murphy .
“Fairlife growth may moderate near‑term pending capacity additions toward year‑end; long‑term opportunity remains substantial.” — James Quincey .

Q&A Highlights

North America and Mexico: NA volumes -3% on weather/calendar shifts and a false video impacting Coke Original in southern states; Mexico softer on holiday timing and sentiment; response centers on affordability (refillables/value) and localness campaigns .
Margins sustainability: Q1 operating margin strength included timing benefits; management still targets gradual margin expansion over time while investing behind growth and productivity .
Tariffs/FX: Tariff exposure manageable due to local production and hedging; sticking to current U.S. pricing plans; FX headwinds refined to 5–6% EPS for 2025 .
2Q outlook: Tough comp and “choppy” environment expected; KO doesn’t anticipate own supply chain disruptions but sees broader category noise; FY25 guide intact .
fairlife: Final milestone payment made; capacity additions by year‑end to remove constraints; strong dollar sales contribution continues .

Estimates Context

Q1 2025 comparable/primary EPS: $0.73 vs $0.716* consensus (beat); Revenue: $11.129B vs $11.158B* consensus (slight miss) .
Estimate dispersion: EPS (17 ests); Revenue (12 ests). Potential estimate revisions: modest upward bias on EPS given margin execution and FX headwind improvement; revenue likely little changed given structural/FX drags vs solid organic growth .

Note: Consensus estimates from S&P Global.*

Key Takeaways for Investors

Quality beat on EPS with strong margin execution; reported revenue softness reflects FX/refranchising, not demand (organic +6%) .
Near-term narrative: NA/MX volume recovery via affordability/refillables and local engagement, while APAC (India/China) provides growth ballast .
Guidance credibility: FY25 organic +5–6% and CC EPS +7–9% reiterated/updated; FX headwind improved vs February; tax rate up to 20.8% .
Watch Q2 “choppiness,” but H2 benefits include productivity weighting and one extra day in Q4; management leaning into agility .
Cash flow optics distorted by fairlife payment; underlying FCF generation intact (~$9.5B FY25 ex‑fairlife), balance sheet ~2.1x net leverage supports dividend ($0.51 declared) .
Strategic edge persists: portfolio breadth (Zero Sugar momentum), disciplined RGM/AI‑enabled marketing, and local execution should sustain value share gains .

COCA COLA CO (KO)·Q1 2025 Earnings Summary