Executive Summary

Q3 2025 delivered resilient top-line and margin execution: net revenues up 5% to $12.455B, comparable EPS up 6% to $0.82 despite a 6-point FX headwind; global unit case volume grew 1% and price/mix rose 6% .
Results modestly beat Wall Street consensus: revenue $12.455B vs $12.411B estimate (+$44.9M), comparable EPS $0.82 vs $0.779 estimate; prior two quarters showed an EPS beat and a slight revenue miss in Q2, and small beats in Q1 (values from S&P Global)*.
Guidance broadly maintained with two notable updates: underlying effective tax rate trimmed to 20.7% (from 20.8%) and free cash flow excluding the fairlife contingent payment raised to at least $9.8B; Q4 comparable net revenues expected to see a slight FX tailwind, while comparable EPS faces a 4–5% FX headwind .
Strategic refranchising continues: Coca‑Cola HBC to acquire a controlling stake in Coca‑Cola Beverages Africa; sold 40% of Indian bottler stake to Jubilant Bhartia Group—a catalyst for structurally higher margins and system capabilities over time .

What Went Well and What Went Wrong

What Went Well

Comparable operating margin expanded YoY to 31.9% (+115 bps), with operating income up 59% on GAAP and up 15% on a comparable currency-neutral basis, driven by organic revenue growth and productivity initiatives .
Category and brand momentum: Coca‑Cola Zero Sugar grew 14% globally; North America saw sequential improvement and value share gains; innovation and targeted RGM supported mix and pricing .
Cash generation improving: YTD free cash flow excluding the fairlife contingent payment reached $8.5B, and FY25 FCF (ex-fairlife payment) guidance increased to ≥$9.8B, demonstrating confidence in cash conversion .

“While the overall environment has continued to be challenging, we’ve stayed flexible — adapting plans where needed and investing for growth… We’re confident we can deliver on our 2025 guidance” — James Quincey, CEO .

What Went Wrong

Latin America softness and FX pressure: reported net revenues declined 4% and reported operating income fell 4% YoY; Mexico remains under macro pressure despite interventions .
Asia Pacific volume −1% with mix/inflation/weather dynamics; strong price/mix (+8%) masked softer consumer trends in several markets (India, ASEAN) .
Currency headwinds: comparable EPS absorbed a 6-point FX headwind in Q3; Q4 guidance flags a further 4–5% FX headwind on comparable EPS growth .

Financial Results

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Billions)	$11.1	$12.5	$12.455
GAAP EPS ($)	$0.77	$0.88	$0.86
Comparable EPS ($)	$0.73	$0.87	$0.82
Operating Margin (%)	32.9%	34.1%	32.0%
Comparable Operating Margin (%)	33.8%	34.7%	31.9%
Unit Case Volume (% YoY)	+2%	−1%	+1%
Price/Mix (% YoY)	+5%	+6%	+6%
Concentrate Sales (% YoY)	+1%	−1%	0%

Segment performance (Q3 2025):

Segment	Net Operating Revenues ($MM)	YoY %	Operating Income ($MM)	YoY %
Europe, Middle East & Africa	$2,996	+10%	$1,097	+10%
Latin America	$1,573	−4%	$897	−4%
North America	$5,253	+4%	$1,681	+15%
Asia Pacific	$1,506	+11%	$521	+13%
Bottling Investments	$1,346	+2%	$57	+32%
Corporate	$34	+63%	$(271)	+80%
Consolidated	$12,455	+5%	$3,982	+59%

KPIs and drivers (Q3 2025):

KPI	Consolidated	EMEA	Latin America	North America	Asia Pacific	Bottling Investments
Unit Case Volume (% YoY)	+1%	+4%	0%	0%	−1%	+2%
Price/Mix (% YoY)	+6%	+4%	+7%	+6%	+8%	+1%
Concentrate Sales (% YoY)	0%	+3%	−3%	−2%	−1%	+5%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Organic Revenue Growth (Non‑GAAP)	FY 2025	5%–6%	5%–6%	Maintained
Comparable Net Revenues FX Impact	FY 2025	1%–2% headwind (improved from 2%–3% in Q1 )	1%–2% headwind	Maintained vs Q2; improved vs Q1
Underlying Effective Tax Rate (Non‑GAAP)	FY 2025	20.8%	20.7%	Lowered
Comparable Currency‑Neutral EPS Growth (Non‑GAAP)	FY 2025	~8%	~8%	Maintained
Comparable EPS Growth (Non‑GAAP) vs $2.88 base	FY 2025	~3%	~3%	Maintained
FCF ex fairlife contingent payment	FY 2025	~$9.5B	≥$9.8B	Raised
Comparable Net Revenues FX Impact	Q4 2025	—	Slight FX tailwind	New
Comparable EPS FX Impact	Q4 2025	—	4%–5% FX headwind	New
2026 FX Considerations	FY 2026	—	Slight FX tailwind to comparable net revenues and EPS	New

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Pricing/mix and inflation	Price/mix +5% in Q1; +6% in Q2 as inflationary pricing abated	Price/mix +6%; mix supported by premium brands; inflation moderating	Stable/mix-supportive
Supply chain/productivity	Timing of marketing and productivity aided margins	CFO cites supply chain efficiencies and advertising spend productivity as margin drivers	Improving
Refranchising strategy	Ongoing refranchising (India, Philippines) and structural impacts	Announced CCHBC to acquire CCBA; sold 40% of Indian bottler stake—final large steps to “world’s smallest bottler”	Structural tailwind to margins
Latin America/Mexico	Q1 and Q2: Mexico under pressure; Latin America mixed	Latin America reported −4% revenue; interventions ongoing; Mexico still not “where we want it”	Challenged
Asia-Pacific	Q1 volume +6% and Q2 −3%; FX/headwinds	Volume −1%; mix/price up; weather and softer spend in India/ASEAN; mix effects explained	Mixed
North America consumer	Q1 declines; Q2 volume −1%	Sequential volume improvement; premiumization and affordability (mini cans ~$1B revenue)	Improving
GLP‑1 impact and protein	—	Less full sugar; more diet/hydration/coffee/protein; fairlife capacity +30% coming online in 2026	Structural mix shift
Regulatory/legal (IRS case)	Underlying tax rate guided at 20.8% in Q1/Q2	3M appellate decision supportive; underlying tax rate now 20.7%	Slight positive
AI/technology	—	“Bring in AI and agentic tech” to drive productivity; potential 2026 restructuring to fund growth	Emerging lever
FX	Headwinds in Q1/Q2; Q2 EPS FX −5%	Q3 comparable EPS FX −6%; Q4 EPS FX −4% to −5% headwind; 2026 slight FX tailwind	Headwind near‑term

Management Commentary

Strategy and execution: “Organic revenue growth continued to be at the high end of our long-term growth model… ongoing efficiency and effectiveness initiatives drove comparable operating margin expansion” — James Quincey .
Refranchising nearing completion: “With the two deals… Jubilant Bhatia Group in India and Hellenic relative to CCBA… the last two large pieces… now have a system… set up to drive growth well into the future” — James Quincey .
Margin drivers: “Third quarter comparable EPS of $0.82 increased 6%… driven by productivity, supply chain efficiencies, advertising spend effectiveness, and prudent expense” — John Murphy .
North America plan: “We’re tackling affordability and premiumization… mini cans already represent $1 billion in revenue” — Henrique Braun .
Long-term posture: “We will be discontented with ourselves and… do some restructuring of the organization in 2026… to generate funds for growth” — James Quincey .

Q&A Highlights

Early-quarter softness improved via execution, not macro tailwinds; plan to invest into Q4 with holiday marketing, aiming to sustain momentum despite tougher comps .
Refranchising and margin trajectory: final large refranchising steps (India, Africa) support margin uplift alongside ongoing cost discipline; mid‑30s margins are in sight over time .
Latin America/Mexico: interventions underway; progress in Brazil; Mexico remains pressured and will take time to recover .
GLP‑1 impact: mix shift toward diet, hydration, coffee, protein; fairlife plant to add ~30% capacity in 2026, easing allocations and supporting growth .
Competitive landscape: management intends to “double down” and extend leadership while competitors address structural changes; focus is on transforming from strength .

Estimates Context

Metric	Q1 2025 Estimate*	Q1 2025 Actual	Surprise	Q2 2025 Estimate*	Q2 2025 Actual	Surprise	Q3 2025 Estimate*	Q3 2025 Actual	Surprise
Revenue ($USD Billions)	$11.158*	$11.1	−$0.03B	$12.576*	$12.5	−$0.04B	$12.411*	$12.455	+$0.045B
Primary EPS ($)	$0.716*	$0.73 (Comparable EPS)	+$0.014	$0.837*	$0.87 (Comparable EPS)	+$0.033	$0.779*	$0.82 (Comparable EPS)	+$0.041

Values retrieved from S&P Global.*

Key Takeaways for Investors

Mix/pricing resilience and productivity offset FX, driving EPS and margin outperformance versus consensus; expect near‑term FX drag on Q4 EPS but slight FX tailwind in 2026 .
Structural margin story intact: refranchising milestones (CCBA, India) plus supply chain and marketing productivity underpin sustained margin expansion into the mid‑30s over time .
North America momentum is building via premiumization (Topo Chico, smartwater, fairlife) and affordability architecture (mini cans), supporting volume stabilization and mix .
Watch Latin America (Mexico tax effective Jan 1, 2026) and Asia weather/macro for near‑term volatility; management is actively adapting RGM and execution to local dynamics .
Cash generation is strong; raised FY25 FCF (ex‑fairlife) guidance to ≥$9.8B supports reinvestment and returns, with net leverage at 1.8x EBITDA below target range .
GLP‑1 tailwinds to protein/diet/hydration categories favor KO’s portfolio; fairlife capacity expansion in 2026 is a medium‑term growth driver .
Near‑term trading: modest beat on Q3, FX headwinds into Q4, and refranchising announcements are key narrative drivers; medium‑term thesis rests on structural margin uplift, disciplined RGM, and cash flow strength .

COCA COLA CO (KO)·Q3 2025 Earnings Summary