Keurig Dr Pepper(US:KDP)2025-07-24 13:06PART I - FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements for the quarterly period ended June 30, 2025 Condensed Consolidated Statements of Income Reports a 6.1% increase in Q2 net sales to $4.2 billion and a 9.8% rise in H1 net income to $1.1 billion Condensed Consolidated Statements of Income (Q2 & First Six Months) | (in millions, except per share data) | Q2 2025 | Q2 2024 | YoY Change | First Six Months 2025 | First Six Months 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net sales | $4,163 | $3,922 | 6.1% | $7,798 | $7,390 | 5.5% | | Gross profit | $2,255 | $2,172 | 3.8% | $4,240 | $4,112 | 3.1% | | Income from operations | $898 | $861 | 4.3% | $1,699 | $1,626 | 4.5% | | Net income | $547 | $515 | 6.2% | $1,064 | $969 | 9.8% | | Diluted EPS | $0.40 | $0.38 | 5.3% | $0.78 | $0.70 | 11.4% | Condensed Consolidated Balance Sheets Total assets grew to $54.4 billion, with stockholders' equity increasing to $25.0 billion as of June 30, 2025 Condensed Consolidated Balance Sheet Highlights | (in millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $4,606 | $3,997 | | Goodwill | $20,228 | $20,053 | | Other intangible assets, net | $23,841 | $23,634 | | Total assets | $54,368 | $53,430 | | Total current liabilities | $7,221 | $8,087 | | Long-term obligations | $13,920 | $12,912 | | Total liabilities | $29,383 | $29,187 | | Total stockholders' equity | $24,985 | $24,243 | Condensed Consolidated Statements of Cash Flows Net cash from operations for the first six months decreased to $640 million from $742 million year-over-year Cash Flow Summary (First Six Months) | (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $640 | $742 | | Net cash used in investing activities | $(278) | $(329) | | Net cash used in financing activities | $(409) | $(222) | | Net change in cash, cash equivalents, etc. | $(47) | $191 | Notes to Condensed Consolidated Financial Statements Details significant events including a $2 billion debt issuance, the Dyla acquisition, and ongoing litigation - On May 5, 2025, the company issued an aggregate principal amount of $2 billion in new senior unsecured notes to repay outstanding commercial paper31 - On June 2, 2025, KDP completed the acquisition of Dyla, a powdered drink mix company, for aggregate consideration of $98 million41 - The company is involved in a multidistrict antitrust litigation where plaintiffs claim over $5 billion in damages, for which no loss contingency has been accrued9798 - A restructuring program for network optimization is expected to incur pre-tax charges of $150 million to $170 million through 202699100 Management's Discussion and Analysis of Financial Condition and Results of Operations Analyzes financial results, highlighting a 6.1% Q2 net sales growth driven by the GHOST acquisition Results of Operations Q2 consolidated net sales rose 6.1% to $4.2 billion, driven by the U.S. Refreshment Beverages segment Consolidated Operations Summary (Q2 2025 vs Q2 2024) | ($ in millions) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $4,163 | $3,922 | 6.1% | | Gross profit | $2,255 | $2,172 | 3.8% | | Income from operations | $898 | $861 | 4.3% | | Net income | $547 | $515 | 6.2% | - The acquisition of GHOST was a significant driver of growth, contributing 4.0 percentage points to consolidated volume/mix growth in Q2 2025116128 Consolidated Operations Summary (First Six Months 2025 vs 2024) | ($ in millions) | First Six Months 2025 | First Six Months 2024 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $7,798 | $7,390 | 5.5% | | Gross profit | $4,240 | $4,112 | 3.1% | | Income from operations | $1,699 | $1,626 | 4.5% | | Net income | $1,064 | $969 | 9.8% | Results of Operations by Segment U.S. Refreshment Beverages sales grew 10.5%, while U.S. Coffee sales were flat and International sales declined Net Sales by Segment (Q2 2025 vs Q2 2024) | (in millions) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | U.S. Refreshment Beverages | $2,660 | $2,407 | 10.5% | | U.S. Coffee | $948 | $950 | (0.2)% | | International | $555 | $565 | (1.8)% | - U.S. Coffee segment performance was impacted by a 22.6% decrease in appliance volume and a 3.7% decrease in K-Cup pod volume in Q2 2025127131 - International segment net sales were significantly impacted by unfavorable foreign exchange, which had a negative 7.5% effect in Q2 2025128149 Liquidity and Capital Resources Details a strong liquidity position supported by cash from operations and a $4 billion credit facility - Principal sources of liquidity are cash from operations and a $4 billion revolving credit agreement159 - Net cash provided by operating activities decreased by $102 million in the first six months of 2025 compared to the prior year160 - No common stock was repurchased during the first six months of 2025, with $1,810 million remaining available under the program167 Quantitative and Qualitative Disclosures About Market Risk Reports no material changes to market risk disclosures from the most recent Annual Report on Form 10-K - There have been no material changes to the disclosures on market risk from the company's most recent Annual Report179 Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes in the quarter - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures are effective181 - No material changes to internal control over financial reporting occurred during the quarter ended June 30, 2025182 PART II - OTHER INFORMATION Legal Proceedings Refers to Note 15 for details on commitments, contingencies, and ongoing antitrust litigation - Information regarding legal proceedings is detailed in Note 15 of the Notes to the Unaudited Consolidated Financial Statements185 Risk Factors States no material changes from the risk factors disclosed in the company's Annual Report on Form 10-K - There have been no material changes from the risk factors set forth in the company's Annual Report187 Unregistered Sales of Equity Securities and Use of Proceeds Reports no share repurchases in Q2 2025, with $1.81 billion remaining under the current authorization - The company did not repurchase any shares during the second quarter of 2025 under its authorized share repurchase program188 - As of June 30, 2025, $1,810 million remained available for repurchase under the current $4 billion authorization188 Other Information Confirms no directors or executive officers adopted, modified, or terminated Rule 10b5-1 trading plans in Q2 - No directors or executive officers adopted, modified, or terminated any Rule 10b5-1 trading plans during the second quarter of 2025190 Exhibits Lists all exhibits filed with the Form 10-Q, including certifications and corporate governance documents