Keurig Dr Pepper (NasdaqGS:KDP) Q4 2025 Earnings call February 24, 2026 08:00 AM ET Company ParticipantsAnthony DiSilvestro - CFOChethan Mallela - Senior VP of Finance and Investor RelationsPeter Galbo - Managing Director and Head of U.S. Consumer Staples Equity ResearchTimothy Cofer - CEO and Board of DirectorsConference Call ParticipantsChristopher Carey - Head of Consumer Staples Research and Senior Equity AnalystFilippo Falorni - Director of Equity Research and Lead Beverages and HPC AnalystLauren Liebe ...

Q4 and FY 2025 Results February 24, 2026 1 Forward looking statements Certain statements in this Presentation (this "Presentation") of Keurig Dr Pepper Inc. (the "Company" or "KDP"), including statements relating to the Company's contemplated acquisition (the "Acquisition") of JDE Peet's, N.V. ("JDE Peet's"), the structured manufacturing JV with Apollo Management Holdings, L.P. (together with its affiliates, "Apollo") as the lead investor, in partnership with Kohlberg Kravis Roberts & Co., L.P. (together wi ...

Financial Data and Key Metrics Changes - The company reported a strong enterprise growth with net sales increasing by 7% in Q2, driven by both price and volume mix [12][30] - Gross margin contracted by 110 basis points due to inflationary pressures, despite pricing and productivity savings [32] - EPS grew double digits in Q2, contributing to nearly 10% growth in the first half of the year [32] Business Line Data and Key Metrics Changes - U.S. Refreshment Beverages saw net sales grow almost 11%, with strong performance in carbonated soft drinks led by Doctor Pepper, 7UP, and Canada Dry [14][30] - The energy segment, including brands like Ghost and C4, contributed significantly, with Ghost adding four percentage points to the top line [33][19] - U.S. Coffee segment net sales declined modestly by 0.2%, but showed sequential improvement with a strengthening pod category [35][21] Market Data and Key Metrics Changes - International segment net sales increased by 6%, driven by pricing and market share gains in key categories [28][30] - The company gained market share in the U.S. liquid refreshment beverages, with Doctor Pepper on track for its ninth consecutive year of market share growth [51][30] - The energy portfolio achieved a 7% market share, up from below 1% just a few years ago [19][30] Company Strategy and Development Direction - The company is focused on long-term value creation through five strategic pillars, including brand building and portfolio reshaping [6][5] - The acquisition of Diala brands aims to expand presence in the powdered drink mixes and liquid water enhancers category [9][100] - The company is investing in its direct store delivery (DSD) network to enhance distribution efficiency and support growth [75][72] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from rising cost pressures and consumer caution but remains on track to achieve full-year outlook [5][30] - The company expects some margin pressure in the back half of the year due to inflation and tariffs, but anticipates continued top-line momentum [42][30] - Management expressed confidence in returning the U.S. Coffee segment to consistent long-term growth despite facing challenges [62][21] Other Important Information - The company generated $325 million in free cash flow in Q2, with expectations for further acceleration in the second half [39][30] - The capital allocation strategy remains balanced, focusing on organic and inorganic investments, strengthening the balance sheet, and returning cash to shareholders [40][30] Q&A Session Summary Question: Evolution of U.S. Refreshment Portfolio - Management highlighted strong contributions from both the base business and new partner additions, with expectations for continued robust growth [50][52] Question: Outlook for U.S. Coffee Segment - Management noted sequential improvement in U.S. Coffee but anticipated challenges in the back half due to commodity inflation and tariffs [56][62] Question: Pricing Dynamics in U.S. Liquid Refreshment Beverages - Management confirmed positive contributions from net price realization and emphasized the importance of monitoring consumer behavior in an inflationary environment [79][82] Question: Marketing Changes and ROI - Management discussed a marketing transformation focused on data and digital strategies to enhance consumer engagement and drive demand [90][92] Question: Protein Beverage Space and Diala Acquisition - Management acknowledged the growing consumer interest in health and wellness, including protein beverages, and expressed excitement about the Diala acquisition to penetrate this market [99][100]