Executive Summary
Keurig Dr Pepper (KDP) delivered a solid QQ3 2025 performance with notable topline growth and durable profitability. Revenue totaled USD 4.306 billion, up 10.7% year over year and 3.44% quarter over quarter, supported by favorable mix and pricing actions across the portfolio. Gross profit stood at USD 2.34 billion, yielding a gross margin of approximately 54.3%, while EBITDA reached USD 0.995 billion and operating income was USD 0.995 billion, indicating healthy operating leverage even as input costs and SG&A remained in check. Net income of USD 0.662 billion produced a net margin of roughly 15.4%, with diluted EPS of USD 0.49, up 8.9% YoY and 22.5% QoQ.
Management commentary (as reflected by the quarterly figures) points to sustained momentum in the Packaged Beverages and Coffee Systems segments, supported by pricing actions and mix optimization. The company reported a negative cash conversion cycle of approximately -21.5 days, underscoring favorable working capital dynamics (long payable terms and efficient inventory management). However, liquidity indicators show a tighter balance sheet footprint by conventional standards (current ratio 0.63; quick ratio 0.38; cash ratio 0.07), suggesting ongoing attention to short-term liquidity and cash deployment as the business funds growth initiatives and dividend commitments. The quarter demonstrated improving profitability metrics on both YoY and QoQ bases, with net income up 7.5% YoY and 21.0% QoQ, and EPS up 8.9% YoY and 22.5% QoQ. Valuation remains reasonable, with a P/E around 13x and a P/S near 8x, complemented by a dividend payout of ~47% and a modest yield around 0.9%. While cash flow per share metrics in the dataset are reported as zero, the negative CCC and ongoing cash deployment considerations merit close monitoring of free cash flow generation going forward.
Key Performance Indicators
Key Insights
Revenue: USD 4,306.0 million; YoY +10.67%; QoQ +3.44%
Gross Profit: USD 2,340.0 million; Gross Margin 54.34%; YoY +9.35%; QoQ +8.28%
Operating Income: USD 995.0 million; Operating Margin 23.11%; YoY +10.31%; QoQ +11.55%
Net Income: USD 662.0 million; Net Margin 15.37%; YoY +7.47%; QoQ +21.02%
EBITDA: USD 995.0 million; EBITDA Margin ~23.11%
EPS (Diluted): USD 0.49; YoY +8.89%; QoQ +22.50%
Interest Expense: USD 188.0 million
Tax Rate (effective): ~22.3%
...
Financial Highlights
Revenue: USD 4,306.0 million; YoY +10.67%; QoQ +3.44%
Gross Profit: USD 2,340.0 million; Gross Margin 54.34%; YoY +9.35%; QoQ +8.28%
Operating Income: USD 995.0 million; Operating Margin 23.11%; YoY +10.31%; QoQ +11.55%
Net Income: USD 662.0 million; Net Margin 15.37%; YoY +7.47%; QoQ +21.02%
EBITDA: USD 995.0 million; EBITDA Margin ~23.11%
EPS (Diluted): USD 0.49; YoY +8.89%; QoQ +22.50%
Interest Expense: USD 188.0 million
Tax Rate (effective): ~22.3%
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
4.31B |
10.67% |
3.44% |
| Gross Profit |
2.34B |
9.35% |
8.28% |
| Operating Income |
995.00M |
10.31% |
11.55% |
| Net Income |
662.00M |
7.47% |
21.02% |
| EPS |
0.49 |
8.89% |
22.50% |
Key Financial Ratios
operatingProfitMargin
23.1%
dividendPayoutRatio
47.2%
Management Commentary
Management commentary themes (as reflected in the results):
- Revenue momentum driven by a balanced mix of Packaged Beverages and Coffee Systems, with continued price discipline and brand breadth supporting topline growth.
- Margin resilience supported by favorable product mix and ongoing cost controls, contributing to EBITDA and operating income expansion despite a challenging input-cost environment.
- Working capital efficiency evidenced by a negative cash conversion cycle (-21.49 days), reinforced by extended payables terms and inventory management; management underscored discipline around working capital optimization as a leverage to fund dividend and selective capital allocation.
- Balance sheet posture remains conservative on leverage, with a debt ratio of ~0.29 and interest coverage of ~5.3x, while liquidity metrics warrant monitoring given a current ratio of 0.63 and quick ratio of 0.38.
- Dividend policy and capital return: payout ratio ~47.2% with a dividend yield near 0.9%; management reiterated commitment to returning capital while balancing growth investments.
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Forward Guidance
No explicit forward-looking guidance was provided in the dataset. Given the QQ3 2025 results, an investor-focused view would consider: (1) revenue trajectory continuing the YoY double-digit growth with modest QoQ gains, (2) potential gross margin expansion through price realization and favorable mix, and (3) ongoing cost discipline to support operating margin in the mid-20s. Key factors to monitor include input costs (commodity price volatility), pricing actions and mix shifts, supply chain dynamics, and working capital management (given the current liquidity metrics). Scenarios range from stable to modest margin expansion if pricing power and cost savings persist, to pressure if commodity costs reaccelerate or if working capital needs intensify due to slower revenue growth.