Nasdaq:KDP
Keurig Dr Pepper Inc.
A dominant player in the ready-to-drink beverage sector offering a diverse portfolio of branded products with strong distribution networks and recurring consumer demand.
Key Metrics
Investment Thesis
Bull Case
The stock offers attractive exposure to the resilient coffee category with recurring repurchase behavior, robust free cash flow generation supporting a $1.25B dividend payout, and a balanced portfolio that insulates earnings against commodity price volatility.
Bear Case
Investors should be cautious of margin compression from aggressive competitor promotions, the capital intensity of maintaining its vast distribution network requiring $486M in annual capex, and potential dilution risks from significant other financing cash outflows exceeding $2.0B.
About Keurig Dr Pepper Inc.
Keurig Dr Pepper Inc. is a leading North American beverage company specializing in single-serve coffee, water, juice, soda, and energy drinks distributed across grocery, convenience store, foodservice, and vending channels.
Analysis
Management Discussion
Keurig Dr Pepper reported revenue growth of approximately 8% year-over-year to $16.60B driven by volume expansion and strategic pricing, while net income reached $2.08B despite elevated operating expenses of $5.42B and a substantial cash flow from operations of $1.99B.
Industry Overview
The ready-to-drink beverage industry is characterized by high consumer brand loyalty but fierce competition for shelf space and advertising dollars, with single-serve convenience driving growth while health-conscious trends reshape product formulations.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $14.06B | $14.81B | $15.35B | $16.60B |
| Cost of Revenue | $6.73B | $6.73B | $6.82B | $7.60B |
| Gross Profit | $7.32B | $8.08B | $8.53B | $9.00B |
| Operating Expenses | $4.72B | $4.89B | $5.94B | $5.42B |
| Operating Income | $2.60B | $3.19B | $2.59B | $3.58B |
| R&D | $65.0M | $66.0M | $70.0M | $70.0M |
| G&A | $4.64B | $4.91B | $5.01B | $5.35B |
| Stock-Based Comp | $52.0M | $116.0M | $98.0M | $97.0M |
| Depreciation | $399.0M | $402.0M | $422.0M | $455.0M |
| Amortization | $138.0M | $137.0M | $133.0M | $138.0M |
| Other OpEx | $8.0M | $-90.0M | $855.0M | $3.0M |
| Non-Operating Income | $-886.0M | $-435.0M | $-677.0M | $-888.0M |
| Interest Expense | $693.0M | $496.0M | — | — |
| Pre-Tax Income | $1.72B | $2.76B | $1.91B | $2.69B |
| Income Tax | $284.0M | $576.0M | $473.0M | $608.0M |
| Continuing Ops | $1.44B | $2.18B | $1.44B | $2.08B |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $1.44B | $2.18B | $1.44B | $2.08B |
| Minority Interest | $-1.0M | $0 | $0 | $0 |
| Net to Common | $1.44B | $2.18B | $1.44B | $2.08B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $3.80B | $3.38B | $4.00B | $5.27B |
| Cash & Equivalents | $535.0M | $267.0M | $510.0M | $1.03B |
| Accounts Receivable | $1.48B | $1.37B | $1.50B | $1.67B |
| Inventory | $1.31B | $1.14B | $1.30B | $1.73B |
| Prepaid Expenses | $471.0M | $598.0M | $606.0M | $818.0M |
| Other Current Assets | $0 | $0 | $80.0M | $18.0M |
| Long-Term Assets | $48.03B | $48.76B | $49.43B | $50.19B |
| PP&E (Net) | $2.49B | $2.70B | $2.96B | $3.23B |
| Intangibles | $23.18B | $23.29B | $23.63B | $23.73B |
| Goodwill | $20.07B | $20.20B | $20.05B | $20.25B |
| Operating Leases | $881.0M | $876.0M | $880.0M | $845.0M |
| Other LT Assets | $406.0M | $304.0M | $359.0M | $486.0M |
| Total Assets | $51.84B | $52.13B | $53.43B | $55.46B |
| Current Liabilities | $8.08B | $8.92B | $8.09B | $8.29B |
| Accounts Payable | $5.21B | $3.60B | $2.98B | $3.00B |
| Current Debt | $496.0M | $1.15B | $1.03B | $895.0M |
| Current Leases | $100.0M | $114.0M | $128.0M | $127.0M |
| Taxes Payable | $87.0M | $29.0M | $67.0M | — |
| Other Current Liab | $753.0M | $2.48B | $1.99B | $2.89B |
| Long-Term Liabilities | $18.64B | $17.54B | $21.10B | $21.65B |
| Long-Term Debt | $11.07B | $9.95B | $12.91B | $13.04B |
| LT Operating Leases | $803.0M | $793.0M | $790.0M | $764.0M |
| Other LT Liab | $6.76B | $6.80B | $7.40B | $7.85B |
| Total Liabilities | $26.71B | $26.45B | $29.19B | $29.94B |
| Shareholders' Equity | $25.12B | $25.68B | $24.24B | $25.52B |
| Retained Earnings | $3.54B | $4.56B | $4.79B | $5.62B |
| AOCI | $129.0M | $315.0M | $-276.0M | $102.0M |
| Total L&E | $51.84B | $52.13B | $53.43B | $55.46B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $1.44B | $2.18B | $1.44B | $2.08B |
| Non-Cash Adjustments | $-1.16B | $-732.0M | $-278.0M | $-1.73B |
| Working Capital Changes | $2.56B | $-120.0M | $1.06B | $1.65B |
| Cash from Operations | $2.84B | $1.33B | $2.22B | $1.99B |
| Capital Expenditures | $353.0M | $425.0M | $563.0M | $486.0M |
| Cash from Investing | $-1.14B | $-784.0M | $-1.61B | $-573.0M |
| Share Buybacks | $379.0M | $706.0M | $1.11B | $9.0M |
| Dividends Paid | $1.08B | $1.14B | $1.19B | $1.25B |
| Cash from Financing | $-1.73B | $-832.0M | $-223.0M | $-999.0M |
| FX Effect | $-7.0M | $19.0M | $-41.0M | $17.0M |
| Net Change in Cash | $-26.0M | $-287.0M | $382.0M | $419.0M |
| Beginning Cash | $568.0M | $535.0M | $267.0M | $608.0M |
| Ending Cash | $535.0M | $267.0M | $608.0M | $1.04B |
Frequently Asked Questions
How does Keurig Dr Pepper Inc. make money?
The company generates revenue primarily through its Coffee segment (single-serve pods and beverages), Water segment (purified water and sparkling waters), Soft Drinks segment (sodas, teas, and energy drinks), and Juice segment (juice concentrates and finished beverages).
What are the main risks for KDP?
Intense price competition from private label brands and international giants like Coca-Cola and PepsiCo, rising input costs for packaging materials and commodities, regulatory pressures regarding sugar content and plastic usage, and potential shifts in consumer preferences away from traditional soft drinks.
What is KDP's competitive advantage?
Extensive distribution reach spanning over 100,000 retail locations, a highly diversified product portfolio that mitigates single-category risks, and significant brand equity in the growing single-serve coffee market.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.