KO · Q4 2025 Earnings

Cautious

Coca-Cola Company (The)

Reported February 10, 2026

30-second summary

30-second take: Coca-Cola closed 2025 with Q4 revenue of $11.82B (+2% YoY), organic revenue growth of +5%, and +1% unit case volume. Headline price/mix printed +1, but CFO John Murphy attributed that to ~+4 points of underlying pricing offset by ~-3 points of unfavorable business/category/timing mix — management explicitly asked analysts to take a four-quarter view, under which underlying pricing has held. FY FCF ex-fairlife of $11.4B blew through the ≥$9.8B guide by $1.6B, the standout positive, and comparable currency-neutral EPS grew 9% for the full year, beating the ~8% guide. FY2026 organic revenue guidance of 4–5% is one point below the FY2025 guide range of 5–6% but is characterized by management (both Henrique Braun and John Murphy) as "in line with our long-term growth algorithm." The new CEO's framing — "our innovation today is not where it needs to be" — replaces the algorithm-confidence posture with an explicit execution-gap admission.

Headline numbers

EPS

Q4 FY2025

$0.58

Revenue

Q4 FY2025

$11.82B

+2.0% YoY

Gross margin

Q4 FY2025

60.1%

Operating margin

Q4 FY2025

15.6%

Key financials

Q4 FY2025

Metric	Q4 FY2025	YoY	Q3 FY2025	QoQ
Revenue	$11.82B	+2.0%	$12.46B	-5.1%
EPS	$0.58	—	$0.82	-29.3%
Gross margin	60.1%	—	61.5%	-142bps
Operating margin	15.6%	—	32.0%	-1640bps

Guidance

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Organic Revenue Growth	FY 2025	5% to 6%	5%	at low end of prior guide	Beat
Comparable Currency Neutral EPS Growth	FY 2025	approximately 8%	3.9%	-4.1pts below guide	Missed
Comparable Net Revenues Currency Impact	FY 2025	1% to 2% headwind	currency headwind occurred in FY2025	FY2025 guidance showed headwind; FY2026 now expects tailwind reversal	Missed
Comparable EPS Currency Impact	FY 2025	approximate 5% headwind	~5% headwind	in-line	Met
Free Cash Flow (excluding fairlife contingent payment)	FY 2025	at least $9.8 billion	$11.4 billion	+$1.6B above guide	Beat

New guidance

Metric	Period	Guide	YoY
Comparable Currency Neutral EPS Growth	FY 2026	5% to 6%	—
Comparable EPS Growth (as-reported, non-GAAP)	FY 2026	7% to 8%	—
Comparable Net Revenues Currency Impact	FY 2026	1% tailwind	—
Comparable EPS Currency Impact	FY 2026	3% tailwind	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Organic Revenue Growth	FY 2026	5% to 6%	4% to 5%	-1pt midpoint reduction	Raised
Acquisitions and Divestitures Headwind to Net Revenues	FY 2026	approximately 1%	approximately 4%	+3pts headwind increase	Raised

Reaffirmed unchanged this quarter: Underlying Effective Tax Rate (20.7%)

Segment performance

Q4 FY2025

Segment	Q4 FY2025	YoY
Bottling Investments	$1.515B	-2.0%

Platform metrics

Q4 FY2025

Segment	Q4 FY2025
Unit Case Volume Growth	1%
Organic Revenue Growth (Non-GAAP)	5%
Price/Mix Growth	1%
Concentrate Sales Growth	4%
Market Share (NARTD Beverages)	Gained value share

Profitability

Q4 FY2025

Segment	Q4 FY2025
Comparable Operating Margin (Non-GAAP)	24.4%
Comparable Currency Neutral Operating Income Growth (Non-GAAP)	13%
Free Cash Flow Excluding fairlife Payment (Non-GAAP)	$11.4B (FY)

Other KPIs

Q4 FY2025

Segment	Q4 FY2025	YoY
EMEA	$2.684B	+4.0%
Latin America	$1.697B	+3.0%
North America	$4.943B	+4.0%
Asia Pacific	$1.139B	-7.0%

Management tone

Q1 algorithm confidence → Q2 "all-weather" defensive pivot → Q3 structural consumer pressure + 2026 restructuring telegraph → Q4 new-CEO innovation-gap admission

The most consequential tone shift in this print is generational: Henrique Braun's first earnings address as CEO-elect opens with an unusually candid admission — "our innovation today is not where it needs to be" — that breaks with three quarters of escalating but still-defensive language. Prior calls leaned on "all-weather strategy," "we doubled down," "50 years of volume growth." This quarter the new CEO actively dismantles that posture: "While we are proud of what we have accomplished, future success is never guaranteed. We must remain discontented." For a company whose Q3 narrative ended with James saying "the future belongs to the discontented," Henrique is now operationalizing that phrase as a self-criticism, not an aspiration.

The volume framing has shifted across four quarters from achievement to anxiety. Q2 emphasized concentrate-vs-cases timing; Q3 celebrated +1% volume as internal-execution-driven; Q4 frames volume as "a key priority" requiring focus. The press release leans on the 50-year historical context ("annual volume declined only once") precisely because the current trajectory needs that history to look reassuring. That is a rhetorical tell — strong franchises don't need to invoke five decades of history to defend a flat year.

The 2026 organic guide of 4–5% is the operational reflection of this tone shift. Management labels it "in line with our long-term growth algorithm," but it is one point below the FY2025 guide range, and the underlying comparable currency-neutral EPS growth (ex-M&A) of 5–6% is a step down from the ~8% delivered in 2025.

The 2026 restructuring James telegraphed in Q3 did not get quantified scope in this Q4 print — no charge, no headcount envelope, no productivity number. Management deferred more detail to next week's CAGNY presentation. The placeholder remains open.

Confidence in the FCF beat is genuine. The $11.4B vs ≥$9.8B guide is the cleanest positive number in the print, and management's $12.2B FY2026 FCF guide implies they expect that strength to continue.

Recurring themes management leaned on this quarter:

Volume stabilization as critical focus after flat 2025Innovation acceleration and speed-to-market improvementDigital transformation as core operating model evolutionConsumer targeting shift toward young adultsValue offerings and pricing architecture adaptationSystem alignment and bottler partnership leverage

Risks management surfaced:

Softer consumer spending, particularly lower-income consumers under microeconomic pressureWeaker industry performance in Asia PacificVolatility in commodity costs and global trade dynamicsCurrency headwinds (5 points in Q4, though 2026 guidance assumes tailwind)Pending regulatory approvals for Coca-Cola Beverages Africa divestiture

Q&A highlights

Dara Mosenian · Morgan Stanley

Requesting breakdown of 4-5% organic sales growth guidance for 2026 between price/mix and volume, with context on normalized price mix run rate after Q4's geographic/timing headwinds and volume prospects given Mexico tax drag and difficult consumer environment.

Management emphasized four-quarter view showing 4% underlying pricing and 1% volume in Q4, with mixed components evened out over four quarters. For 2026, expects more balanced mix of volume and price as inflation moderates, with growth still top-line driven but requiring improvement in specific geographies (Brazil, India, China, ASEAN, Europe) and absorbing Mexican tax headwind starting now.

Q4 pricing: 1% reported, 4% underlying; 3% negative mixFour-quarter blended result: 4% underlying price, 1% volume2026 target: balanced volume/price mixMexican tax headwind beginning now, expected to persist

Steve Powers · Deutsche Bank

Asking how macro 'light drizzle' conditions mentioned in December have evolved and what emerging vs developed market contributions are embedded in the 4-5% 2026 organic growth guidance.

Management reaffirmed 'light drizzle' characterization remains apt. Highlighted that volume-driving markets (India, China, ASEAN, Europe) need improvement and will ramp through the year. Expects more price at beginning of 2026, shifting toward balance as year progresses and volume builds. Mexican tax impact heavier in Q1, mitigating thereafter.

'Light drizzle' macro characterization still validIndia, China, ASEAN, Europe identified as needing rebuildingMore price expected early year, volume balance improving through yearMexican tax most impactful in Q1

Lauren Lieberman · Barclays

Questioning whether North America's 30% operating margin achievement represents sustainable structural change or if management views it as elevated, and seeking clarification on long-term margin expansion opportunity.

Management stated that 60 basis points per year operating margin expansion over last eight years is 'not a fluke' driven by supply chain, marketing, and operational levers. North America highlighted as star performer with continued opportunity ('get a little bit better every day'). Long-term algorithm implies modest expansion going forward; deeper dive planned for investor day.

60 basis points average annual operating margin expansion over 8 yearsNorth America 30% margin achievementMultiple margin expansion levers: supply chain, marketing investment, operational executionLong-term algorithm expects modest continued expansion

Filippo Falorni · Citi

Seeking details on 2026 North America growth expectations, including fairLife capacity ramp timing, World Cup activation upside, and carryover benefit from Q1 2025 Hispanic consumer headwind resolution.

Management highlighted North America positive momentum entering 2026 with sequential improvement throughout 2025. Fairlife continued momentum, Powerade and Body Armor gaining share and volume. Core sparkling and Coca-Cola trademark growing. Plans in place to build on 2025 momentum given consumer resilience despite low-income pressure.

Fairlife momentum continuingPowerade and Body Armor gaining share and volumeCore sparkling and Coca-Cola trademark growingSequential improvement trajectory from 2025

Rob Odenstein · Evercore

Requesting explanation of FX guidance assumptions (1% NSR tailwind, 3% net income benefit), hedging philosophy, and outlook for 2027 FX contribution.

Management explained hedging program strategy balances local market growth investment with enterprise dollar earnings growth. 2026 FX tailwind driven by weaker dollar in emerging markets (Latin America, South Africa). Well-hedged on G10 currencies through 2026; emerging market hedging limited by economics. G10 hedging provides local market operational clarity; emerging market decisions tied to economic viability.

2026 FX guidance: 1% NSR, 3% net income benefitWeaker dollar in Latin America and South Africa driving tailwindWell-hedged through 2026 on G10 currenciesEmerging market hedging economically constrained

Answers to last quarter's watch list

Q4 comparable EPS vs the reaffirmed FY ~3% guide given the FX tailwind flip — FY reported comparable EPS came in at $3.00, +4% vs $2.88 in 2024, ahead of the ~3% guide. Comparable currency-neutral EPS grew +9% for the full year, beating the ~8% guide. Status: Resolved positively

2026 restructuring announcement scope and timing — The Q4 print does not quantify any restructuring charge, headcount action, or productivity envelope. Management telegraphed AI/agentic deployment and innovation-gap remediation in qualitative terms only and deferred specifics to next week's CAGNY presentation. Status: Not resolved

Mexico ahead of January 2026 sugar tax — Latin America posted +3% revenue in Q4, snapping two consecutive -4% quarters and resolving the negative-trajectory concern. Management flagged in Q&A that the Mexican tax headwind begins now and is heaviest in Q1 2026, so the test moves forward — but the Q4 read is materially better than feared. Status: Resolved positively

Price/mix decomposition in Q4 — Headline price/mix printed +1, but CFO John Murphy explicitly attributed that to ~+4 points of underlying pricing offset by ~-3 points of unfavorable business/category/timing mix. Management asked analysts to take a four-quarter view, under which underlying pricing has held in the +4 range. The 2026 organic guide of 4–5% is one point below the FY2025 range, but management characterizes it as in line with the long-term algorithm. Status: Mixed

Free cash flow execution against the raised ≥$9.8B FY guide — FCF ex-fairlife of $11.4B beat the guide by $1.6B, the cleanest positive in the print. The FY2026 guide of ~$12.2B implies management expects the strength to continue. Status: Resolved positively

Comparable operating margin in Q4 vs the 31.9% Q3 print — Comparable operating margin was 24.4% in Q4 versus 24.0% in the prior year (+40bps YoY), with the sequential step-down from Q3 reflecting normal Q4 seasonality. FY comparable operating margin landed at 31.2%, +120bps YoY. Status: Resolved positively

What to watch into next quarter

Q1 FY2026 organic revenue growth against the 4–5% FY guide, given +6 calendar days (about half offset by concentrate timing per CFO), +2% FX tailwind, and Mexico tax headwind landing heaviest in Q1 — anything materially below mid-single-digit reported revenue growth in Q1 puts the FY guide at risk on the first print under Henrique.

Whether Q1 price/mix builds back toward a more balanced volume/price split — James told analysts to expect a little more price at the beginning of 2026 and a little more balance towards the end of the year. Watch the four-quarter trailing mix line.

2026 restructuring announcement quantification at CAGNY next week or on the Q1 print — still unscoped after two quarters of telegraphing. Continued vagueness is itself a signal.

Asia Pacific reversion after Q4's -7% — the swing from +11% in Q3 to -7% in Q4 is too large to be noise. Watch whether Q1 stabilizes (timing/cycling) or extends negative (structural).

Fairlife capacity ramp at the New York facility — management reaffirmed momentum continuing in Q&A but did not quantify when capacity unlock translates into incremental North America revenue. Watch for an explicit capacity or revenue number on the next call.

Whether 5–6% comparable currency-neutral EPS growth ex-M&A is the new run-rate or a 2026 reset — the company delivered +9% in 2025 against an ~8% guide. If 2026 prints at the low end of the new 5–6% range, the algorithm conversation at the next investor day will need to be explicit.

Sources

Coca-Cola Q4 FY2025 Earnings Release, SEC filing — https://www.sec.gov/Archives/edgar/data/21344/000162828026006642/a2025q4earningsreleaseex-9.htm
Tapebrief Q3 FY2025 KO brief — prior-quarter guidance baseline and watch list
Tapebrief Q2 FY2025 KO brief — multi-quarter tone arc baseline

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