KO · Q4 2025 Earnings

Cautious

Coca-Cola Company (The)

Reported February 10, 2026

30-second summary

30-second take: Coca-Cola closed FY2025 with Q4 organic revenue growth of 5% on +1% unit case volume and +1% price/mix (4 points pricing, -3 mix), with comparable operating margin at 24.4% and non-GAAP EPS of $0.58. James Quincey remains CEO at this print; CEO-elect Henrique Braun delivered strategic commentary while CFO John Murphy delivered the FY2026 guide, which sets initial FY2026 organic revenue growth at 4–5% and currency-neutral EPS growth (ex-M&A) at 5–6%, with a 3% FX tailwind lifting reported comparable EPS growth to 7–8% versus $3.00 in 2025 and FCF guidance to ~$12.2B. The FY2026 organic revenue range sits one point below the 5–6% framework that governed FY2025 (delivered at 5%), and management explicitly framed the new range as a deliberately prudent posture given Mexico tax headwinds and the need for volume recovery in India, China, ASEAN, and Europe. The tone shift is the story: incoming leadership explicitly framed innovation as underperforming and volume as "a key priority," replacing the algorithm-confidence posture with a transformation narrative.

Headline numbers

EPS

Q4 FY2025

$0.58

Revenue

Q4 FY2025

$11.82B

+2.4% 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	+2.4%	$12.46B	-5.1%
EPS	$0.58	—	$0.82	-29.3%
Gross margin	60.1%	—	61.5%	-144bps
Operating margin	15.6%	—	32.0%	-1642bps

Guidance

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

New guidance

Metric	Period	Guide	YoY
Currency tailwind to comparable net revenues	FY2026	Approximately 1%	—
Headwind from acquisitions and divestitures to comparable net revenues	FY2026	Approximately 4%	—
Currency tailwind to comparable EPS	FY2026	Approximately 3%	—
Headwind from acquisitions and divestitures to comparable EPS	FY2026	Approximately 1%	—
Capital expenditures	FY2026	Approximately $2.2 billion	—
Cash flow from operations	FY2026	Approximately $14.4 billion	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
EPS (non-GAAP)	FY2025	$2.96	$3.00	+$0.04 (+1.4%)	Raised
Organic revenue growth	FY2026	5% to 6%	4% to 5%	-100 to -100 bps	Lowered
Comparable currency neutral EPS (non-GAAP) growth	FY2026	approximately 8%	5% to 6%	-200 to -300 bps	Lowered
Free cash flow	FY2026	at least $9.8 billion (excluding fairlife contingent consideration)	approximately $12.2 billion	+$2.4 billion (+24.5%)	Raised
Underlying effective tax rate (non-GAAP)	FY2026	20.7%	20.9%	+20 bps	Raised
Comparable EPS (non-GAAP) growth	FY2026	approximately 3% (vs. $2.88 in FY2024)	7% to 8% (vs. $3.00 in FY2025)	+400 to +500 bps	Raised

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%
Coca-Cola Zero Sugar Volume Growth	13%
Market Share Performance	Gained value share in total NARTD beverages

Profitability

Q4 FY2025

Segment	Q4 FY2025
Comparable Operating Margin (Non-GAAP)	24.4%
Comparable Currency Neutral Operating Income Growth (Non-GAAP)	13%

Other KPIs

Q4 FY2025

Segment	Q4 FY2025	YoY
Europe, Middle East & Africa	$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" defensiveness → Q3 transparent execution-driven reframing → Q4 transition-narrative reset under the incoming CEO.

Innovation reframed from strength to gap. For three years, Coca-Cola's commentary positioned its portfolio innovation engine as a core competitive moat. CEO-elect Henrique Braun took the opposite stance on his first earnings call: "While we have made some progress with our overall success rates over the past several years, our innovation today is not where it needs to be." This is not nuance — it is an explicit repudiation of prior messaging from the same leadership team. When an incoming CEO names a specific operating capability as deficient on his first print, it foreshadows organizational change, capital reallocation, or both.

System alignment reframed from accomplishment to starting line. Last quarter James Quincey described re-franchising as having "a clear line of sight to complete." This quarter Braun called the same achievement "simply the starting point." In a single quarter the framing of two decades of system work has shifted from "done" to "preliminary." Combined with Q3's telegraphed 2026 restructuring (still not quantified at this print), the cumulative signal is that the post-transition operating model will look structurally different.

Volume promoted from output to priority — explicitly. Q1 framed volume as an output of the algorithm. Q3 made it "a key priority." Q4 doubled down: in Q&A, Quincey described targeting a "50-50 balance between volume and price" over time, a structural departure from the +6 points of price/mix that carried FY2025. The combination of the volume re-prioritization and the initial FY2026 organic revenue guide of 4–5% (one point below the FY2025 framework) is internally consistent: management is conceding that the pricing engine cannot sustain prior levels and the volume engine is not yet recovered enough to fully offset.

"Discontented" replaces "delivering." Braun's framing — "While we are proud of what we have accomplished, future success is never guaranteed. We must remain discontented" — is a deliberate posture shift away from the steady-delivery messaging of the Quincey era. The word "discontented" is the same word Quincey used in Q3 ("The future belongs to the discontented"), but in Braun's mouth it lands as policy, not aspiration.

FX upgraded to tailwind, but absorbed not flowed through. Last quarter the Q4 EPS FX headwind narrowed and management did not raise the FY EPS guide. This quarter FY2026 picks up a 3% comparable-EPS FX tailwind, and the underlying currency-neutral EPS growth guide (ex-M&A) is 5–6% — below the FY2025 framework of approximately 8% currency-neutral EPS growth (which was delivered at 9%). The operational EPS algorithm as set for FY2026 has softened roughly in line with the FX tailwind absorbed. This is the second consecutive quarter where management has absorbed an FX benefit rather than letting it expand the algorithm — a pattern worth flagging.

Recurring themes management leaned on this quarter:

Volume stabilization and prioritization after flat 2025 resultInnovation capability gap requiring faster market responsivenessDigital transformation and consumer engagement at core of strategy evolutionPortfolio expansion toward multi-billion-dollar brands and young adult recruitmentDisciplined capital allocation with dividend growth commitmentMarket-by-market adaptation to differing macroeconomic conditions

Risks management surfaced:

Softer consumer spending and weaker industry performance in Asia PacificContinued microeconomic pressure on lower-income consumers in North AmericaCommodity volatility and evolving global trade dynamics impacting cost basketRegulatory approvals required for pending Coca-Cola Beverages Africa saleOngoing IRS dispute creating balance sheet management uncertainty

Q&A highlights

Dara Mosenian · Morgan Stanley

Breakdown of 4-5% organic sales growth guidance for 2026, specifically the balance between price/mix and volume contributions, normalized price mix run rate, and volume prospects given Mexico tax headwinds and difficult consumer environment.

Management explained that Q4 pricing was 1% reported but 4% underlying, with 3% negative mix. Four-quarter view shows 4% underlying price and 1% volume, equating to 5% revenue growth consistent with 2025. For 2026, management expects more balanced mix of volume and price as inflation moderates, with volume growth dependent on recovery in weak markets (India, China, ASEAN, Europe) and mitigation of Mexican tax headwind.

Q4 underlying pricing: 4% (vs. 1% reported)Q4 negative mix: 3%Four-quarter view: 4% price, 1% volume = 5% revenue growth2026 guidance: 4-5% organic sales growth

Lauren Lieberman · Barclays

Discussion of North America operating margin expansion to 30% for first time; whether this is structural change or one-off, long-term margin level expectations, and potential for further expansion.

Management characterized the 30% margin as part of a pattern of ~60 basis points annual expansion over 8 years, not a fluke. North America is the star performer leveraging supply chain, marketing, and operational levers. Management expects continued expansion as there remains 'tremendous opportunity' and committed to long-term algorithm implying 'modest expansion on a going-forward basis.'

North America operating margin: 30% (first time)Company-wide average: ~60 basis points annual margin expansion over 8 yearsKey levers: supply chain, marketing investment, operational efficiencyLong-term guidance implies: modest margin expansion on going-forward basis

Rob Odenstein · Evercore

Currency approach and philosophy; explanation of 1% NSR tailwind vs 3% bottom-line benefit; hedging policy and outlook for 27; and whether FX tailwinds will be reinvested or dropped to bottom line.

Management explained hedging removes non-market fluctuations at local level and provides enterprise clarity on USD earnings growth. 2026 tailwind (1% NSR, 3% NI) driven by weaker dollar in emerging markets, particularly Latin America and South Africa. Well-hedged on G10 currencies; emerging markets hedged where economically sensible. Philosophy is to invest consistently in markets and let FX hedging provide clarity at enterprise level for USD earnings growth.

2026 FX guidance: 1% NSR tailwind, 3% net income benefitPrimary driver: weaker dollar in Latin America and South AfricaG10 currencies: well hedged through 2026Emerging markets: hedged where economically sensible

Steve Powers · Deutsche Bank

Macro environment assumptions for 2026 given prior 'light drizzle' commentary; expected contributions from emerging vs developed markets to 4-5% growth; and timeline for volume recovery.

Management reaffirmed 'light drizzle' descriptor remains appropriate. For 2026, expects 50-50 balance between volume and price ultimately. Key volume drivers (India, China, ASEAN, Europe) need to improve through the year. Expects more price early in year (particularly Mexico tax impact in Q1) and more balanced mix toward year-end as volume builds.

Macro environment: 'light drizzle' remains accurate descriptorTarget mix: 50-50 volume and price balanceVolume recovery priority: India, China, ASEAN, EuropeExpected timing: more price early year, more volume balance by year-end

Kamil Gajrawalla · Jefferies

Why 2026 EPS growth (7-8% adjusted for 3% FX benefit = ~4-5% operational) appears to decelerate from 2025 4% despite FX headwind reversal; is this due to investment, conservatism, or other factors.

Management attributed apparent slowdown to three factors: (1) 4-5% top line reflects sum of parts with markets at different stages of recovery; (2) bias to invest 'somewhat ahead of the curve' in brands, markets, and capabilities; (3) structural cycling and below-the-line items (equity income from re-franchising) provide headwinds. Management characterized approach as prudent given volume momentum work needed in key markets.

2026 EPS guidance: 7-8%2026 top line guidance: 4-5%Investment bias: ahead-of-the-curve in brands, markets, capabilitiesHeadwinds: structural cycling, equity income from re-franchising

Answers to last quarter's watch list

Q4 comparable operating margin vs. prior-year Q4 — Q4 comparable operating margin came in at 24.4% versus 24.0% in prior-year Q4 (+40bps), with comparable currency-neutral operating income up 13% and FY non-GAAP EPS of $3.00 landing above the ~3% growth guide. The headline GAAP margin is depressed by item-specific charges; the underlying algorithm held.

Resolved positively

Mexico sugar tax impact on LatAm volume in Q1 2026 — Management quantified the impact qualitatively in Q&A — Mexico tax is the dominant Q1 price/volume headwind and is expected to mitigate through the year. LatAm Q4 improved to +3%, giving the region a stronger jumping-off point than feared. No dollar quantification of the tax drag was provided.

Continue monitoring

2026 restructuring charge size and EPS impact — Not quantified on this print. Braun referenced ongoing system evolution and the need for transformation but did not disclose restructuring charges, headcount actions, or savings targets.

Not resolved

Q4 unit case volume sustaining ≥+1% — Q4 unit case volume held at +1% against tougher comps. The bar was met.

Resolved positively

Price/mix decomposition in Q4 — Q4 price/mix collapsed to +1%, the exact compression the watch list flagged as the bearish scenario. Underlying pricing held at 4 points but was offset by 3 points of unfavorable mix from emerging-market weakness. This is the most important confirmation in the print: the pricing engine has materially decompressed.

Resolved negatively

FX tailwind flow-through to FY2026 outlook — FY2026 picks up a ~1% revenue and ~3% EPS FX tailwind. The initial FY2026 currency-neutral EPS growth guide (ex-M&A) is 5–6%, below the FY2025 framework of approximately 8% currency-neutral EPS growth that was delivered at 9%. The FX tailwind appears to be absorbed by operational softening and investment, not extending the algorithm.

Resolved negatively

What to watch into next quarter

Q1 2026 organic revenue growth ≥4% — with six extra selling days and the Mexico tax landing in Q1, a print below 4% would put the FY 4–5% guide at risk on day one. Watch the volume/price split closely: management has guided Q1 to be price-heavy.

Asia Pacific Q1 trajectory — APAC turned negative at -7% in Q4. Whether this is a discrete weakness (one or two markets) or a broader regional break determines whether the FY guide's volume recovery thesis is credible.

Quantification of the 2026 restructuring — first telegraphed in Q3, still un-quantified. A line item or sizing in Q1 is overdue; absence into mid-year would itself be a signal.

Price/mix recomposition in Q1 — Q4 printed +1 point with -3 mix. Watch whether Q1 returns to mid-single-digit price/mix (suggesting Q4 was a mix anomaly) or stays compressed (confirming the pricing engine has structurally faded).

fairlife New York facility ramp — capacity constraints were called out as a growth governor through 2025; the New York facility is expected to ease constraints through 2026. First quantified contribution disclosure likely in Q1 or Q2.

North America operating margin sustainability above 28% — Q4 saw the segment hit 30%; FY currency-neutral EPS growth in FY2026 of 5–6% depends in part on holding that level. A pull-back to the mid-20s would expose the FY guide.

Sources

Coca-Cola Q4 FY2025 Earnings Release, SEC filing — https://www.sec.gov/Archives/edgar/data/21344/000162828026006642/a2025q4earningsreleaseex-9.htm
Coca-Cola Q4 FY2025 Earnings Conference Call prepared remarks and Q&A, February 10, 2026

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