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October 29, 2025 • 3 min read
In its latest quarterly report, beverage giant Keurig Dr Pepper (KDP) offered a detailed look at its financial health for the third quarter of 2025. The numbers reveal a company experiencing solid top-line growth, but a deeper dive into the 10-Q filing with the SEC shows a story of diverging paths between its iconic beverage brands and its coffee business, all set against the backdrop of a major strategic overhaul.
For the three months ending September 30, 2025, KDP reported a total revenue of $4.3 billion, a notable 10.7% increase from the $3.9 billion generated in the same period last year. This growth translated to the bottom line, with net income rising to $662 million, or $0.49 per diluted share, up from $616 million, or $0.45 per share, in Q3 2024.
To better understand how revenue flows through the company's operations to become profit, the following diagram visualizes the key components of KDP's income statement for the quarter.
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The headline numbers, while positive, mask a significant performance gap between KDP's core segments.
U.S. Refreshment Beverages: This segment, which includes popular brands like Dr Pepper, Snapple, and Canada Dry, was the standout performer. Revenue surged 14.4% to $2.7 billion. This division is not just KDP's largest but also its primary growth engine, demonstrating robust consumer demand for its liquid refreshment beverages (LRBs). Operating income for the segment also grew by a healthy 11.1% to $802 million.
U.S. Coffee: The story is different for the coffee business, home to Keurig brewers and K-Cup pods. While revenue saw a modest increase of 1.5% to $991 million, its operating income declined by 6.7% to $237 million. This indicates significant pressure on profitability, as higher sales didn't translate into higher profits, with the segment's operating margin shrinking by 2.1 percentage points.
The International segment also saw revenue growth but faced a slight dip in operating income, echoing the profitability challenges seen in the U.S. coffee market.
Perhaps the most critical context for these results is KDP's massive strategic shift announced in August 2025. The company revealed its intention to acquire global coffee and tea company JDE Peet's and subsequently separate its beverage and coffee portfolios into two independent, publicly traded companies.
This quarter's results seem to underscore the strategic rationale behind this planned split. The beverage business is demonstrating strong, profitable growth, while the coffee segment faces unique market pressures. By separating them, KDP's management likely aims to unlock greater value, allowing each entity to focus on its specific market dynamics, growth opportunities, and challenges without being tethered to the other. While the quarter was a success on the whole, the diverging segment performance highlights that the future for Keurig Dr Pepper is one of significant change.
Last updated: October 29, 2025