Mondelez Q2 2025: Revenue Grows, but Rising Costs Squeeze Profits

Mondelez International, the global snacking powerhouse behind brands like Oreo, Cadbury, and Toblerone, recently released its financial results for the second quarter of 2025. By digging into their official 10-Q filing with the SEC, we can get a clearer picture of their performance beyond the headlines. Let's break down the key numbers and see what they tell us about the state of the snack food giant.

For the three months ended June 30, 2025, Mondelez reported net revenues of $9.0 billion, a solid 7.7% increase from the $8.3 billion reported in the same quarter last year. This top-line growth suggests continued strong demand for its products globally.

To visualize how this revenue translates into profit, here is a breakdown of their income statement for the quarter:

The Story Behind the Profits

At first glance, the company's profitability looks exceptional. GAAP Operating Income—the profit left after paying for the costs of running the business—jumped an impressive 37% to $1.2 billion from $854 million a year ago.

However, this is where a closer look is crucial. Much of this increase comes from changes in the value of derivatives, which are financial contracts the company uses to hedge against risks like fluctuating commodity prices. These "mark-to-market" adjustments can be volatile. In Q2 2024, Mondelez saw large paper losses on these contracts, making the 2025 numbers look much better by comparison.

A clearer view comes from the company's Adjusted Operating Income, which removes these and other one-off items. This figure actually decreased by 14% to $1.28 billion from $1.49 billion last year. This tells a more nuanced story about the underlying business health.

The Squeeze of Costs and Pricing

The core challenge for Mondelez this quarter is clear: a battle between rising prices and even faster-rising costs.

• Pricing Power: Mondelez implemented higher prices, which contributed an additional $589 million to its operating income.
• Input Costs: These price hikes were more than offset by a massive $860 million increase in input costs. The volatility in cocoa prices, a key ingredient for its major chocolate brands, is a likely culprit here.
• Volume/Mix: The higher prices appear to have had a modest impact on consumer behavior, leading to an unfavorable volume/mix effect that reduced operating income by $129 million.

In short, Mondelez is flexing its pricing power, but it's not yet enough to fully cover soaring expenses, and it's causing a slight dip in the amount of product sold.

A Geographic Snapshot

Mondelez's global footprint shows a divided performance:

• Europe was a standout, with revenues surging 18.7% to $3.4 billion.
• AMEA (Asia, Middle East & Africa) also posted strong growth, up 14.7% to $1.8 billion.
• North America saw revenues decline by 3.5% to $2.6 billion.
• Latin America also experienced a 3.1% dip in revenue.

This highlights the strength of the company's international operations, particularly in Europe, which are currently offsetting headwinds in the Americas.

The Final Bite

Mondelez's Q2 results paint a picture of a resilient company navigating a challenging economic environment. Strong revenue growth, driven by its iconic brands in key international markets, is a clear positive. However, significant pressure from input costs is squeezing margins, a common theme for many consumer goods companies today. The key for Mondelez moving forward will be its ability to manage these costs while maintaining consumer loyalty in the face of higher shelf prices.