Keurig Dr Pepper (NASDAQ:KDP) Surprises With Q2 Sales

Beverage company Keurig Dr Pepper (NASDAQ:KDP) reported revenue ahead of Wall Street’s expectations in Q2 CY2025, with sales up 6.1% year on year to $4.16 billion. Its non-GAAP profit of $0.49 per share was in line with analysts’ consensus estimates.

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Commenting on the quarter, CEO Tim Cofer stated, "Our Q2 results cemented a strong first half of the year, as we drove robust performance in U.S. Refreshment Beverages, good growth in International, and sequential progress in U.S. Coffee. Today's dynamic environment puts a premium on operational excellence, which we are demonstrating while pushing ahead on our multi-year strategic agenda. Though the back half will present new challenges, we are on track to deliver our 2025 outlook and are confident in the long-term value creation ahead."

Company Overview

Born out of a 2018 merger between Keurig Green Mountain and Dr Pepper Snapple, Keurig Dr Pepper (NASDAQ:KDP) is a consumer staples powerhouse boasting a portfolio of beverages including sodas, coffees, and juices.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.

With $15.76 billion in revenue over the past 12 months, Keurig Dr Pepper is one of the larger consumer staples companies and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because it’s harder to find incremental growth when your existing brands have penetrated most of the market. To expand meaningfully, Keurig Dr Pepper likely needs to tweak its prices, innovate with new products, or enter new markets.

As you can see below, Keurig Dr Pepper grew its sales at a mediocre 5.9% compounded annual growth rate over the last three years, but to its credit, consumers bought more of its products.

This quarter, Keurig Dr Pepper reported year-on-year revenue growth of 6.1%, and its $4.16 billion of revenue exceeded Wall Street’s estimates by 0.9%.

Looking ahead, sell-side analysts expect revenue to grow 4.8% over the next 12 months, similar to its three-year rate. This projection doesn't excite us and implies its products will see some demand headwinds.

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Volume Growth

Revenue growth can be broken down into changes in price and volume (the number of units sold). While both are important, volume is the lifeblood of a successful staples business as there’s a ceiling to what consumers will pay for everyday goods; they can always trade down to non-branded products if the branded versions are too expensive.

Keurig Dr Pepper’s average quarterly volume growth was a healthy 2.4% over the last two years. This is pleasing because it shows consumers are purchasing more of its products.

In Keurig Dr Pepper’s Q2 2025, sales volumes jumped 9.5% year on year. This result was an acceleration from its historical levels, certainly a positive signal.

Key Takeaways from Keurig Dr Pepper’s Q2 Results

It was good to see Keurig Dr Pepper narrowly top analysts’ revenue expectations this quarter. On the other hand, its gross margin missed. Predictably, EPS was roughly in line. Zooming out, we think this was a mixed quarter. The stock remained flat at $33.74 immediately following the results.

Is Keurig Dr Pepper an attractive investment opportunity at the current price? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.