Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
PepsiCo reported FY2025 revenue of $93.9B (+2.3% YoY), but net income fell 14.0% to $8.2B and operating income dropped 10.8% to $11.5B, reflecting significant margin compression from rising costs and elevated SG&A spending.
Revenue
$93.92B
+2.25% YoY
EPS (Diluted)
$6.00
-13.67% YoY
Gross Margin
54.1%
-0.4 pts YoY
Operating Income
$11.5B
-10.78% YoY
Source: SEC XBRL
Pepsico (PEP) reported FY2025 revenue of $93.92B, up 2.3% year over year. Operating margin was 12.2%, down 1.8 points from 14.0% a year earlier. Operating cash flow was $12.09B, down 3.4% year over year.
Last 4 quarters: 3 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026 | 2.20 | 2.23 | Miss -1.3% |
| Mar 2026 | 1.61 | 1.57 | Beat +2.8% |
| Dec 2025This filing | 2.26 | 2.26 | Beat +0.0% |
| Sep 2025 | 2.29 | 2.28 | Beat +0.4% |
Reported EPS of $2.26 versus the $2.26 analyst consensus — a +0.0% beat for Dec 2025.
Compiled by AI from this SEC filing
PepsiCo grew total revenue by 2.3% YoY to $93.9B in FY2025, up from $91.9B in the prior year. However, this top-line growth was largely offset by rising cost of revenue (+3.2% to $43.1B), suggesting that pricing and/or mix improvements were insufficient to fully counter input cost inflation.
Source: 10-K Income Statement (XBRL Financial Data)
Operating income declined sharply by 10.8% to $11.5B, pushing the operating margin down approximately 1.8 percentage points to 12.2% from 14.0%. SG&A expenses remained elevated at $37.4B (+0.5% YoY), representing a disproportionately large share of revenue and squeezing profitability.
Source: 10-K Income Statement (XBRL Financial Data)
Net income fell 14.0% to $8.2B, and diluted EPS dropped 13.7% to $6.00 from $6.95 in the prior year. The decline in earnings outpaced the revenue growth rate, indicating meaningful deterioration in cost efficiency and/or one-time charges impacting the bottom line.
Source: 10-K Income Statement (XBRL Financial Data)
Long-term debt rose 12.4% to $46.4B, contributing to a debt-to-equity ratio of approximately 4.26x. Total liabilities grew to $86.9B against stockholders' equity of $20.4B, reflecting PepsiCo's continued use of leverage to fund operations, capital expenditures, and shareholder returns.
Source: 10-K Balance Sheet (XBRL Financial Data)
PepsiCo paid $7.6B in dividends (+5.7% YoY) and repurchased $1.0B in shares, returning a total of approximately $8.6B to shareholders. Operating cash flow of $12.1B (-3.4% YoY) covered these distributions, though the payout ratio has risen given the decline in net income.
Source: 10-K Cash Flow Statement (XBRL Financial Data)
Compiled by AI from this SEC filing · 2 high, 2 medium, 1 low
Cost of revenue grew 3.2% while gross profit grew only 1.5%, compressing the gross margin by approximately 40 basis points to 54.1%. If input cost pressures (commodities, packaging, logistics) persist without offsetting pricing power, profitability could deteriorate further in future periods.
Source: 10-K Income Statement (XBRL Financial Data)
Long-term debt increased 12.4% to $46.4B, and the debt-to-equity ratio stands at 4.26x, which is elevated for a consumer staples company. Rising interest rates could increase debt servicing costs, and the current ratio of 0.85x indicates current liabilities exceed current assets, posing near-term liquidity considerations.
Source: 10-K Balance Sheet (XBRL Financial Data)
PepsiCo returned approximately $8.6B to shareholders (dividends + buybacks) in FY2025 while generating $8.2B in net income, meaning shareholder returns exceeded reported earnings. This dynamic, if sustained, could pressure the balance sheet and limit financial flexibility over time.
Source: 10-K Cash Flow Statement & Income Statement (XBRL Financial Data)
SG&A expenses of $37.4B represent approximately 39.8% of revenue, an extraordinarily high ratio that limits operating leverage. While SG&A grew only 0.5% YoY, its absolute level constrains the company's ability to convert revenue growth into meaningful earnings growth.
Source: 10-K Income Statement (XBRL Financial Data)
With current assets of $27.9B and current liabilities of $32.8B, PepsiCo's current ratio is 0.85x, indicating it has more short-term obligations than liquid assets. While common for large consumer staples companies with strong cash generation, any disruption to operating cash flows could create short-term liquidity stress.
Source: 10-K Balance Sheet (XBRL Financial Data)
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 93.93 $B | 91.85 $B | +2.25% |
Cost of Revenue $B | 43.07 $B | 41.74 $B | +3.17% |
Gross Profit $B | 50.86 $B | 50.11 $B | +1.49% |
Operating Income $B | 11.50 $B | 12.89 $B | -10.78% |
Net Income $B | 8.24 $B | 9.58 $B | -13.97% |
EPS (Basic) $ | 6.02 $ | 6.97 $ | -13.63% |
EPS (Diluted) $ | 6.00 $ | 6.95 $ | -13.67% |
R&D Expense $M | 839.00 $M | 813.00 $M | +3.20% |
SG&A Expense $B | 37.37 $B | 37.19 $B | +0.48% |
Answers draw on this SEC filing and the data on this page
PepsiCo delivered strong Q2 FY2026 (12 weeks ended June 13, 2026) results with net revenue up 6% to $24.18B and net income more than doubling to $2.98B, largely reflecting the absence of prior-year impairment charges on the Rockstar and Be & Cheery brands alongside productivity savings and effective net pricing.
PepsiCo delivered a strong Q1 2026 with revenue up 8.5% YoY to $19.4B and net income surging 26.9% to $2.3B, driven by operating leverage as SG&A growth was held to just 1.5% while operating income jumped 24.4%.
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