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 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%.
Revenue
$19.44B
+8.50% YoY
EPS (Diluted)
$1.70
+27.82% YoY
Gross Margin
55.2%
-0.6 pts YoY
Operating Income
$3.21B
+24.39% YoY
Source: SEC XBRL
Pepsico (PEP) reported Q1 FY2026 revenue of $19.44B, up 8.5% year over year. Operating margin was 16.5%, up 2.1 points from 14.4% a year earlier. Operating cash flow was $41M. PEP's fiscal Q1 FY2026 corresponds to calendar Q1 2026.
Last 4 quarters: 3 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026 | 2.20 | 2.23 | Miss -1.3% |
| Mar 2026This filing | 1.61 | 1.57 | Beat +2.8% |
| Dec 2025 | 2.26 | 2.26 | Beat +0.0% |
| Sep 2025 | 2.29 | 2.28 | Beat +0.4% |
Adjusted (non-GAAP) EPS of $1.61 versus the $1.57 analyst consensus — a +2.8% beat for Mar 2026. Analyst consensus is quoted on the adjusted (non-GAAP) basis the street uses. GAAP diluted EPS for this quarter was $1.70.
Compiled by AI from this SEC filing
PepsiCo grew total revenue 8.5% YoY to $19.44B in Q1 2026 (vs. $17.92B in Q1 2025), reflecting broad-based demand across its beverage and snack segments. This growth rate is notable given the challenging consumer spending environment.
Source: 10-Q Income Statement, Q1 2026
Operating income rose 24.4% YoY to $3.21B while SG&A expenses grew only 1.5% to $7.52B, expanding the operating margin by approximately 210 basis points to 16.5%. This demonstrates effective cost discipline relative to top-line growth.
Source: 10-Q Income Statement, Q1 2026
Net income increased 26.9% YoY to $2.33B, with diluted EPS rising 27.8% to $1.70 from $1.33 in Q1 2025. The earnings growth significantly outpaced revenue growth, indicating meaningful margin expansion.
Source: 10-Q Income Statement, Q1 2026
Operating cash flow improved dramatically to $41M in Q1 2026 from -$973M in Q1 2025, a YoY improvement of over $1B. This turnaround reflects better working capital management and stronger earnings conversion.
Source: 10-Q Cash Flow Statement, Q1 2026
Cash and equivalents grew 26.7% YoY to $10.48B, and stockholders' equity rose 16.3% to $21.38B, even as total assets expanded 8.8% to $110.6B. The company continued returning capital to shareholders with $1.97B in dividends paid.
Source: 10-Q Balance Sheet & Cash Flow Statement, Q1 2026
Compiled by AI from this SEC filing · 2 high, 3 medium, 0 low
PepsiCo's debt-to-equity ratio stands at 4.17x, indicating a heavily leveraged balance sheet with total liabilities of $89.1B against stockholders' equity of $21.4B. In a rising or sustained high interest rate environment, this level of leverage could pressure interest expenses and limit financial flexibility. Refinancing risk remains a key concern for a company of this capital structure.
Source: 10-Q Balance Sheet, Q1 2026
PepsiCo's current ratio of 0.897 means current liabilities of $34.5B exceed current assets of $30.9B, indicating the company technically has negative working capital. While large consumer staples companies often operate this way due to strong cash generation, it leaves limited buffer for unexpected short-term obligations. Any disruption to operating cash flows could strain near-term liquidity.
Source: 10-Q Balance Sheet, Q1 2026
Gross margin declined approximately 58 basis points YoY to 55.19% from 55.77%, as cost of revenue grew 9.9% — faster than revenue growth of 8.5%. This suggests input cost inflation (commodities, packaging, logistics) is pressuring the top of the P&L, and sustained cost increases could further erode profitability if pricing power weakens.
Source: 10-Q Income Statement, Q1 2026
Despite reporting $2.33B in net income, operating cash flow was only $41M in Q1 2026, implying significant working capital consumption or non-cash adjustments. This wide gap between reported earnings and cash generation raises questions about earnings quality and the sustainability of cash returns to shareholders in the near term.
Source: 10-Q Cash Flow Statement, Q1 2026
PepsiCo paid $1.97B in dividends in Q1 2026 while generating only $41M in operating cash flow, meaning dividends were effectively funded by financing activities rather than operations. With share buybacks of $182M on top of dividends, total capital returns far exceeded free cash flow, increasing reliance on debt markets to sustain shareholder distributions.
Source: 10-Q Cash Flow Statement, Q1 2026
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 19.44 $B | 17.92 $B | +8.50% |
Cost of Revenue $B | 8.71 $B | 7.93 $B | +9.92% |
Gross Profit $B | 10.73 $B | 9.99 $B | +7.39% |
Operating Income $B | 3.21 $B | 2.58 $B | +24.39% |
Net Income $B | 2.33 $B | 1.83 $B | +26.88% |
EPS (Basic) $ | 1.70 $ | 1.34 $ | +26.87% |
EPS (Diluted) $ | 1.70 $ | 1.33 $ | +27.82% |
SG&A Expense $B | 7.52 $B | 7.41 $B | +1.46% |
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 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.
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