10-Q · April 30, 2026
Coca-Cola's Q1 2026 results showed strong financial performance, with revenue rising 5.0% year-over-year to $12.47 billion. Improved operating margins were evident, resulting in earnings per share (EPS) of $0.86,…
Earnings analysis · 10-Q
KO earnings analysis
Filed July 29, 2026 · Our reading of the company's report
The latest report
Coca-Cola delivered a strong Q2: revenue increased 7% to $13.380 billion, operating income rose 9% to $4.672 billion, and operating margin expanded 80 basis points to 34.9%. Volume growth was healthy at 5% worldwide,…
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Coca-Cola delivered a strong Q2: revenue increased 7% to $13.380 billion, operating income rose 9% to $4.672 billion, and operating margin expanded 80 basis points to 34.9%. Volume growth was healthy at 5% worldwide, with particular strength in Asia Pacific at 8%, while Latin America posted 16% revenue growth. Cash generation improved sharply, but the investment case retains material exposure to the $6.0 billion IRS deposit and a potential $14 billion subsequent-year tax liability, as well as BodyArmor impairment risk.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $1.03
What stood out
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Revenue accelerated on volume and FX
Q2 net operating revenue rose $845 million, or 7%, year over year to $13.380 billion. This was driven by 4% volume, 2% price/mix and a 2% favorable FX effect, partly offset by a 1% acquisitions/divestitures impact; revenue also increased from $12.470 billion in Q1 2026.
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Year-over-year margin expansion
Gross margin expanded 50 basis points year over year to 62.9%, while operating margin expanded 80 basis points to 34.9%. Sequentially, gross margin declined 10 basis points from 63.0% and operating margin declined 10 basis points from 35.0% in Q1 2026.
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EPS and operating income grew
Diluted EPS was $1.03, up from $0.97 in Q2 2025 and $0.91 in Q1 2026. Operating income increased $392 million, or 9%, to $4.672 billion, exceeding the 7% revenue gain.
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Volume growth was broad based
Consumer demand remained broad based: worldwide unit-case volume increased 5%, led by Asia Pacific at 8%, EMEA at 4%, and Latin America, North America and Bottling Investments each at 3% or better.
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Cash conversion rebounded strongly
Six-month operating cash flow improved to $7.543 billion from an outflow of $1.391 billion a year earlier. After $684 million of capital expenditures, six-month free cash flow was approximately $6.859 billion, with capex equal to about 2.6% of $25.852 billion of six-month revenue.
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Liquidity supports debt reduction and buybacks
Liquidity remained substantial, with cash, cash equivalents, short-term investments and marketable securities of $16.4 billion plus $6.6 billion of unused backup credit lines. The company repaid $1.559 billion of debt during the first six months and repurchased 7.3 million shares for $549 million.
What to watch
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IRS litigation carries major contingent exposure
The IRS dispute remains the largest contingent financial exposure: Coca-Cola has paid a $6.0 billion tax-litigation deposit for 2007-2009, has a related $514 million accrued-interest receivable, and estimates a potential additional $14 billion tax-and-interest liability for 2010-2025 if the Tax Court methodology is ultimately applied. The reserve rose to $529 million as of July 3, 2026.
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BodyArmor impairment risk remains elevated
BodyArmor's trademark had a $960 million impairment in Q4 2025 and retains a $2.440 billion carrying value. Management states that failure to meet revised operating projections or an increase in discount rates could require an additional impairment charge.
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Asia Pacific mix and investment pressure
Asia Pacific revenue grew only 1% despite 11% concentrate-sales-volume growth because unfavorable price/mix reduced revenue by 9%. Its six-month operating income fell to $1.192 billion from $1.271 billion, as unfavorable mix, commodity costs and marketing spending outweighed volume growth.
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Marketing and commodity costs pressure profits
Marketing investment is a near-term margin headwind: Q2 advertising expense increased $237 million to $1.565 billion, and total SG&A increased $250 million, or 7%, to $3.720 billion. Higher commodity costs also partially offset pricing and FX benefits.
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Risk-factor section unchanged; tax exposure updated
No new standalone Item 1A risk factors were added versus the 2025 10-K; however, the filing updates the tax reserve to $529 million and notes that the potential 2010-2025 tax-and-interest exposure increased by approximately $900 million during the first six months of 2026.
Management's outlook
The 10-Q does not provide numeric revenue or EPS guidance. Management expects favorable foreign-exchange effects on full-year 2026 revenue, operating income and operating cash flow based on current spot rates and hedges; it expects approximately $2.2 billion of 2026 capital expenditures.
Earlier filings 4
10-K · February 20, 2026
The 2025 10-K emphasizes Coca‑Cola’s portfolio and global distribution moat — the Company sold 33.8 billion unit cases in 2025 (33.7 billion in 2024) and its brands deliver 2.2 billion servings per day. Management…
10-Q · October 24, 2024
The Coca‑Cola Company reported Q3 net operating revenues of $11,854,000,000 (vs. $11,953,000,000 in Q3 2023), a slight year-over-year decline of $99 million, while operating income fell to $2,510,000,000 from…
10-Q · May 2, 2024
Coca‑Cola reported Q1 net operating revenues of $11,300,000,000 (up from $10,980,000,000 a year ago) and diluted EPS of $0.74 (up from $0.72). Revenue and EPS gains were supported by a $1,513 million other income gain…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.