Beverage company Coca-Cola (NYSE:KO) met Wall Street’s revenue expectations in Q2 CY2025, with sales up 1.4% year on year to $12.54 billion. Its non-GAAP profit of $0.87 per share was 3.9% above analysts’ consensus estimates.
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Coca-Cola (KO) Q2 CY2025 Highlights:
- Revenue: $12.54 billion vs analyst estimates of $12.55 billion (1.4% year-on-year growth, in line)
- Adjusted EPS: $0.87 vs analyst estimates of $0.84 (3.9% beat)
- Roughly maintained full-year guidance for organic growth and adjusted EPS
- Operating Margin: 34.1%, up from 21.3% in the same quarter last year
- Free Cash Flow Margin: 26.9%, up from 25.6% in the same quarter last year
- Organic Revenue rose 5% year on year (15% in the same quarter last year)
- Sales Volumes fell 1% year on year (2% in the same quarter last year)
- Market Capitalization: $301.6 billion
Company Overview
A pioneer and behemoth in carbonated soft drinks, Coca-Cola (NYSE:KO) is a storied beverage company best known for its flagship soda.
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 many enduring ones grow for years.
With $47.15 billion in revenue over the past 12 months, Coca-Cola is one of the most widely recognized consumer staples companies. Its influence over consumers gives it negotiating leverage with distributors, enabling it to pick and choose where it sells its products (a luxury many don’t have). However, its scale is a double-edged sword because there are only a finite number of major retail partners, placing a ceiling on its growth. For Coca-Cola to boost its sales, it likely needs to adjust its prices, launch new offerings, or lean into foreign markets.
As you can see below, Coca-Cola grew its sales at a tepid 4.5% compounded annual growth rate over the last three years, but to its credit, consumers bought more of its products.
This quarter, Coca-Cola grew its revenue by 1.4% year on year, and its $12.54 billion of revenue was in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 5.3% over the next 12 months, similar to its three-year rate. This projection is above the sector average and indicates its newer products will help support its historical top-line performance.
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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.
To analyze whether Coca-Cola generated its growth from changes in price or volume, we can compare its volume growth to its organic revenue growth, which excludes non-fundamental impacts on company financials like mergers and currency fluctuations.
Over the last two years, Coca-Cola’s average quarterly volume growth was a healthy 1.1%. Even with this good performance, we can see that most of the company’s gains have come from price increases by looking at its 10.4% average organic revenue growth. The ability to sell more products while raising prices indicates that Coca-Cola enjoys some degree of inelastic demand.
In Coca-Cola’s Q2 2025, sales volumes dropped 1% year on year. This result was a reversal from its historical levels. A one quarter hiccup shouldn’t deter you from investing in a business, and we’ll be monitoring the company to see how things progress.
Key Takeaways from Coca-Cola’s Q2 Results
Revenue was in line while EPS beat partly due to better-than-expected gross margin. The company roughly maintained full-year guidance for organic growth and adjusted EPS, which is comforting. Overall, this was a quarter with few surprises. The stock remained flat at $69.93 immediately after reporting.
The latest quarter from Coca-Cola’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.