PepsiCo and Coca-Cola are both highly profitable beverage-and-snack giants, but their profitability profiles differ meaningfully in scale, margin structure, and recent trajectory. PEP is the larger business by revenue—$91.9B in FY2024 [PEP:Q2] versus KO's $47.1B [KO:Q2]—yet KO consistently converts a higher share of revenue into profit. KO's gross margin runs well above PEP's: in FY2025, KO generated $29.5B of gross profit on $47.9B of revenue [KO:Q15][KO:Q3], implying ~62% gross margin, while PEP produced $50.9B of gross profit on $93.9B of revenue [PEP:Q15][PEP:Q3], implying ~54% gross margin—a gap that reflects PEP's heavier exposure to lower-margin food and snack manufacturing. At the operating income level, KO's FY2025 result of $13.8B [KO:Q11] on roughly half PEP's revenue base implies an operating margin of ~29%, compared with PEP's $11.5B [PEP:Q11] on nearly double the revenue, implying ~12%. Net income tells a similar story: KO earned $13.1B in FY2025 [KO:Q7] versus PEP's $8.2B [PEP:Q7], a notable reversal given PEP's much larger top line.
On revenue trajectory, both companies have expanded their top lines over the FY2022–FY2025 window, though the path has not been uniformly smooth. PEP grew from $86.4B in FY2022 [PEP:Q0] to $93.9B in FY2025 [PEP:Q3], but FY2023-to-FY2024 growth was essentially flat (~0.4%), making "steady growth" an overstatement for that stretch. KO's revenue similarly expanded over the period, though from a smaller base.
Profitability trends at the two companies have diverged recently. PEP's net income declined from $9.6B in FY2024 [PEP:Q6] to $8.2B in FY2025 [PEP:Q7], and this deterioration is broader than the bottom line alone suggests: operating income also fell sharply, from approximately $12.9B to $11.5B [PEP:Q11] (~-11%), even as revenue continued to grow—pointing to margin compression that appears more structural than transitory. KO's net income rose to $13.1B in FY2025 [KO:Q7] from $10.6B in FY2024 [KO:Q6]; however, it is worth noting that KO's net income had been roughly flat between FY2023 and FY2024, so the FY2025 jump represents a step-change rather than a continuation of a multi-year upward trend. The ~38% increase in KO's operating income over the same period may also reflect non-recurring items, and should be interpreted with some caution until the drivers are fully disclosed. Taken together, KO's margin expansion has been more pronounced in the most recent year, while PEP faces meaningful near-term profitability headwinds.
PEP: PepsiCo is a revenue powerhouse, growing from $86.4B in FY2022 [PEP:Q0] to $93.9B in FY2025 [PEP:Q3], but its diversified food-and-beverage model constrains margins relative to KO, with gross margins in the mid-50% range and operating margins around 12–14%. Net income declined from $9.6B in FY2024 [PEP:Q6] to $8.2B in FY2025 [PEP:Q7], and the accompanying drop in operating income—despite continued top-line growth—suggests the profitability pressure is broader and more structural than the net income line alone implies.
KO: Coca-Cola's asset-light, concentrate-focused model delivers structurally superior margins: gross profit reached $29.5B on $47.9B of revenue in FY2025 [KO:Q15][KO:Q3], implying ~62% gross margin, and operating income of $13.8B [KO:Q11] implies an operating margin near 29%. Net income rose to $13.1B in FY2025 [KO:Q7] from $10.6B in FY2024 [KO:Q6], though this follows a period of flat net income between FY2023 and FY2024, and the magnitude of the FY2025 improvement may partly reflect non-recurring factors. Even with those caveats, KO's profitability profile—higher margins at every level on roughly half PEP's revenue—remains structurally stronger.