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PepsiCo PEP Prepaid Incentive Arrangements

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Other financials

Income statement

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Revenue$24.2B+6.4%
Gross profit$13.1B+5.5%
Operating income$4.0B+125%
Net income$3.0B+136%
EPS (diluted)$2.18+137%

Balance sheet

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Cash & equivalents$10.3B+33.6%
Total debt$53.2B+3.6%
Total equity$22.1B+20.0%
Total assets$112.19B+6.5%

Cash flow

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Operating cash flow$2.4B+137%
CapEx$1.3B-16.0%
Free cash flow$1.1B+315%

Valuation

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Market cap$189.42B-1.7%
Enterprise value$232.33B-1.7%
P/E18.1×-7.4×
P/S-0.1×

Profitability

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Gross margin54%-0.5pp
Operating margin14.8%+3.4pp
Net margin10.8%+2.6pp
FCF margin10.8%+3.0pp

Returns & leverage

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Return on equity51.6%+11.7pp
Debt / equity2.4×-0.4×
Current ratio0.9×+0.2×

Where this comes from

Reported directly by PepsiCo in its filing.

Tagged under the XBRL concept pep:PrepaidIncentives.

The source filing: PepsiCo’s 10-K, filed February 3, 2026.

Filed
Feb 2, 2026, 7:00 PM EST
Fiscal year
FY2025
Accession
0000077476-26-000007

The terms of most of our incentive arrangements do not exceed one year and, therefore, do not require highly uncertain long-term estimates. Certain arrangements, such as fountain pouring rights, may extend beyond one year. Upfront payments to customers under these arrangements are recognized over the shorter of the economic or contractual life, primarily as a reduction of revenue, and the remaining balances of $329 million as of December 27, 2025 and $237 million as of December 28, 2024 are included in prepaid expenses and other current assets and other assets on our balance sheet.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

FAQ

What is PepsiCo's prepaid incentive arrangements?
PepsiCo (PEP) reported prepaid incentive arrangements of $329M in Q4 2025.
How has PepsiCo's prepaid incentive arrangements changed year-over-year?
PepsiCo's prepaid incentive arrangements increased by 38.8% year-over-year, from $237M to $329M.
What is the long-term trend for PepsiCo's prepaid incentive arrangements?
Over 5 years (2020 to 2025), PepsiCo's prepaid incentive arrangements has grown at a 1.9% compound annual growth rate (CAGR), from $299M to $329M.
What does prepaid incentive arrangements mean?
These are payments made in advance to customers or vendors for future incentive programs, such as trade promotions or volume rebates. They represent a current asset that will be recognized as an expense or reduction in revenue over the term of the agreement. This metric provides insight into the company's trade spending strategy and contractual commitments.

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