PepsiCo Q3 FY2026 results: revenue, margins, cash flow, guidance

Operating income, which PepsiCo calls operating profit, was USD 4,260 million, against USD 3,569 million a year earlier, a rise of 19.4% by our calculation. PepsiCo's operating margin, which is operating income as a share of revenue, was 16.9%, 1.9 percentage points more than in Q3 FY2025, both by our calculation. The release says the increase in operating profit mainly reflects a favorable net effect of acquisition and divestiture-related charges and credits, and net mark-to-market gains on commodity derivatives.^[2]

Gross margin, gross profit as a share of revenue, was 54.4% against 53.6%, a rise of 0.8 percentage points, all our calculations. Net income attributable to PepsiCo rose 17.1% by our calculation, from USD 2,603 million to USD 3,048 million.

The release's income statement shows an impairment of intangible assets in Q3 FY2025 and none in Q3 FY2026.^[2] A footnote says the earlier charges related primarily to the impairment of the Rockstar brand.^[2]

The release also reports core results, which are non-GAAP: they adjust the figures that US accounting rules (GAAP) require.^[2] Core results leave out items such as mark-to-market gains and losses, restructuring and impairment charges, and acquisition and divestiture-related charges and credits.^[2]

On the core basis, the release shows that operating profit and EPS also rose from Q3 FY2025, each by a smaller percentage than the GAAP figures this recap uses.^[2] It says core operating profit reflects productivity savings, what PepsiCo calls effective net pricing, and tariff refunds, partly offset by certain operating cost increases and higher advertising and marketing expenses.^[2] The release's glossary defines effective net pricing as the year-over-year impact of discrete pricing actions, sales incentive activities and the mix of products, package sizes and countries in its sales.^[2]

The year-on-year increases start in Q2 FY2025, when revenue was 1.0% more than a year earlier. Growth was then 2.7% in Q3 FY2025 and 5.6% in Q4 FY2025, followed by 8.5% in Q1 FY2026 and 6.4% in Q2 FY2026. In the two quarters before Q2 FY2025, revenue was lower than a year earlier: by 0.2% in Q4 FY2024 and by 1.8% in Q1 FY2025. Each rate is our calculation.

PepsiCo's fourth quarter is longer than the other three, its Form 10-K says.^[5] So quarters do not bring in equal revenue, and each one is set against the same quarter a year earlier. Revenue was USD 19.4 billion in Q1 FY2026 and USD 29.3 billion in Q4 FY2025.

The two fourth-quarter figures in the series, USD 29,343 million for Q4 FY2025 and USD 27,784 million for Q4 FY2024, are our calculation. The Form 10-K reports the full fiscal year, and we subtract the first three quarters as reported in that year's Q3 Form 10-Q.

For Q3 FY2026, the release splits the increase in net revenue into organic revenue growth, a net benefit from acquisitions and divestitures, and a benefit from foreign exchange translation.^[2] Organic revenue is a non-GAAP measure that adjusts for foreign exchange translation and for acquisitions and divestitures.^[2] The release says its growth reflects effective net pricing and a contribution from organic volume growth.^[2] It says the North America beverages business grew net revenue primarily because of acquisitions made in 2025.^[2]

PepsiCo stock fundamentals covers operating margin over the same 8 quarters and also has sections on net debt and buybacks.

The release states guidance of organic revenue growth of approximately three percent and net revenue growth of approximately six percent.^[2] The two EPS lines, core EPS and core constant currency EPS, are core measures.^[2]

PepsiCo gives this guidance on a non-GAAP basis. The release says it cannot predict some elements of reported GAAP results, including foreign exchange translation and commodity mark-to-market impacts.^[2] Diluted EPS of USD 2.23 per share for Q3 FY2026 is a GAAP figure from the Form 10-Q, so it is not the core EPS of the guidance.

The one amount in the guidance is USD 8.9 billion of cash returns to shareholders for fiscal 2026. A footnote says it is made up of dividends and share repurchases.^[2]

The release says PepsiCo updated its fiscal 2026 guidance, and its guidance table prints the previous guidance beside the current one.^[2] In that table, the current growth ranges for core EPS and core constant currency EPS are lower than the previous ones, and the core annual effective tax rate is lower.^[2]

The lines for the effect of foreign exchange translation and of acquisitions, net of divestitures, are higher.^[2] The organic revenue and net revenue growth lines are single values where the previous guidance gave ranges.^[2] The lines for capital spending, free cash flow conversion and cash returns to shareholders are the same in both columns.^[2]

Our guidance table shows only the current column; the previous values are in the release itself. PepsiCo's cautionary statement treats the 2026 guidance and outlook as forward-looking and says such statements involve risks and uncertainties that could cause actual results to differ materially.^[2] The guidance is PepsiCo's statement, not a forecast by StockFactsheet.

PepsiCo's Form 10-Q gives its cash flow statement for the 36 weeks to 5 Sep 2026, not for the quarter alone. Each Q3 FY2026 amount here is that total less the total to 13 Jun 2026 in the Q2 FY2026 Form 10-Q. For capital expenditure, the 10-Q's segment note also gives a figure for the 12 weeks, and it is the same as ours.

Free cash flow is cash from operations less capital expenditure. By our calculation, Q3 FY2026 free cash flow was 34.2% more than in Q3 FY2025. At USD 4.7 billion, it was larger than the USD 2.0 billion of dividends paid in the quarter.

Over the four quarters to 5 Sep 2026 (364 days), our sums are USD 14.6 billion of cash from operations and USD 4.1 billion of capital expenditure. That leaves free cash flow of USD 10.5 billion. Over the same four quarters, PepsiCo paid USD 7.9 billion in dividends and USD 987 million for share buybacks, also our sums.

PepsiCo's release defines free cash flow in another way: net cash from operating activities less capital spending, plus sales of property, plant and equipment.^[2] Our figure does not add those sales, so it can differ from PepsiCo's own. The PepsiCo financial statements page lists the cash flow lines for each of the 8 quarters.