Keurig Dr Pepper Inc. (NASDAQ: KDP) shares were on the rise Thursday after the beverage giant served up second-quarter numbers that beat Wall Street's expectations on both the top and bottom lines. The company also stuck to its full-year 2026 sales and adjusted earnings guidance, giving investors another reason to feel good about the direction of the business.

For those unfamiliar, Keurig Dr Pepper is the company behind a sprawling lineup of more than 150 hot and cold drinks, including Dr Pepper, Canada Dry, Snapple, Green Mountain Coffee Roasters, 7UP, A&W and The Original Donut Shop. It's a big player in the beverage aisle, and it just got a whole lot bigger.

Adjusted earnings came in at 57 cents per share, comfortably ahead of the 54 cents analysts were looking for. Revenue hit $7.31 billion, also beating the $7.24 billion consensus estimate.

On a GAAP basis, net sales jumped a whopping 75.6% year over year, and that's almost entirely thanks to the acquisition of JDE Peet's. Strip out that deal, and legacy Keurig Dr Pepper's net sales still rose a solid 7.3%, powered by 4.2% favorable pricing and 3.1% volume/mix growth. Adjusted diluted EPS climbed 16.3% to 57 cents.

CEO Tim Cofer sounded upbeat about the quarter, noting that earnings per share came in above expectations. He pointed to double-digit sales and profit growth in the U.S. Refreshment Beverages segment, sequential improvement in the international business, and solid performance from the combined coffee platform. The strength at JDE Peet's helped offset continued weakness in the U.S. Coffee business.

Cofer also highlighted progress on integration and planned separation efforts, early cost synergies, organizational readiness, and strong free cash flow that's being used to pay down debt. The company remains on track to meet its 2026 financial and transformation goals ahead of the planned separation in early 2027.

Segment Performance

Let's break down how each part of the business fared.

U.S. Refreshment Beverages revenue grew 10% to $2.9 billion, supported by 6.5% volume/mix growth and 3.5% pricing. Adjusted operating income for the segment rose 11.9%, showing that the core soda business is still humming along nicely.

U.S. Coffee was the laggard, with revenue down 3.2% to $918 million as lower volume more than offset price increases. Adjusted operating income fell 24.7%, hurt by inflationary pressures, weaker volume and higher marketing spending. It's a reminder that even giants have their trouble spots.

KDP International was a bright spot, with revenue up 19.6% to $664 million, or 12.4% on a constant-currency basis, driven by both pricing and volume growth. And the JDE Peet's business itself contributed $2.8 billion in revenue following the acquisition that closed on April 1.

Cash Flow And Balance Sheet

The company also showed it's generating plenty of cash. Operating cash flow totaled $895 million during the quarter, while free cash flow reached $714 million. The company ended the quarter with $1.52 billion in cash and cash equivalents, giving it a solid cushion as it works through its transformation.

Outlook Reaffirmed

Looking ahead, Keurig Dr Pepper reaffirmed its full-year 2026 outlook, continuing to expect revenue of $25.9 billion to $26.4 billion, which brackets the analyst consensus estimate of $26.27 billion. The company also maintained its forecast for low-double-digit constant-currency adjusted EPS growth and reiterated its target to end 2026 with a pro forma management leverage ratio of about 4.1x.

KDP Price Action: Keurig Dr Pepper shares were up 1.63% at $31.25 during premarket trading on Thursday, according to market data.