A maker of sparkling sodas, water, sports drinks, coffee, tea, juice, and dairy beverages sold in more than 200 countries, Coca-Cola is best known for its namesake cola and brands like Sprite, Fanta, and Powerade. It was invented in 1886 by Atlanta pharmacist John Pemberton, who first sold the syrup mixed with carbonated water at Jacobs' Pharmacy. The name came from bookkeeper Frank Robinson, who combined the drink's two ingredients—coca leaves and kola nuts—and swapped the "k" in kola for a "c" to make the name look more balanced.
Q2 2026 operating income rose 9% to $4.7B with a $960M BodyArmor trademark impairment recorded
A $960M trademark did not stop from rising. rose 7% to $13.4B and improved to 62.9% as pricing and currency tailwinds offset commodity costs, with operating income up 9% to $4.7B on lower other charges. The underlying business is growing, but the IRS appeal still carries a ~$14.9B estimated exposure.
Key takeaways
The company recorded a $960M noncash on the trademark due to lowered growth expectations and intensified competition, inside a quarter where still rose 9% to $4.7B.
Net revenues rose 7% to $13.4B, driven by 4% growth, 2% favorable price/mix, and a 2% , with worldwide unit case volume up 5% led by Asia Pacific at 8%.
improved 50 to 62.9% from pricing and currency, partly offset by higher commodity costs.
Section summaries
Management's Discussion and Analysis
Q2 2026 net revenues rose 7% to $13.4B on 4% concentrate volume growth and favorable price/mix, while operating income grew 9% to $4.7B.
⌄
Worldwide increased 5% in Q2, led by 8% growth in Asia Pacific and 4% in EMEA, with up 4% globally.
was $7.5B for H1 2026 versus a $1.4B use a year earlier, largely because the $6.1B fairlife milestone payment did not recur.
The IRS stood at $529M as of July 3, 2026, with an estimated ~$14B exposure for 2010–2025 plus $900M for H1 2026 if the appeal fails; oral arguments were heard June 25, 2026.
What changed
Q1 2026 flagged further or fairlife charges in Q2: a $960M BodyArmor was recorded, noncash, while no fairlife remeasurement appeared.
Q1 2026 flagged Q2 against the $2,021M Q1 inflow; H1 was $7.5B versus a $1.4B use a year earlier as the fairlife payment stayed out.
FY 2025 flagged the Eleventh Circuit IRS ruling and tax beyond the $512M reserve toward $14B; the reserve is now $529M with ~$14.9B total estimated and oral arguments heard June 25, 2026.
Q1 2026 flagged Asia Pacific after a 14% decline; Q2 worldwide volume rose 5% with Asia Pacific up 8%, though operating income was not broken out this quarter.
The Q1 2026 table showed of $12.5B and $4,359M; Q2 revenue was $13.4B (from MD&A) and operating income $4.7B (from MD&A), up on both a sequential and year-ago basis.
What to watch
Eleventh Circuit ruling on the IRS transfer-pricing appeal and any tax beyond the $529M reserve toward the ~$14.9B estimated exposure.
Whether further or fairlife remeasurement charges appear in Q3 2026 after the $960M Q2 .
Q3 2026 against the $7.5B H1 2026 figure as the fairlife payment cycle remains out.
Q3 2026 Asia Pacific trend after the Q1 decline and Q2 volume rebound.
Consolidated net operating revenues grew 7% to $13.4B, driven by 4% growth, 2% favorable , and a 2% currency .
margin improved 50 to 62.9%, helped by pricing and currency, partly offset by higher commodity costs.
rose 9% to $4.7B, with margin expanding 80 to 34.9%, as lower other operating charges and operating expenses offset increased marketing spend.
A $960 million was recorded on the trademark due to lowered growth expectations and intensified competition.
was $7.5B in H1 2026 versus a $1.4B use in H1 2025, largely due to the absence of the $6.1B milestone payment made in the prior year.
Company is appealing a $6.0B Tax Court decision on transfer pricing; a plastic-packaging nuisance suit was dismissed.
⌄
The IRS seeks to reallocate over $9B of income to the U.S. parent for 2007–2009, resulting in a Tax Court decision of $2.7B in additional tax plus interest totaling $6.0B.
The Company paid the $6.0B as a in September 2024, stopping further interest accrual, and recorded a of $529M as of July 3, 2026.
The Company appealed to the Eleventh Circuit, which heard oral arguments on June 25, 2026; the Company believes its positions are more likely than not to be sustained.
If the Tax Court methodology is upheld, the Company estimates potential incremental tax and interest liability of approximately $14B for 2010–2025, with an additional $900M for H1 2026.
Baltimore’s lawsuit over plastic packaging impacts was dismissed in its entirety, with the final public nuisance claim dismissed on July 23, 2026.
In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially affect our business, financial con…
⌄
In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially affect our business, financial condition or future results. The risks described in this report and in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, could also materially adversely affect our business, financial condition or future results.
48