PepsiCo Inc. (NASDAQ:PEP)

The financial information reveals a generally strong and positive cash flow from operating activities over the five-year period, though with some fluctuations. Net income demonstrates an initial increase from 2021 to 2023, peaking at US$9,155 million, before declining in 2025 to US$8,295 million. Several non-cash adjustments significantly impact the cash flow from operations, and a review of these adjustments provides insight into the company’s financial performance.

Operating Activities

Net cash provided by operating activities generally increased from US$11,616 million in 2021 to US$13,442 million in 2023, before decreasing to US$12,087 million in 2025. This indicates a consistent ability to generate cash from core business operations. Significant contributors to this cash flow include net income and substantial depreciation and amortization expenses, which consistently increased over the period, reaching US$3,451 million in 2025. Several items show volatility, including impairment and other charges, restructuring and impairment charges, and deferred income taxes. The Juice Transaction in 2022 resulted in a significant negative impact, offset by proceeds in the same year. Product recall-related impacts and associated cash payments began to appear in 2023 and 2024, respectively, suggesting potential quality control or safety concerns. Changes in accounts receivable, inventories, and accounts payable also contribute to fluctuations in operating cash flow.

Investing Activities

Cash flow from investing activities is consistently negative, indicating ongoing investment in the business. Capital spending represents the largest cash outflow, remaining relatively stable between approximately US$4,625 million and US$5,518 million annually. Acquisitions, net of cash acquired, also represent a significant cash outflow, particularly increasing to US$3,391 million in 2025. Proceeds from the Juice Transaction in 2022 provided a substantial inflow, partially offsetting the outflows. Fluctuations in short-term investments are also observed, with both purchases and maturities impacting cash flow.

Financing Activities

Financing activities demonstrate significant cash outflows, primarily driven by cash dividends paid and share repurchases. Cash dividends paid consistently decreased from US$5,815 million in 2021 to US$7,638 million in 2025. Share repurchases were substantial in 2022 and 2023, at US$1,500 million and US$1,000 million respectively, and continued at US$1,000 million in 2024 and 2025. The company actively manages its debt, with proceeds from issuances generally offsetting payments of long-term debt and debt redemptions. Short-term borrowings are also utilized, with both proceeds and payments fluctuating annually. Proceeds from exercises of stock options provide a minor inflow.

Cash Position & Exchange Rate Impact

The company maintains a substantial cash balance, increasing from US$5,707 million in 2021 to US$9,204 million in 2025, despite overall net cash outflows in several years. The effect of exchange rate changes on cash and cash equivalents is variable, ranging from a negative impact of US$687 million in 2024 to a positive impact of US$422 million in 2025, indicating exposure to foreign currency fluctuations. The net increase or decrease in cash and cash equivalents varies annually, reflecting the combined impact of operating, investing, and financing activities.

Overall, the company demonstrates a strong capacity to generate cash from operations, which is partially offset by significant investments in capital expenditures, acquisitions, and returns to shareholders through dividends and share repurchases. The fluctuations in certain non-cash adjustments and the impact of exchange rate changes warrant continued monitoring.