How KHC (The Kraft Heinz Company) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a consumer packaged goods leader like KHC Income Statement Overview (KHC) makes money is essential for investors and anyone interested in the business of food and beverage manufacturing. In this post, we break down KHC's quarterly income statement (Q3 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick KHC Income Statement Overview

KHC Income Statement Overview operates as a global food and beverage company, producing and marketing branded packaged foods, condiments, and snacks. Revenue comes primarily from the sale of these products to retail and foodservice customers across North America and international markets.
The business is segmented into: - Other Revenue by Geography (primarily North America) - International Revenue (Europe, Latin America, Asia-Pacific)

Revenue Breakdown

• Total Revenue (Q3 2025): $6.24B (−2.3% YoY)
  • Other Revenue by Geography: $4.64B (74.4% of total, −3.8% YoY)
  • International Revenue: $1.60B (25.6% of total, +2.5% YoY)
  • Growth is powered by international expansion and brand strength, offset by softness in North American volumes.

Gross Profit and Margins

• Gross Profit: $1.99B (31.9% gross margin)
  • Cost of Revenue: $4.25B (+1.2% YoY)
  • KHC maintains moderate margins due to scale, supply chain efficiencies, and strong brand pricing power.
• Most costs come from raw materials, manufacturing, and logistics.

Operating Income and Expenses

• Operating Income: $1.03B (flat YoY, 16.4% margin)
• Operating Expenses: $965M (+12.3% YoY)
  • SG&A: $930M (+13.6% YoY, 14.9% of revenue) — includes marketing, sales, and administrative costs to support global operations and brand investments.
  • R&D: Not separately disclosed for Q3 2025.
  • KHC continues to invest in brand marketing and international growth while controlling core operating costs.

Net Income

• Pre-Tax Income: $807M (flat YoY, 12.9% margin)
• Income Tax: $194M (24.0% effective tax rate)
• Net Income: $615M (flat YoY, 9.9% net margin)
• KHC converts a moderate portion of sales into profit due to scale, brand strength, and disciplined cost management.

What Drives KHC's Money Machine?

• Branded packaged foods: 74%+ of revenue comes from North American sales of iconic brands.
• International segment: Growing at +2.5% YoY, now 26% of total revenue, driven by expansion in Europe and Latin America.
• SG&A investment: $930M in Q3 2025, focused on marketing, sales, and global distribution.
• Future growth areas: International markets and new product innovation, though not yet major profit contributors.

Visualizing KHC's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially SG&A) taking the largest chunk.
• Even after significant marketing and administrative costs, 9.9% of revenue drops to the bottom line.

Key Takeaways

• KHC's money comes overwhelmingly from North American branded food sales
• High gross and net margins illustrate the power of KHC's scale and brand-driven business model
• Heavy investment in SG&A and marketing, balanced by efficiency in manufacturing and logistics
• Ongoing growth is driven by international expansion and new product launches

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FAQ About KHC's Income Statement

1. What is the main source of KHC's revenue in 2025?

KHC generates over 74% of its revenue from North American branded packaged food sales. International markets contribute 26%, with growth driven by expansion in Europe and Latin America.

2. How profitable is KHC in Q3 2025?

KHC reported net income of $615M in Q3 2025, with a net margin of approximately 9.9%, reflecting moderate profitability driven by scale, brand strength, and disciplined cost management.

3. What are the largest expense categories for KHC?

The biggest expenses on KHC's income statement are operating expenses, particularly Sales, General & Administrative (SG&A) costs, which reached $930M in Q3 2025 (14.9% of revenue), as KHC prioritizes marketing, sales, and global distribution.

4. Why does International Revenue operate at a loss?

International, despite generating $1.60B in revenue, posted lower margins due to KHC's aggressive investments in market expansion and brand building, believing these will drive long-term growth—even if the division is less profitable today.

5. How does KHC's effective tax rate compare to previous years?

KHC's effective tax rate in Q3 2025 was 24.0%, consistent with previous years. This moderate rate is primarily due to international structuring and tax benefits from operational efficiencies.