Mondelez
MDLZ · NasdaqHedge marks, not snack sales, drove the profit jump
Operating income rose 136.3% on revenue up 2.3%, which the filing credits mainly to gains on commodity and currency hedges, a timing effect.
Q3 FY2026, the quarter to Sep 30, 2026 · 10-Q filed Oct 29, 2026
- Operating margin
- 17.6%
- Net income
- $1.3B
- Free cash flow, quarter
- $991.0M
Largest source of revenue: Biscuits & Baked Snacks, 49.1% of the total.
Where Mondelez's money goes
- 01
Hedge marks, not snack sales, drove the profit jump
Operating income rose 136.3% on revenue up 2.3%, which the filing credits mainly to gains on commodity and currency hedges, a timing effect.
Why it matters
Cost of sales fell 15.3% to $6.04B while net revenues rose 2.3% to $9.97B. Gross margin reached 39.4% against 26.8% a year earlier, and operating margin 17.6% against 7.6%. The filing attributes the higher operating margin 'primarily' to 'a favorable year-over-year change in mark-to-market impacts from commodity and foreign currency derivatives': unrealized gains on contracts that hedge future ingredient purchases.1
Management judges the regions on segment operating income, which leaves these hedge effects out. North America's segment profit equals 25.5% of reported operating income, AMEA's 21.2%, Europe's 19.3% and Latin America's 9.7%. The rest of the reported total sits outside the regions, mainly in the hedge gains, net of corporate costs and amortization.1
AnalysisHedge gains are booked when the contracts are revalued and realized only as the hedged cocoa and other inputs pass through inventory, so they can swing the other way in a later quarter. Operating income went from $808M in Q1 FY2026 to $1.95B in Q2 FY2026 and $1.76B in Q3 FY2026, on net revenues that stayed between $9.36B and $10.08B.
Net earnings attributable to Mondelez rose a smaller 75.6%, to $1.31B. The year-earlier quarter included a $169M gain on a former equity investment that did not recur, and the effective tax rate rose to 24.6% from 19.7%.1
- 02
Europe sells the most and earns the least per dollar
Europe brings in 35.6% of revenue but 19.3% of operating income, a 9.5% segment margin, as prices fall back after last year's increases.
Why it matters
Segment operating income as a share of segment revenue this quarter: AMEA 17.0%, North America 15.7%, Latin America 12.3% and Europe 9.5%. Europe's net revenues of $3.55B fell as net pricing subtracted 3.7 pp, which the filing ties to 'the lapping of input cost-driven pricing actions taken in the prior year'. Volume/mix added 1.6 pp.1
The company says the elasticity from its earlier price increases 'adversely impacted consumer demand, particularly in Europe'. It also centres its new restructuring there: the actions to optimize the supply chain and cut overhead were 'primarily undertaken by our Europe segment', and the quarter's brand write-downs fell mostly on European biscuit brands.1
AnalysisEurope is where pricing met its limit. A region carrying more than a third of sales at the lowest margin of the four weighs on the whole group. Its profit recovery depends on volume holding up as prices ease, while the restructuring lowers its cost base.
- 03
AMEA earns more than Europe on 61% of its revenue
AMEA's $372M of segment profit tops Europe's $339M on $2.18B of revenue, with volume/mix adding 5.5 pp and pricing 2.2 pp.
Why it matters
AMEA's revenue grew on volume/mix of 5.5 pp, with volume growth 'in all categories except beverages', plus net pricing of 2.2 pp. Its segment operating income of $372M was 17.0% of its $2.18B revenue, the highest margin of the four regions, and 21.2% of reported operating income.1
Part of this quarter's AMEA profit does not come from selling snacks. The filing lists 'a favorable year-over-year change in acquisition-related items' first among the reasons its segment profit rose, ahead of higher net pricing, productivity and volume/mix.1
Latin America shows the other route to growth: net pricing of 6.1 pp against volume/mix of 0.8 pp, with pricing 'driven by input cost-driven pricing actions'. Its segment margin was 12.3%.1
AnalysisGrowth from volume, as in AMEA, adds buyers and shelf space. Growth from price, as in Latin America, depends on consumers accepting it, and Europe's experience shows it can turn into lost volume once the increases stack up.
- 04
Cost relief is funding advertising, not just margin
Selling, general and administrative expenses rose 12.1%, over five times revenue growth of 2.3%, which the filing ties mainly to advertising and consumer promotion.
Why it matters
Selling, general and administrative expenses reached $2.01B, 20.2% of revenue, up 1.77 pp on a year earlier. Setting aside ERP, currency and other items, the filing says the increase 'was driven primarily by higher advertising and consumer promotion costs and higher other selling, general and administrative expenses'.1
The filing names where the room came from: lower cocoa, dairy and sugar costs and manufacturing productivity, partly offset by higher packaging, nuts, edible oils, energy and grain costs.1
In North America the spending has not yet shown up in volume. Net pricing added 1.6 pp to revenue while 'volume/mix was flat', and segment operating income of $448M fell, which the filing attributes first to 'higher advertising and consumer promotion costs' and higher raw material costs.1
AnalysisSpending lower input costs on brand support is a choice to buy volume rather than bank margin. Whether it pays will show in volume over the coming quarters, in North America above all.
Sources
- 1.Mondelez 10-Q for the period to 2026-09-30 (the filing), Oct 29, 2026, read Nov 2, 2026
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Growth, profit and margin
Revenue went from $35.9B in FY2007 to $38.5B in FY2025, the operating margin from 11.6% to 9.2%, over 18 years.
- Revenue$38.5B
- Operating income$3.5B
- Operating margin9.2%
- Period
- Q3 FY2026
- Revenue
- $10.0B
- Operating income
- $1.8B
- Operating margin
- 17.6%
- Net income
- $1.3B
- Free cash flow
- $991.0M
Does the profit turn into cash?
Q3 FY2026: free cash flow of $991.0M against net income of $1.3B in the quarter.
- Operating cash flow$4.5B
- Capital expenditure$1.3B
- Free cash flow$3.2B
- Net income$2.5B
Capital expenditure is drawn below the axis as cash out. Cash conversion is operating cash flow over net income, shown in the tooltip for years with a profit.
Financial data and sources
How the revenue mix has shifted
Each breakdown the filing reports, as shares of revenue, for every period it restates.
Segment Reporting - Net Revenues by Product Category (Details). The filing restates this breakdown for 1 period.
Click a member to isolate it across the years shown.
The figures
Margins, cash and growth for the period, each with what it was computed from.
Where revenue comes from
Every breakdown the filing reports for the period, with each item's share.
Revenue streams
| Biscuits & Baked Snacks | $4.9B | 49.1% |
| Chocolate | $3.1B | 31.0% |
| Gum & Candy | $1.2B | 11.6% |
| Meals | $623.0M | 6.3% |
| Beverages | $208.0M | 2.1% |
Source10-Q, us-gaap:Revenues, as reported in the 10-Q filed 2026-10-29
Segments
| Europe | $3.6B | 35.6% |
| North America | $2.8B | 28.6% |
| Amea | $2.2B | 21.9% |
| Latin America | $1.4B | 13.9% |
Source10-Q, us-gaap:Revenues, as reported in the 10-Q filed 2026-10-29
What it costs
The cost lines beneath operating income, each as a share of revenue, then the operating result.
Costs are reported by function: what it cost to make what was sold, then the expenses of selling, developing and administering.
| Cost line | Q3 FY2026 | Of revenue | Source |
|---|---|---|---|
| Cost of sales | $6.0B | 60.6% | Source10-Q, us-gaap:CostOfGoodsAndServicesSold, as reported in the 10-Q filed 2026-10-29 |
| Operating income | $1.8B | 17.6% | Source10-Q, us-gaap:OperatingIncomeLoss, as reported in the 10-Q filed 2026-10-29 |
Operating income by segment
Where the operating profit is earned, as the filing reports it.
Segments
| North America | $448.0M | 25.5% |
| Amea | $372.0M | 21.2% |
| Europe | $339.0M | 19.3% |
| Latin America | $170.0M | 9.7% |
Shares of operating income. The segments do not sum to the total; the filing states them beside it. Source10-Q, us-gaap:OperatingIncomeLoss, as reported in the 10-Q filed 2026-10-29
Operating figures the company states
From the text of the filing rather than its statements, each with the sentence that states it.
View source
Net revenues increased $165 million (8.2%), due to favorable volume/mix (5.5 pp), higher net pricing (2.2 pp) and favorable currency translation rate changes (0.5 pp).
View source
Net revenues increased $165 million (8.2%), due to favorable volume/mix (5.5 pp), higher net pricing (2.2 pp) and favorable currency translation rate changes (0.5 pp).
View source
Net revenues decreased $122 million (3.3%), due to lower net pricing (3.7 pp) and unfavorable currency translation rate changes (1.2 pp), partially offset by favorable volume/mix (1.6 pp).
View source
Net revenues decreased $122 million (3.3%), due to lower net pricing (3.7 pp) and unfavorable currency translation rate changes (1.2 pp), partially offset by favorable volume/mix (1.6 pp).
View source
Net revenues increased $149 million (12.0%), due to higher net pricing (6.1 pp), favorable impact of currency-related items (5.1 pp) and favorable volume/mix (0.8 pp).
View source
Net revenues increased $149 million (12.0%), due to higher net pricing (6.1 pp), favorable impact of currency-related items (5.1 pp) and favorable volume/mix (0.8 pp).
View source
Pricing 1.9 (0.7) 0.3
View source
Net revenues increased $31 million (1.1%), due to higher net pricing (1.6 pp), partially offset by lapping prior year net revenue from a divestiture (0.3 pp) and unfavorable currency translation rate changes (0.2 pp).
View source
As of September 30, 2026, our consolidated entities in Argentina, Türkiye, Egypt and Nigeria are operating in highly inflationary economies and represent 1.3 %, 0.6 %, 0.5 % and 0.3 %, respectively, of our consolidated net revenues for the three months ended September 30, 2026 and 1.4 %, 0.6 %, 0.5 % and 0.3 % of our consolidated net revenues for the nine months ended September 30, 2026.
View source
During the third quarter of 2026, Ukraine generated 0.3% and Russia generated 3.1% of our consolidated net revenue.
View source
During the third quarter of 2026, Ukraine generated 0.3% and Russia generated 3.1% of our consolidated net revenue.
View source
Vol/Mix 2.2 pp 1.5 pp 1.8 pp
The statements, as filed
The income statement, cash flow statement and balance sheet in the company's own order and words. Every line links to the filing.
Income statement19 lines, as presented in the 10-Q
Cash flow statement3 lines, as presented in the 10-Q
Year to date, as a quarterly filing reports it.
| Line | Q3 FY2026 | A year earlier | Change | Source |
|---|---|---|---|---|
| Cash provided by/(used in) operating activities | ||||
| Net earnings | $1.31B | $746.0M | +75% | Source10-Q, us-gaap:ProfitLoss, as reported in the 10-Q filed 2026-10-29 |
| Adjustments to reconcile net earnings to operating cash flows: | ||||
| Gain on divestiture (shown as a deduction) | ($0) | $0 | Source10-Q, us-gaap:GainLossOnSaleOfBusiness, as reported in the 10-Q filed 2026-10-29 | |
| Cash, cash equivalents and restricted cash: | ||||
| Balance at end of period | $1.67B | $1.47B | +14% | Source10-Q, us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents, as reported in the 10-Q filed 2026-10-29 |
Balance sheet38 lines, as presented in the 10-Q
About this data
- Source
- Mondelez 10-Q, accession 0001628280-26-068256, filed Oct 29, 2026, read on Nov 2, 2026.
- History
- From the SEC's XBRL company facts, the value from the latest filing that stated each period.
- Reading
- Paragraphs marked Analysis are CXProWealth's reading; everything else is the filing's own numbers and words, or a cited source.
- Version
- methodology business-lens-1.0 · schema 1.2.0 · run business-lens-2026-11-02
What holds Mondelez's model up, and what could bend it
Competitive edge
Biscuits, not chocolate, carry half of revenue
Biscuits & Baked Snacks brought in $4.89B, 49.1% of revenue, and grew 2.2%, while Chocolate, at 31.0% of revenue, grew 0.13%.
The detail
By category this quarter: Biscuits & Baked Snacks $4.89B (49.1%), Chocolate $3.09B (31.0%), Gum & Candy $1.15B (11.6%), Meals $623M (6.3%) and Beverages $208M (2.1%). Gum & Candy grew fastest, 9.8%, and gained 0.79 pp of share. Volume/mix grew 'across all regions and categories, except beverages', adding 1.8 pp to organic growth against 0.3 pp from net pricing.1
AnalysisMany biscuits rely more on grains, sugar and fats than on cocoa, so the largest category is less tied to the input behind the company's sharpest cost swings. That spread across categories, and across four regions, is part of what keeps the group's results from resting on any one commodity.
Earnings swing, but cash generation stays narrow
Free cash flow stayed between $2.85B and $3.60B a year from FY2018 to FY2025, while net income ranged from $2.45B to $4.96B.
The detail
This quarter capital spending was 2.9% of revenue, operating cash flow of $1.28B was 0.98 times net earnings, and free cash flow was $991M, 9.9% of revenue, against $418M in Q3 FY2025. In FY2025, net income fell to $2.45B while free cash flow was $3.24B.1
AnalysisSnack factories last a long time and need little reinvestment relative to sales, so most of each year's earnings turn into cash. Hedge marks, pension settlements and one-off gains move reported earnings; the cash the brands produce moves far less, and it is what funds the dividend and share repurchases.
What to watch
Cocoa stays elevated, and pricing may not cover it
The filing expects cocoa to stay high by historical standards and warns that prices and hedges may not fully cover it.
The detail
Cocoa prices are 'below prior year peak levels' but 'expected to remain elevated compared to historical levels in the near- and medium-term'. The company says it 'may not be able to increase prices sufficiently to fully cover the incremental costs of cocoa prices', that its hedging 'may not protect us', and that dairy can be hedged only in part.1
FY2025, the peak cocoa year, shows the exposure. Revenue rose to $38.54B from $36.44B, but cost of revenue rose to $27.60B from $22.18B, gross margin fell to 28.4% from 39.1%, and operating income fell to $3.55B from $6.35B.1
AnalysisThose annual figures mix the cost itself with hedge marks, so one year does not separate the two cleanly. Chocolate, 31.0% of revenue, grew 0.13% this quarter and lost 0.67 pp of share, and Europe's volume response to the last round of increases shows what a second round could cost in demand.
Russia and tariffs put revenue at political risk
Russia generated 3.1% of net revenue this quarter, and the company expects new U.S. tariffs to hurt both revenue and cost of goods sold.
The detail
The company keeps operating in Russia, with new capital investment and advertising suspended, and warns of 'the temporary or permanent loss of assets due to expropriation', impairment or deconsolidation of the business. Ukraine generated 0.3% of net revenue.1
Many products and significant inputs cross borders. The company expects new tariffs under U.S. trade law to 'adversely impact our revenue and cost of goods sold', with significant effects if more are imposed. Goods moved under the U.S.-Mexico-Canada Agreement are mostly exempt, with 'no assurance' that continues.1
Argentina, accounted for as a highly inflationary economy along with Türkiye, Egypt and Nigeria, made up 1.3% of net revenue, and the company warns that future currency impacts 'could be significantly different from historical levels'.1
Some brand values sit close to their book value
Asset impairments and exit costs rose to $128M from $41M, and the filing names further brands whose fair value barely exceeds their carrying value.
The detail
This quarter's brand write-downs hit biscuits & baked snacks brands in Europe and North America, 'driven by lower expectations of future business performance' and 'changes in management strategy'. The same line carries restructuring charges, mainly in Europe.1
Including the brands written down this quarter, the company identifies a group of brand intangibles whose fair value exceeds book value by only a small margin, and says 'one or more of those indefinite-life intangible assets could become impaired' if their sales and earnings forecasts weaken.1
AnalysisBrands bought through acquisitions such as Nabisco, LU, Cadbury and Clif Bar sit on the balance sheet at their purchase value. A write-down is non-cash, but it records where the portfolio is weakest: brands whose growth no longer supports the price once paid for them.
Sources
- 1.Mondelez 10-Q for the period to 2026-09-30 (the filing), Oct 29, 2026, read Nov 2, 2026
Mondelez, further in
Member research, then your own questions on ChatGPT.
What could change the outlook
What Mondelez's numbers depend on from here, read from the filing: the conditions behind this period's margins and growth, and where a change would show first.
- What is Mondelez earning once the hedge marks settle?
How regional profit, the cost of cocoa and the advertising push fit together, and which of them the coming quarters' numbers depend on most.
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Have a question about Mondelez?
Explore its profit drivers, competitive edge, risks, or your own investment and business questions with CXProWealth on ChatGPT.
- How much of Mondelez's Q3 FY2026 operating income came from hedge gains rather than from its four regions?
- Why does Europe earn a 9.5% segment margin for Mondelez while AMEA earns 17.0%?
- Is Mondelez's extra advertising spending showing up in volume, especially in North America?
Business Lens describes Mondelez from its own filings with the SEC. It is not a view on its shares, a target, or advice to buy, sell or hold anything; figures are as filed and may be restated by the company later. The filing, the dates and the version are under the financial data above.