Monster Beverage Corporation (MNST) Earnings

Management highlights

### Overall Financial Performance - Monster Beverage reported its first-ever quarterly net sales above $2.5 billion, reaching $2.54 billion in Q2 2026, a 20.2% increase from $2.11 billion in Q2 2025. FX provided a $48.5 million favorable tailwind, with FX-adjusted net sales up 17.9% overall (18.5% excluding alcohol brands). - Gross margin was 55.9% in Q2 2026, up from 55.7% in Q2 2025, driven by pricing actions and favorable product mix, partially offset by higher aluminum costs and geographic sales mix shifts. Operating income increased 17.2% to $740.4 million, and diluted EPS increased 19% to $0.59 year-over-year. Category and Market Position - The global energy drink category remains healthy with robust growth, driven by rising household penetration, broad functional and lifestyle appeal across consumer segments, and diverse price point offerings. Monster gained market share in most global markets, including the core Monster brand in the U.S. - Regional category growth (all FX-neutral): +7.1% in U.S. all outlets, +10.4% in tracked EMEA markets, +11.7% in tracked APAC channels, +23.8% in tracked Latin America markets. Monster outgrew the category in most regions. Marketing and Innovation - Monster ran extensive, targeted marketing in Q2 2026, including sponsorship of UFC for America's 250th anniversary celebrations, multiple motorsports events (Supercross, MotoGP, NASCAR, Isle of Man TT), the Morgan Wallen concert tour, and the Stagecoach Country Music Festival. A new multi-year partnership with the Big 12 Conference for naming rights to football and basketball seasons was also announced. - Limited-time 250th anniversary offerings across the Ultra, Juice Monster, Rain, and Bang brand families performed well, with the Ultra Red, White and Blue LTO accounting for 5% of U.S. IRI channel sales from its May launch. Innovation from late 2025 and early 2026 was meaningfully additive to Q2 sales growth. Geographic Operational Highlights - **U.S. and Canada**: Monster gained 70 bps of value market share in Q2. Zero sugar offerings (led by the Ultra family, up 19% YoY) and full sugar offerings (led by Juice Monster, up 26% YoY) both drove strong growth. A new Marriott on-premise partnership via Coca-Cola is expected to open meaningful new distribution opportunities. - **EMEA**: Net sales grew 27.2% in USD (22.2% FX-neutral), with gross margin expanding 270 bps to 38.8%. Monster captured 46% of total regional category value growth and gained 220 bps of market share, led by zero sugar products (Monster holds 44.5% value share in European zero sugar energy drinks, capturing 38% of category zero sugar growth). New SKU rollouts for Ultra and Juiced Monster continued, and Bang Energy was extended to Greece as an affordable offering. - **APAC**: Net sales grew 35.7% in USD (36.7% FX-neutral), with gross margin stable at 41.4%. Standout growth included China (+62.5% USD, +54% local currency) and India (+84% USD, +100.3% local currency). Monster Green launched in Coca-Cola Japan vending machines in June and got off to a strong start. - **Latin America**: Net sales grew 56.1% in USD (40.4% FX-neutral), with gross margin expanding 100 bps to 46.2%. Brazil led growth at +82% USD (61.6% local currency), and is on track to become one of Monster's top individual markets.

Guidance

- Management did not provide formal full-year or next-quarter quantitative guidance, but reaffirmed its long-term growth strategy centered on product innovation, expanding household penetration, and growing market share globally. - Management expects a continued modest sequential increase in aluminum costs through at least the end of 2026 due to elevated Midwest aluminum premiums tied to ongoing tariff impacts. - Select pricing actions are planned to take effect in the U.S. in Q4 2026, with ongoing periodic, opportunistic low single-digit pricing increases planned across individual EMEA markets. - A full 2027 innovation pipeline will be presented at the October NACCS conference, and a company investor meeting will be held in New York City on December 1, 2026. - The company's two-for-one common stock split will begin trading at the split-adjusted price on August 11, 2026. Approximately $900 million remains available under the existing share repurchase authorization as of August 5, 2026.

Segment performance

1. Monster Energy Drink Segment: Net sales reached $2.36 billion in Q2 2026, a 21.6% increase from $1.94 billion in Q2 2025. On a foreign currency adjusted basis, net sales increased 19.3% year-over-year. This segment contributed 92.9% of total company net sales in Q2 2026. 2. Strategic Brand Segment: Net sales were $143.7 million in Q2 2026, a 10.6% increase from $129.9 million in Q2 2025. On a foreign currency adjusted basis, net sales increased 8.1% year-over-year. This segment contributed 5.7% of total company net sales in Q2 2026. 3. Alcohol Brand Segment: Net sales decreased 15.2% to $32.2 million in Q2 2026 from $38 million in Q2 2025. This segment contributed 1.3% of total company net sales in Q2 2026. By region, international net sales reached $1.16 billion (46% of total net sales) in Q2 2026, up 34.6% year-over-year (29% FX-adjusted), while U.S. and Canada net sales increased 11.5% year-over-year.

Risks & headwinds

- The global tariff landscape remains dynamic and complicated, and has materially increased the Midwest premium for aluminum, raising aluminum can costs for the company. While current tariffs are not expected to have a material impact on full-year operating results, cost pressures are expected to persist through the end of 2026. - Higher freight and fuel costs increased distribution expenses in Q2 2026, and these costs remain volatile depending on market and geopolitical conditions. - Single-month sales figures (like the preliminary July 2026 sales estimates provided) are highly volatile and prone to distortion from factors including shifting selling day counts, holiday timing, promotion timing, bottler inventory adjustments, and production scheduling, and should not be used to extrapolate full-quarter or full-year results. - International sales carry inherent gross margin pressure relative to U.S. sales, which creates downward pressure on the company's overall gross margin percentage as international sales grow as a share of total revenue.

Analyst Q&A

• Q: Asked for additional detail on the planned pricing actions, including where they will take place and their approximate magnitude. /

  A: Management noted that Monster follows a consistent, country-by-country approach to periodic pricing globally, with a strategic goal of growing revenue faster than volume and profit faster than revenue. In the U.S., selective pricing actions are planned for Q4 2026, with the strategy continuing to support growth for both Monster and its retail partners. In EMEA, the company has already implemented low single-digit aggregate pricing in 2026, and will continue opportunistic pricing aligned with local category and competitive dynamics.

• Q: Asked what is driving the strong acceleration of international growth after a period of slower expansion, and how sustainable this growth is. /

  A: Management attributed the sustained outperformance to multiple factors: strong double-digit category growth driven by expanding multi-occasion, cross-demographic appeal; Monster capturing 46% of EMEA category growth, with innovation driving 58% of Monster's regional growth; improved coordination and expanded distribution with Coca-Cola bottling partners, including expanded branded cooler footprints and in-store energy zones; and a balanced portfolio led by zero sugar products, which drive 63% of European category growth with Monster capturing 61% of that zero sugar growth. Strong, broad-based growth is also seen in LATAM (led by Brazil) and across high-potential emerging markets in APAC including China and India, with long runway for further share gains.

• Q: Asked to compare 2026 innovation activity to prior years, share results of the America 250th limited time offerings, and provide an update on the female-oriented FLIRT energy line. /

  A: Management shifted to staggered innovation launches in 2026 versus historical one-time launch windows, which improved execution. The anniversary LTOs were very successful, with Ultra Red, White and Blue accounting for 5% of U.S. IRI channel sales post-launch. Additional 2026 fall innovation is planned, with a full 2027 innovation pipeline to be shared at the October NACCS conference. FLIRT remains in early stages, with full marketing spend only starting in June 2026; the company remains committed to the brand, with a planned LTO for late 2026 and new product development planned for 2027.

• Q: Asked how Monster's collaboration with Coca-Cola on the recent Marriott FSOP deal reflects a broader change in partnership, and what this means for future large on-premise opportunities. /

  A: Management confirmed that the relationship with Coca-Cola's new C-suite has grown much closer, and the two companies are increasingly collaborating on large global and national FSOP accounts. As energy drinks have become a required offering for most large on-premise customers, Monster's complementary product portfolio to Coca-Cola's core offerings creates significant shared opportunity, and the company expects continued close collaboration with the Coca-Cola system to expand the FSOP business going forward.