MNST Monster Beverage 10-Q 2026-09-30 section summaries

Monster Beverage Corporation (MNST) — Q3 and 9M 2026

Unaudited; periods ended September 30, 2026. Share data is adjusted for the 2-for-1 stock split issued August 10, 2026.

Consolidated results

Q3 sales grew 16.65%, while operating income rose 6.42% and net income 8.39%; operating margin contracted to 28.05% from 30.73%, and gross margin to 54.65% from 55.73%. For 9M, sales growth was 20.94%, versus 16.67% growth in operating income and 18.28% in net income; operating margin was 29.37% versus 30.45%, and gross margin 55.19% versus 55.96%. Thus, 9M sales growth was stronger than Q3’s, but expense growth continued to pressure margins.

Reportable segments

Monster Energy Drinks was the primary growth engine; Alcohol Brands and Other revenue declined. Alcohol Brands’ segment loss narrowed. Corporate payroll was $121.226 million versus $112.924 million, and corporate overhead excluding payroll was $90.682 million versus $52.253 million; income before taxes was $753.496 million versus $689.537 million.

For 9M, Monster Energy Drinks revenue was $6,918.166 million versus $5,679.711 million and segment profit was $2,584.176 million versus $2,228.332 million. Other revenue was $15.471 million versus $19.169 million. Monster’s Q3 revenue growth of 17.1% was slower than its 9M growth of 21.8%; Other’s Q3 decline of 29.5% was steeper than its 9M decline of 19.3%. Total segment profit was $2,768.670 million versus $2,363.518 million for 9M.

Monster Energy Drinks primarily sells ready-to-drink beverages through bottlers and distributors; Strategic Brands sells concentrates and beverage bases; Alcohol Brands sells craft beer, flavored malt beverages and hard seltzers. Management says Monster Energy Drinks generally earns higher net revenue per case but lower gross-margin percentages than Strategic Brands.

Balance sheet

Tangible equity (equity less goodwill and other intangible assets) was approximately $7.1263 billion. Goodwill was unchanged; $693.644 million related to Monster Energy Drinks and $637.999 million to Strategic Brands. Alcohol Brands had $86.3 million of accumulated goodwill impairment. No goodwill acquisitions were recorded. The company had substantial cash and investments and no borrowings outstanding under its credit facilities.

Cash flow and capital allocation

Operating cash flow declined despite higher earnings, including cash uses from receivables of $361.987 million and inventory of $126.652 million; inventory had provided $58.387 million in 9M 2025. Investing outflow primarily reflected $2.1892 billion of available-for-sale investment purchases, partly offset by $870.623 million of sales and maturities. Available-for-sale investments were $2.4829 billion at fair value ($2.4969 billion amortized cost), versus $1.1644 billion fair value ($1.1632 billion amortized cost) at year-end; the portfolio was investment grade. Shares outstanding were 1.9562 billion at December 31, 2025 and 1.9574 billion at September 30, 2026.

Other material developments

International sales rose to $1.20 billion in Q3 from $937.1 million, or 47% of sales versus 43%; 9M international sales were $3.43 billion versus $2.53 billion, or 46% versus 41%. Latin America and Caribbean was the fastest-growing geographic region in both periods. Coca-Cola Europacific Partners represented 17% of sales in both Q3 periods; Coca-Cola Consolidated represented 9%.

TCCC controls approximately 20.9% of voting interests and participates in distribution. Commissions on sales to TCCC subsidiaries and related parties reduced net sales by $38.9 million in Q3 and $109.9 million in 9M; commissions to independent bottlers were recorded in operating expenses ($16.6 million and $49.7 million, respectively). Related-party receivables were $240.558 million at September 30, 2026, versus $166.618 million at year-end. Deferred revenue from distributor arrangements was $194.6 million, versus $205.3 million; upfront payments are generally recognized over agreement lives, often 20 years.

The company impaired a jointly owned Kona property by $19.9 million; its post-impairment carrying value was $20.0 million. The $750 million term loan was repaid in April 2025; the amended $500 million revolver matures in May 2029 and was undrawn, as was a separate $15 million China credit line. Approximately $186 million of purchase commitments, primarily for raw materials, and $738 million of contractual obligations, primarily sponsorships and marketing, remained.

Q3 share repurchases were approximately 2.3 million shares for about $100 million at an average $43.87 per share; approximately $800 million remained available under repurchase plans as of November 4, 2026. 9M stock-based compensation was $94.3 million versus $86.7 million. At quarter-end, 40.797 million options had $779.210 million aggregate intrinsic value; 4.090 million RSUs/PSUs were nonvested, of which 3.8 million were expected to vest. Accumulated other comprehensive loss widened to $149.472 million from $60.841 million at year-end, including a $50.587 million currency-translation loss.

Monster Beverage Corporation (MNST) — Q3 and nine months ended September 30, 2026

Consolidated results

Q3 sales grew 16.7% (16.3% excluding $8.1M of favorable FX); 9M sales rose 20.9% (18.6% excluding $145.9M of favorable FX). Growth was therefore slower in Q3 than year to date. Management attributed the increase mainly to stronger worldwide demand for Monster Energy drinks.

Gross margin declined to 54.7% from 55.7% in Q3 and to 55.2% from 56.0% for 9M. Higher aluminum-can and freight-in costs and geographic mix pressured margins; pricing actions and product mix partly offset the impact. Q3 operating expenses grew faster than sales, lifting expenses to 26.6% of revenue from 25.0%; the 9M ratio was 25.8% versus 25.5%. Q3 G&A included a $19.9M property and equipment impairment charge and $14.7M in digital transformation expenses. Higher marketing spending reflected increased social, digital, media, sponsorship and endorsement activity. Q3 operating margin fell to 28.0% from 30.7%; the 9M margin declined to 29.4% from 30.4%.

Nine-month interest and other income included $105.9M of interest income versus $59.1M, $1.8M of interest expense versus $6.3M, and $17.6M of foreign-currency transaction losses versus $13.8M. The 9M income-tax provision was $549.4M versus $458.0M. Q3’s higher effective tax rate mainly reflected a lower stock-compensation tax deduction and more income in higher-tax jurisdictions, partly offset by a lower valuation allowance on foreign tax-credit carryforwards.

Segment results

Segment operating income is exclusive of corporate and unallocated expenses.

Q3 segment operating income totaled $930.6M versus $840.5M; corporate and unallocated expenses were approximately $(211.9)M versus $(165.1)M, reconciling to consolidated operating income. For 9M, Monster Energy Drinks revenue was $6.920B versus $5.680B and operating income was $2.580B versus $2.225B; Strategic Brands revenue was $426.8M versus $358.7M and operating income was $209.8M versus $186.0M. Alcohol Brands 9M revenue declined to $93.4M from $105.7M, while its operating loss narrowed to $26.0M from $54.0M. Other 9M revenue was $15.5M versus $19.2M, with operating income of $0.7M versus $3.1M.

Monster Energy Drinks growth reflected higher demand. Strategic Brands’ gains were led by Burn and Fury; concentrate sales can fluctuate with bottler production schedules. Alcohol Brands’ sales declines were primarily associated with lower sales of The Beast.

Volume, geography and billings

For 9M, energy-drink case sales increased 22.7% to 884.3M from 720.8M, while average net sales per case declined to $8.31 from $8.38. Alcohol Brands case sales fell to 6.6M from 7.6M for 9M. Q3 international sales rose 28.1% to $1.20B from $937.1M, representing about 47% of sales versus 43%; international operating income was $268.9M versus $210.4M. Coca-Cola Europacific Partners represented 17% of Q3 sales in both periods, and Coca-Cola Consolidated represented 9% in both.

Non-GAAP gross billings increased 14.8% in Q3 to $3.046B from $2.653B, and 20.3% for 9M to $8.804B from $7.316B. Promotional allowances, commissions and other expenses were $493.1M versus $465.8M in Q3 and $1.381B versus $1.182B for 9M; they declined as a share of billings to 16.2% from 17.6% in Q3 and to 15.7% from 16.2% for 9M. Gross billings are company-defined, non-GAAP invoiced amounts and do not directly represent cash receipts.

Liquidity, cash flows and risks

Despite higher net income, operating cash flow declined, with working-capital uses including increases of $362.0M in receivables, $126.7M in inventories and $87.5M in prepaid expenses and other assets. Investing outflow primarily reflected purchases of available-for-sale investments; financing outflow mainly reflected common-stock repurchases in 2026, compared with Credit Facility repayments in 2025.

At September 30, 2026, cash and cash equivalents were $2.15B, short-term investments $1.56B and long-term investments $927.0M; $1.06B of cash was held by foreign subsidiaries. No Credit Facility borrowings were outstanding and the company was in covenant compliance. The revolving facility has $500.0M capacity and matures in May 2029; the $750.0M term loan was repaid in April 2025, and revolving capacity was reduced from $750.0M to $500.0M in October 2025. Management expects cash, operating cash generation and credit access to cover requirements for at least 12 months. Capital expenditures, excluding share repurchases, are estimated at less than $250.0M through September 30, 2027.

Contractual commitments totaled $1.014B, including $738.017M of contractual obligations, $4.105M of finance leases, $85.957M of operating leases and $185.994M of purchase commitments; $547.727M was due within one year. Key risks include changing consumer preferences and competition, achieving Alcohol Brands profitability, aluminum and freight costs, tariffs and other trade-policy changes, potential energy-drink regulation or taxes, dependence on Coca-Cola and other distributors, product safety, operational or cybersecurity disruptions, alcohol-related liabilities, and economic and geopolitical uncertainty. Management said inflation did not significantly affect Q3 or 9M results.

For the three and nine months ended September 30, 2026, Monster Beverage reported no material changes in market risks from those disclosed in Part II, Item 7A of its Form 10-K. The section disclosed no new market-risk metrics or developments.

As of September 30, 2026, the CEO and CFO concluded that the company’s disclosure controls and procedures were adequate and effective. No changes to internal control over financial reporting during the quarter were identified as having materially affected, or being reasonably likely to materially affect, those controls.

Risk Factors

The 10-Q identifies no new or specific risk factors and directs investors to the risks described in Monster Beverage’s Form 10-K. It cautions that those risks are not exhaustive: risks currently considered immaterial, as well as risks that are unknown, could adversely affect the company’s business, operations, reputation, financial condition, or results.

For the three months ended September 30, 2026, none of MNST’s directors or officers adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement.