Monster(MNST) - 2025 Q2 - Quarterly Results

Financial Performance Highlights Q2 2025 Key Financial Results Monster Beverage reported record quarterly net sales for Q2 2025, surpassing the $2.0 billion threshold for the first time, with net sales increasing by 11.1% to $2.11 billion and net income per diluted share rising by 21.1% to $0.50 - The company achieved record quarterly net sales, exceeding the $2.0 billion threshold for the first time in its history[6][19] Q2 2025 Financial Highlights (YoY Growth) | Metric | Value | Growth (GAAP) | Growth (Non-GAAP Adjusted) | | :--- | :--- | :--- | :--- | | Net Sales | $2.11 billion | 11.1% | 11.4% (FX Adjusted) | | Operating Income | $631.6 million | 19.8% | 21.5% | | Net Income per Diluted Share | $0.50 | 21.1% | 23.0% | H1 2025 Key Financial Results For the first six months of 2025, net sales increased by 4.4% to $3.97 billion, with net income growing 7.4% to $931.8 million, resulting in a diluted EPS of $0.95 Six-Months Ended June 30, 2025 Financial Summary | Metric | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Net Sales | $3.97 billion | $3.80 billion | +4.4% | | Operating Income | $1.20 billion | $1.07 billion | +12.1% | | Net Income | $931.8 million | $867.4 million | +7.4% | | Diluted EPS | $0.95 | $0.83 | +14.5% | - Net sales on a foreign currency adjusted basis increased by 6.0% for the six-month period[21] Detailed Financial Analysis Sales Performance by Segment and Geography Sales growth in Q2 2025 was driven by the Monster Energy® Drinks segment (+11.2%) and the Strategic Brands segment (+18.9%), while international sales were a key growth driver, increasing 15.8% and accounting for 41% of total net sales Q2 2025 Net Sales by Segment (in millions) | Segment | Q2 2025 Net Sales | Q2 2024 Net Sales | YoY Growth | | :--- | :--- | :--- | :--- | | Monster Energy® Drinks | $1,940 | $1,740 | +11.2% | | Strategic Brands | $129.9 | $109.2 | +18.9% | | Alcohol Brands | $38.0 | $41.6 | -8.6% | | Other | $6.4 | $7.0 | -8.5% | - Net sales to customers outside the United States increased by 15.8% to $864.2 million, representing 41% of total net sales in Q2 2025, up from 39% in Q2 2024[10] Profitability and Expense Analysis Gross profit margin for Q2 2025 improved to 55.7% from 53.6% YoY, attributed to pricing actions, supply chain optimization, and lower input costs, while operating expenses as a percentage of sales remained stable at 25.8% - Gross profit as a percentage of net sales increased to 55.7% from 53.6% in Q2 2024, primarily due to pricing actions, supply chain optimization, and lower input costs[11] Q2 Operating Expenses as a Percentage of Net Sales | Expense Category | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Distribution | 3.9% | 4.6% | | Selling | 9.3% | 10.1% | | General & Administrative | 12.6% | 11.2% | | Total Operating Expenses | 25.8% | 25.9% | - General and administrative expenses included $13.8 million of litigation provisions and a $14.4 million increase in stock-based compensation compared to the prior year[13] - Operating income for Q2 2025 increased 19.8% to $631.6 million, with the effective tax rate rising to 24.4% from 22.9% in the prior-year quarter[16][17] Corporate Developments Share Repurchase Program The company did not repurchase any of its common stock during the second quarter of 2025, with approximately $500.0 million remaining available for repurchase under the existing authorization as of August 6, 2025 - No shares of the Company's common stock were repurchased during the 2025 second quarter[25] - As of August 6, 2025, approximately $500.0 million remained available for repurchase under the authorized program[25] Management Commentary CEO Remarks CEO Hilton H. Schlosberg highlighted the record Q2 net sales, attributing the performance to brand strength, product innovations, and global team efforts, while noting positive category trends supporting long-term growth - The CEO emphasized that record net sales underscore the strength of the company's brands and the success of product innovations[19] - Management identified increased household penetration and per capita consumption of energy drinks as positive trends for the category[20] - A robust pipeline of innovative products is considered central to the company's long-term growth strategy[20] Financial Statements Condensed Consolidated Statements of Income The income statement details the company's financial performance for Q2 2025, with net sales growing 11.1% to $2.11 billion and net income increasing 14.9% to $488.8 million, and for the six-month period, net sales rose 4.4% to $3.97 billion with net income up 7.4% to $931.8 million Q2 2025 Income Statement Highlights (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net sales | $2,111,593 | $1,900,597 | | Gross profit | $1,176,413 | $1,019,506 | | Operating income | $631,622 | $527,163 | | Net income | $488,794 | $425,369 | | Diluted EPS | $0.50 | $0.41 | H1 2025 Income Statement Highlights (in thousands) | Line Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net sales | $3,966,150 | $3,799,695 | | Gross profit | $2,224,375 | $2,046,634 | | Operating income | $1,201,367 | $1,069,154 | | Net income | $931,787 | $867,418 | | Diluted EPS | $0.95 | $0.83 | Condensed Consolidated Balance Sheets The balance sheet as of June 30, 2025, shows total assets of $8.73 billion, an increase from $7.72 billion at the end of 2024, with key changes including a rise in cash and cash equivalents to $1.93 billion and the elimination of long-term debt Key Balance Sheet Items (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,926,927 | $1,533,287 | | Total current assets | $4,429,340 | $3,641,504 | | Total Assets | $8,729,888 | $7,719,089 | | Total current liabilities | $1,258,618 | $1,097,519 | | Long-term debt | $0 | $373,951 | | Total stockholders' equity | $7,191,304 | $5,957,718 | Non-GAAP Financial Measures Reconciliation Reconciliation of Adjusted Performance Metrics The company provides non-GAAP metrics to offer investors a clearer view of ongoing operations by adjusting for factors like foreign currency impact, the Alcohol Brands segment, litigation provisions, and certain stock-based compensation Q2 2025 Net Sales Reconciliation (in thousands) | Description | Amount | YoY Growth | | :--- | :--- | :--- | | Net Sales (GAAP) | $2,111,593 | 11.1% | | Currency Impact | $5,027 | N/A | | Adjusted Net Sales (FX Neutral) | $2,116,620 | 11.4% | Q2 2025 Operating Income Reconciliation (in thousands) | Description | Amount | | :--- | :--- | | Operating Income (GAAP) | $631,622 | | Alcohol Brands Segment Adj. | $14,632 | | Litigation Provisions | $13,818 | | Stock-Based Compensation Adj. | $7,869 | | Adjusted Operating Income | $667,941 | Q2 2025 Diluted EPS Reconciliation | Description | Amount | YoY Growth | | :--- | :--- | :--- | | Diluted EPS (GAAP) | $0.50 | 21.1% | | Alcohol Brands Segment Adj. | $0.01 | N/A | | Litigation Provisions Adj. | $0.01 | N/A | | Adjusted Diluted EPS | $0.52 | 23.0% |