Monster(US:MNST)2025-08-08 00:04Part I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) The unaudited statements reveal significant growth in revenue and net income, an increase in total assets, and the full repayment of long-term debt Condensed Consolidated Balance Sheets Total assets grew to $8.73 billion, stockholders' equity rose to $7.19 billion, and long-term debt was eliminated by June 30, 2025 Balance Sheet Items (In Thousands) | Balance Sheet Items (In Thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $8,729,888 | $7,719,089 | | Cash and cash equivalents | $1,926,927 | $1,533,287 | | Total current assets | $4,429,340 | $3,641,504 | | Total Liabilities | $1,538,584 | $1,761,371 | | Total current liabilities | $1,258,618 | $1,097,519 | | Long-term debt | $— | $373,951 | | Total Stockholders' Equity | $7,191,304 | $5,957,718 | Condensed Consolidated Statements of Income Net sales and net income increased for both the second quarter and first half of 2025, driving higher diluted earnings per share Income Statement (Q2) | Income Statement (In Thousands, Except EPS) | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Net Sales | $2,111,593 | $1,900,597 | +11.1% | | Gross Profit | $1,176,413 | $1,019,506 | +15.4% | | Operating Income | $631,622 | $527,163 | +19.8% | | Net Income | $488,794 | $425,369 | +14.9% | | Diluted EPS | $0.50 | $0.41 | +22.0% | Income Statement (H1) | Income Statement (In Thousands, Except EPS) | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Net Sales | $3,966,150 | $3,799,695 | +4.4% | | Gross Profit | $2,224,375 | $2,046,634 | +8.7% | | Operating Income | $1,201,367 | $1,069,154 | +12.4% | | Net Income | $931,787 | $867,418 | +7.4% | | Diluted EPS | $0.95 | $0.83 | +14.5% | Condensed Consolidated Statements of Cash Flows Net cash from operations increased, while significant changes in investing and financing activities resulted in a net cash increase for H1 2025 Cash Flow Summary | Cash Flow Summary (In Thousands) | Six-Months Ended June 30, 2025 | Six-Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $973,616 | $848,433 | | Net cash (used in) provided by investing activities | $(357,729) | $903,304 | | Net cash used in financing activities | $(308,972) | $(2,440,475) | | Net Increase (Decrease) in Cash | $393,640 | $(732,941) | - Financing activities in H1 2025 included a $375.0 million repayment of credit facilities, contrasting with H1 2024 which saw $750.0 million in borrowings and over $3.2 billion in treasury stock purchases17 Notes to Condensed Consolidated Financial Statements The notes detail accounting policies, segment performance, the full repayment of a term loan, and a new share repurchase program - The company operates four reportable segments: Monster Energy® Drinks, Strategic Brands, Alcohol Brands, and Other2890 - The outstanding balance of $200.0 million on long-term debt was repaid in April 2025, and the company's $750.0 million Term Loan was fully repaid57 - The Board of Directors authorized a $500.0 million share repurchase program in August 2024, with the full amount remaining available as of August 6, 20256465 Net Sales by Segment (Q2 2025) | Net Sales by Segment (Q2 2025, In Thousands) | Amount | % of Total | | :--- | :--- | :--- | | Monster Energy® Drinks | $1,937,321 | 91.7% | | Strategic Brands | $129,893 | 6.2% | | Alcohol Brands | $37,971 | 1.8% | | Other | $6,408 | 0.3% | | Total Net Sales | $2,111,593 | 100.0% | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses strong Q2 2025 sales growth driven by volume and pricing, improved margins, and a robust liquidity position - Price increases implemented in late 2024 and into 2025 positively impacted gross profit margins127 - Net sales to customers outside the United States grew 15.8% to $864.2 million in Q2 2025, representing 41% of total net sales135114 - Key customers include Coca-Cola Europacific Partners (15% of Q2 net sales), Coca-Cola Consolidated, Inc. (11%), and Reyes Holdings, LLC (9%)141142143 Results of Operations Q2 2025 featured double-digit growth in net sales and operating income, with a 210 basis point expansion in gross margin Key Metrics Comparison (Q2) | Key Metrics Comparison | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Sales | $2,111.6M | $1,900.6M | | Gross Profit % | 55.7% | 53.6% | | Operating Income | $631.6M | $527.2M | | Net Income | $488.8M | $425.4M | - The increase in gross profit as a percentage of net sales for Q2 2025 was primarily due to pricing actions, supply chain optimization, and lower input costs157 - Operating expenses increased 10.7% in Q2 2025, mainly due to higher payroll expenses, including $14.4 million in stock-based compensation158160 Key Business Metrics Gross billings grew 12.7% in Q2 2025, driven by a 17.5% increase in energy drink case sales Gross Billings Reconciliation (Q2) | Gross Billings Reconciliation (Q2, In Thousands) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Gross Billings | $2,500,676 | $2,218,152 | +12.7% | | Less: Promotional allowances, etc. | (399,064) | (327,533) | +21.8% | | Net Sales | $2,111,593 | $1,900,597 | +11.1% | - Energy drink case sales (192-ounce equivalents) grew 17.5% YoY in Q2 2025, reaching 249.3 million cases154 - The average net sales per case for energy drinks decreased by 5.0% to $8.29 in Q2 2025, primarily due to geographical and product sales mix154212 Liquidity and Capital Resources The company maintains strong liquidity with $1.93 billion in cash, no long-term debt, and sufficient resources for future needs - As of June 30, 2025, the company had $1.93 billion in cash and cash equivalents215 - The Term Loan was fully repaid in April 2025, and as of June 30, 2025, no borrowings were outstanding under the Credit Facilities216 Contractual Commitments | Contractual Commitments (as of June 30, 2025, In Thousands) | Total | Less than 1 year | | :--- | :--- | :--- | | Contractual Obligations | $491,290 | $273,273 | | Leases (Finance & Operating) | $65,483 | $19,809 | | Purchase Commitments | $275,394 | $239,821 | | Total | $832,167 | $532,903 | Item 3. Quantitative and Qualitative Disclosures About Market Risk The company reported no material changes in its market risks during the quarter compared to its most recent Annual Report - There have been no material changes in market risks during the quarter ended June 30, 2025, compared with the disclosures in the most recent Form 10-K239 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures are adequate and effective240 - No changes occurred in the company's internal controls over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls241 Part II. OTHER INFORMATION Item 1. Legal Proceedings The company accrued $30.6 million for loss contingencies related to legal proceedings as of June 30, 2025 - Details on legal proceedings are provided in Note 10 of the financial statements24361 - As of June 30, 2025, accrued loss contingencies totaled $30.6 million, an increase from $16.8 million at year-end 202462 Item 1A. Risk Factors The company directs investors to the risk factors discussed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - The company refers to the risk factors detailed in its Annual Report on Form 10-K, indicating no material updates in this quarterly filing244 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No shares were repurchased during the quarter, with $500.0 million remaining available under the current repurchase plan - No shares were repurchased during the three months ended June 30, 2025245247 - As of August 6, 2025, $500.0 million remained available for repurchase under all authorized plans246 Item 5. Other Information No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the second quarter of 2025 - No directors or officers adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter250 Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and iXBRL financial data - Exhibits filed include certifications from the CEO and CFO pursuant to the Sarbanes-Oxley Act of 2002253