# How Monster Beverage makes money

CXProWealth Business Lens · Monster Beverage (MNST) · Q2 FY2026

Read from the 10-Q for the period 2026-04-01 to 2026-06-30, filed 2026-08-07 with the SEC (accession 0001104659-26-092193): https://www.sec.gov/Archives/edgar/data/865752/000110465926092193/

Business Lens explains how a company earns, spends and keeps its money, from its own filings. It is insight and context, never a view on the shares, a target, or advice. Figures are raw units as filed; percentages are percentage points.

## Headline figures

- Revenue: $2.5B (+36.8% on the year)
- Operating income: $740.4M (operating margin 29.2%)
- Net income: $584.5M (net margin 23.0%)
- Gross margin: 55.9%
- Free cash flow: $460.8M (18.2% of revenue)
- Cash conversion (operating cash flow / net income): 0.87x
- Capital expenditure: 1.9% of revenue

## Where the money goes (Q2 FY2026)

- Monster Energy Drinks → Net sales: $2.4B
- Strategic Brands → Net sales: $143.7M
- Alcohol Brands → Net sales: $32.2M
- Other → Net sales: $5.4M
- Net sales → Cost of sales: $1.1B
- Net sales → Gross profit: $1.4B
- Gross profit → Operating expenses: $679.2M
- Gross profit → Operating income: $740.4M
- Operating income → Income before provision for income taxes: $740.4M
- INTEREST and OTHER INCOME, net → Income before provision for income taxes: $27.8M
- Income before provision for income taxes → Provision for income taxes: $183.7M
- Income before provision for income taxes → Net income: $584.5M

## Where the revenue comes from

### Segments (REVENUE RECOGNITION - Disaggregation of Revenue (Details))

| Member | Value | Share |
|---|---:|---:|
| Monster Energy Drinks | $2.4B | 92.9% |
| Strategic Brands | $143.7M | 5.7% |
| Alcohol Brands | $32.2M | 1.3% |
| Other | $5.4M | 0.2% |

The members sum to total revenue.

### Regions (REVENUE RECOGNITION - Disaggregation of Revenue (Details))

| Member | Value | Share |
|---|---:|---:|
| U.S. and Canada | $1.5B | 57.2% |
| Emea | $632.8M | 24.9% |
| Latin America and Caribbean | $234.1M | 9.2% |
| Asia Pacific (including Oceania) | $219.0M | 8.6% |

The members sum to total revenue.

## Income statement, as filed

| Line | Q2 FY2026 | Of revenue |
|---|---:|---:|
| Net sales | $2.5B | 100% |
| Cost of sales | $1.1B | 44.1% |
| **Gross profit** | $1.4B | 55.9% |
| Operating expenses | $679.2M | 26.8% |
| **Operating income** | $740.4M | 29.2% |
| INTEREST and OTHER INCOME, net | $27.8M | 1.1% |
| **Income before provision for income taxes** | $768.3M | 30.3% |
| Provision for income taxes | $183.7M | 7.2% |
| **Net income** | $584.5M | 23.0% |
| Basic (in dollar per share) | $1 | 0.0% |
| Diluted (in dollar per share) | $1 | 0.0% |
| Basic (in shares) | 978,662,000 |  |
| Diluted (in shares) | 988,479,000 |  |

## History

| Period | Revenue | Operating income | Net income | Operating cash flow | Capital expenditure | Free cash flow |
|---|---:|---:|---:|---:|---:|---:|
| FY2008 | — | $163.6M | $108.0M | $199.5M | $6.7M | $192.8M |
| FY2009 | — | $337.3M | $208.7M | $156.2M | $23.6M | $132.6M |
| FY2010 | — | $347.8M | $212.0M | $229.0M | $12.5M | $216.5M |
| FY2011 | — | $456.4M | $286.2M | $333.8M | $25.6M | $308.3M |
| FY2012 | — | $550.6M | $340.0M | $287.7M | $42.9M | $244.7M |
| FY2013 | — | $572.9M | $338.7M | $342.0M | $40.8M | $301.3M |
| FY2014 | — | $747.5M | $483.2M | $597.5M | $28.0M | $569.5M |
| FY2015 | — | $893.7M | $546.7M | $522.7M | $35.6M | $487.1M |
| FY2016 | $3.0B | $1.1B | $712.7M | $701.4M | $99.8M | $601.5M |
| FY2017 | $3.4B | $1.2B | $820.7M | $987.7M | $83.4M | $904.3M |
| FY2018 | $3.8B | $1.3B | $993.0M | $1.2B | $61.9M | $1.1B |
| FY2019 | $4.2B | $1.4B | $1.1B | $1.1B | $101.7M | $1.0B |
| FY2020 | $4.6B | $1.6B | $1.4B | $1.4B | $48.7M | $1.3B |
| FY2021 | $5.5B | $1.8B | $1.4B | $1.2B | $43.9M | $1.1B |
| FY2022 | $6.3B | $1.6B | $1.2B | $887.7M | $188.7M | $699.0M |
| FY2023 | $7.1B | $2.0B | $1.6B | $1.7B | $221.4M | $1.5B |
| FY2024 | $7.5B | $1.9B | $1.5B | $1.9B | $264.1M | $1.7B |
| FY2025 | $8.3B | $2.4B | $1.9B | $2.1B | $132.3M | $2.0B |

Latest trend (the newest full year against the year before; a reading, not a forecast):

- Revenue: +10.7% (year before +4.9%): accelerating
- Operating income: +25.3% (year before -1.2%): accelerating
- Net income: +26.3% (year before -7.5%): accelerating
- Free cash flow: +18.1% (year before +11.2%): accelerating

## Operating figures stated in the filing

- Energy drink case sales (192-ounce case equivalents): 304,900,000 cases (as of 2026-06-30). "Case sales for our energy drink products, in 192-ounce case equivalents, were 304.9 million cases for the three-months ended June 30, 2026, an increase of approximately 55.6 million cases or 22.3% higher than case sales of 249.3 million cases for the three-months ended June 30, 2025." (Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS)
- Energy drink case sales (192-ounce case equivalents): 249,300,000 cases (as of 2025-06-30). "Case sales for our energy drink products, in 192-ounce case equivalents, were 304.9 million cases for the three-months ended June 30, 2026, an increase of approximately 55.6 million cases or 22.3% higher than case sales of 249.3 million cases for the three-months ended June 30, 2025." (Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS)
- Average net sales per case, energy drinks: $8 (as of 2026-06-30). "The overall average net sales per case for our energy drink products (excluding net sales of Alcohol Brands and Other segments) decreased marginally to $8.20 for the three-months ended June 30, 2026 from $8.29 for the three-months ended June 30, 2025." (Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS)
- Average net sales per case, energy drinks: $8 (as of 2025-06-30). "The overall average net sales per case for our energy drink products (excluding net sales of Alcohol Brands and Other segments) decreased marginally to $8.20 for the three-months ended June 30, 2026 from $8.29 for the three-months ended June 30, 2025." (Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS)
- Share of net sales to customers outside the United States: 46.0% (as of 2026-06-30). "Such sales were approximately 46% and 41% of net sales for the three-months ended June 30, 2026 and 2025, respectively." (Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS)
- Share of net sales to customers outside the United States: 41.0% (as of 2025-06-30). "Such sales were approximately 46% and 41% of net sales for the three-months ended June 30, 2026 and 2025, respectively." (Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS)
- Coca-Cola Europacific Partners share of net sales: 16.0% (as of 2026-06-30). "Coca-Cola Europacific Partners accounted for approximately 16% and 15% of the Company's net sales for the three-months ended June 30, 2026 and 2025, respectively." (Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS)
- Coca-Cola Europacific Partners share of net sales: 15.0% (as of 2025-06-30). "Coca-Cola Europacific Partners accounted for approximately 16% and 15% of the Company's net sales for the three-months ended June 30, 2026 and 2025, respectively." (Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS)
- Craft beer, FMB and hard seltzer case sales (192-ounce equivalents): 2,300,000 cases (as of 2026-06-30). "Case sales for our craft beers, FMBs and hard seltzers, in 192-ounce equivalents, were 2.3 million cases for the three-months ended June 30, 2026, a decrease of approximately 0.5 million cases or 16.1% lower than case sales of 2.8 million cases for the three-months ended June 30, 2025." (Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS)
- Craft beer, FMB and hard seltzer case sales (192-ounce equivalents): 2,800,000 cases (as of 2025-06-30). "Case sales for our craft beers, FMBs and hard seltzers, in 192-ounce equivalents, were 2.3 million cases for the three-months ended June 30, 2026, a decrease of approximately 0.5 million cases or 16.1% lower than case sales of 2.8 million cases for the three-months ended June 30, 2025." (Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS)
- Craft beer, FMB and hard seltzer barrel sales (31 U.S. gallon equivalents): 110,000 barrels (as of 2026-06-30). "Barrel sales for our craft beers, FMBs and hard seltzers, in 31 U.S. gallon equivalents, were 0.11 million barrels for the three-months ended June 30, 2026, a decrease of approximately 0.03 million barrels or 16.1% lower than barrel sales of 0.14 million barrels for the three-months ended June 30, 2025." (Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS)
- Craft beer, FMB and hard seltzer barrel sales (31 U.S. gallon equivalents): 140,000 barrels (as of 2025-06-30). "Barrel sales for our craft beers, FMBs and hard seltzers, in 31 U.S. gallon equivalents, were 0.11 million barrels for the three-months ended June 30, 2026, a decrease of approximately 0.03 million barrels or 16.1% lower than barrel sales of 0.14 million barrels for the three-months ended June 30, 2025." (Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS)

## Key insights

### More cans, not higher prices, carried the quarter

Energy drink cases rose to 304.9 million from 249.3 million while sales per case slipped to $8.20, so volume drove the 20.2% sales rise.

Energy drink case sales were 304.9 million this quarter against 249.3 million a year earlier, while average net sales per case for energy drinks fell to $8.20 from $8.29. Net sales grew 20.2% to $2.54B and the Monster Energy Drinks segment 21.6% to $2.36B. The filing attributes the rise to "increased worldwide sales of our Monster Energy® brand energy drinks as a result of increased consumer demand", with favorable currency moves adding to it. _(from the filing)_
Price per case fell even though the company raised prices. The filing credits "the Pricing Actions and product sales mix" for a gross margin that rose to 55.9% from 55.7%. At the same time lower-priced lines grew: Strategic Brands, home of the affordable Predator and Fury brands, grew 10.7% to $143.7M, and the filing says Monster Energy Drinks earn more per case than Strategic Brands. _(from the filing)_
Analysis: the average price per case reflects where the cases were sold as much as what each can costs. Growth abroad and in affordable brands lowers the average even while U.S. prices rise. Case volume is therefore the number that explains this quarter's growth, and a widening gap between case growth and sales growth would show mix diluting faster than pricing adds back. _(analysis)_

### Nearly half of sales now come from outside the U.S.

Sales to customers outside the United States were about 46% of net sales, up from 41% a year earlier, so home and abroad now weigh almost evenly.

Sales to customers outside the United States were about 46% of net sales this quarter, against 41% a year earlier. By region, U.S. and Canada brought in $1.45B, 57.2% of net sales; EMEA $632.8M, 24.9%; Latin America and Caribbean $234.1M, 9.2%; and Asia Pacific $219.0M, 8.6%. _(from the filing)_
The route abroad runs largely through Coca-Cola system bottlers. Coca-Cola Europacific Partners, the largest customer the filing names, accounted for about 16% of net sales, up from 15% a year earlier. The filing also says currency moves had a favorable effect on sales outside the United States this quarter, so part of the shift reflects exchange rates rather than cases alone. _(from the filing)_
Analysis: a company that makes nearly half its sales abroad carries a different set of exposures than one led by its home market: currency, local price tiers and the priorities of a few large bottlers. The same shift that adds cases also pulls the average price per case down, which ties this finding to the volume story. _(analysis)_

### Spending for reach grew faster than gross profit

Operating expenses absorbed 47.8% of gross profit against 46.3% a year earlier, so operating income grew 17.2%, slower than sales at 20.2%.

Operating expenses rose 24.7% to $679.2M while gross profit rose 20.7% to $1.42B. Operating expenses were 26.8% of net sales against 25.8% a year earlier. Operating income still grew 17.2% to $740.4M, but the operating margin fell 0.73 points to 29.2%. _(from the filing)_
The filing names selling and marketing, distribution and payroll as the main increases. It says the higher marketing spend, including sponsorships and endorsements, was "in order to reach a broader consumer audience and increase household penetration." Out-bound freight and warehouse costs sit in operating expenses, so distribution costs that rise with volume land here rather than in cost of sales. _(from the filing)_
Analysis: this reads as a choice to give up some margin for reach while volume is growing. Whether it pays shows in later quarters. If cases keep growing without spending rising as fast, the share of gross profit taken by operating expenses would ease back; if that share keeps climbing, the operating margin carries the cost. _(analysis)_

### Interest and a lower tax rate lifted net income

Net income rose 19.6% against 17.2% for operating income, as interest and other income nearly doubled and the effective tax rate eased to 23.9%.

Interest and other income, net, was $27.8M against $15.1M a year earlier, 3.6% of pre-tax income against 2.3%. The provision for income taxes was 23.9% of pre-tax income against 24.4%. Net income grew 19.6% to $584.5M, and diluted earnings per share were $0.59 against $0.50. _(from the filing)_
Analysis: these lines added to growth this quarter but sit outside the operating business. Interest income depends on cash balances and rates, and the tax rate moves with mix and one-off items, so operating income growth of 17.2% is the cleaner read of how the business itself grew. _(analysis)_

### Competitive edge

- **A brand owner that needs little capital** Capital spending was 1.9% of net sales and 9.5% of operating cash flow, with bottlers and distributors doing most of the physical work.
- **Gross margin has climbed back for three years** Gross margin rose in each of the last three fiscal years, reaching 55.8%, and the filing credits this quarter's 55.9% to pricing and mix.

### What to watch

- **One bottler accounts for about a sixth of sales** Coca-Cola Europacific Partners was about 16% of net sales, up from 15%, and the filing describes a substantial dependence on its relationship with Coca-Cola.
- **Can and freight costs press on the margin** The filing names aluminum can and freight-in costs as drags on gross margin this quarter; pricing offset them, leaving the margin reliant on price increases that stick.
- **Proposed rules could narrow where energy drinks sell** The filing names U.S. policy attention to sugar-sweetened beverages, food dyes and the GRAS process, plus possible limits on sales by age, venue and container size.

## Investor view

**Volume carried the quarter: 304.9 million energy drink cases, sold at a slightly lower price per case**

### How it makes money

Monster sells energy drinks, mostly as finished cans, to bottlers and distributors who take them to stores. The Monster Energy Drinks segment brought in $2.36B of the quarter's $2.54B in net sales, 92.9% of the total. The company describes its non-alcohol customers as "primarily full service beverage bottlers/distributors", and the list it names is largely Coca-Cola system bottlers, alongside Walmart, Costco and Amazon. _(from the filing)_
Strategic Brands works differently. It earns mainly by "selling “concentrates” and/or “beverage bases” to authorized bottling and canning operations", which add sweeteners and water and can the drink themselves. These brands, largely acquired from The Coca-Cola Company plus the affordable Predator and Fury lines, brought in $143.7M, 5.7% of net sales. The filing says Monster Energy Drinks earn more per case but a lower gross margin percentage than Strategic Brands. _(from the filing)_
Of each dollar of net sales this quarter, about 44% went to cost of sales and 26.8% to operating expenses, leaving an operating margin of 29.2%. The filing notes that out-bound freight and warehouse costs sit in operating expenses rather than cost of sales, so its 55.9% gross margin is not directly comparable with companies that book distribution inside cost of sales. _(from the filing)_
The business needs little capital. Capital spending was 1.9% of net sales this quarter, and free cash flow was $460.8M, an 18.2% margin. Last fiscal year, on $8.29B of net sales, capital spending was $132.3M and free cash flow was $1.97B, slightly more than that year's $1.91B of net income. _(from the filing)_

### What shifted

Volume drove the growth. Energy drink case sales rose to 304.9 million from 249.3 million a year earlier, while average net sales per case slipped to $8.20 from $8.29. Net sales grew 20.2% and Monster Energy Drinks 21.6%. The filing attributes the rise to "increased worldwide sales of our Monster Energy® brand energy drinks as a result of increased consumer demand", with favorable currency moves adding to it. _(from the filing)_
The sales base moved abroad. Sales to customers outside the United States were about 46% of net sales, up from 41% a year earlier. EMEA alone was $632.8M, 24.9% of the quarter's net sales. Coca-Cola Europacific Partners, the largest customer the filing names, accounted for about 16% of net sales against 15% a year earlier. _(from the filing)_
Gross margin rose 0.23 points to 55.9%. The filing credits "the Pricing Actions and product sales mix", meaning the price increases taken in the United States late last year and in some international markets, "partially offset by increased aluminum can costs, geographical sales mix and increased freight-in costs." _(from the filing)_
Spending grew faster than sales. Operating expenses rose 24.7% to $679.2M against 20.2% growth in net sales, adding 0.97 points to their share of sales. The filing names selling and marketing, distribution and payroll as the main increases, with marketing spent "in order to reach a broader consumer audience and increase household penetration." Operating income still grew 17.2% to $740.4M, but the operating margin fell 0.73 points to 29.2%. _(from the filing)_
Below the operating line, interest and other income nearly doubled to $27.8M from $15.1M, and the effective tax rate fell to 23.9% from 24.4%. Net income therefore grew 19.6% to $584.5M, faster than operating income. Diluted earnings per share were $0.59 against $0.50 a year earlier. _(from the filing)_

### Risks in the filing

Costs and supply. The company names its ability to absorb, reduce or pass on to bottlers higher costs for aluminum and other raw materials, the Midwest Premium and freight, along with changes in U.S. trade policy including tariffs, and supply chain disruption from military and geopolitical conflicts. _(from the filing)_
Regulation and health. It names U.S. administration policy concerns about sugar-sweetened beverages, food dyes and the "generally recognized as safe" (GRAS) process; laws that could restrict energy drink sales by age, venue, container size or under programs such as SNAP; new or higher excise taxes; and adverse publicity about health concerns. _(from the filing)_
Partners and customers. It describes "substantial dependence on the success of our relationship with TCCC" and warns that unilateral decisions by bottlers or retailers, such as dropping products, limiting sizes or giving the brand less effort, could hurt results. A decision by any large customer to buy less or stop carrying its products "could have a material adverse effect". _(from the filing)_
Execution. It names its ability to sustain sales and respond to competitive products and pricing pressure, to reach profitability in the Alcohol Brands segment, and to adapt to the growth of e-commerce, along with product recalls, cybersecurity breaches and legal or regulatory proceedings. _(from the filing)_
Three of these already show in the quarter. Aluminum and freight costs were cited against gross margin, Alcohol Brands sales fell again while the segment stayed loss-making, and the largest customer's share of sales rose. The regulatory items have not yet appeared in the reported figures, which is where a change would first be visible. _(analysis)_

## Founder view: mechanisms

### Bottlers carry the brand

Monster owns the brand, the formulas and the marketing, and leans on partners for most of the rest. Coca-Cola system bottlers move most of the volume, co-packers and some bottlers fill cans, and Strategic Brands ships only concentrate. The company keeps the work where its own judgment matters: product, brand and pricing. The result is a consumer goods company with the capital needs of a much lighter business. _(analysis)_

### Marketing builds the demand bottlers move

Bottlers distribute; they do not create demand. Monster spends on sponsorships, athletes, events and social and digital media to make the brand something people ask for by name, and that pull is what earns shelf space and the bottlers' attention. The spending sits in operating expenses, so a high gross margin is what pays for it. _(analysis)_

### Volume across markets and price tiers

Monster grows by adding markets and price points rather than by pushing the price of its core can. The premium Monster line leads, affordable brands such as Predator and Fury serve price-sensitive markets, and concentrates let bottlers produce locally where shipping finished cans would cost too much. Each tier earns less per case but adds cases through the same network. _(analysis)_

### A channel advantage does not travel

Monster's edge is a strong brand matched to a distribution system built for soft drinks. Its craft beers, flavored malt beverages and hard seltzers sell through beer distributors under separate alcohol rules, where that edge does not apply, and they compete as one more brand among many. _(analysis)_

## Member research

Signed-in members read, on the page: what Monster Beverage's numbers depend on from here, and the playbook behind each mechanism (what needs scale, what transfers, how to test it, the metric that would show it).

## Sources

- Monster Beverage 10-Q for the period to 2026-06-30: https://www.sec.gov/Archives/edgar/data/865752/000110465926092193/ (2026-08-07)

Methodology business-lens-1.0 · schema 1.2.0 · run business-lens-2026-11-02 · as of 2026-11-02