Monster Beverage (MNST) Economic Moat Analysis56

Evidence

Monster Energy® Distribution Agreements We have entered into agreements with various bottlers/distributors providing for the distribution of certain of our energy drinks during initial terms of up to twenty years, which may be extended thereafter, subject to certain terms and conditions, which may vary depending on the form of the agreement.

Business / Monster Energy Distribution Agreements / initial terms · Filed 27/02/2026

Certain of our material distribution arrangements for our Monster Energy® brand energy drinks, as amended from time to time, are described below: (a) Amended and Restated Distribution Coordination Agreement with TCCC, pursuant to which we have designated, and in the future may designate, subject to TCCC’s approval, territories in Canada and the United States in which bottlers from TCCC’s network of wholly or partially-owned and independent bottlers (the “TCCC North American Bottlers”) will distribute and sell, or continue to distribute and sell, our Monster Energy® brand energy drinks.

Business / North American TCCC distribution coordination agreement · Filed 27/02/2026

(b) Amended and Restated International Distribution Coordination Agreement with TCCC, pursuant to which we have designated, and in the future may designate, countries, or territories within countries, in which we wish to appoint TCCC network bottlers to distribute and sell our Monster Energy® brand energy drinks, subject to TCCC’s approval.

Business / international TCCC distribution coordination agreement · Filed 27/02/2026

Case sales for our energy drink products, in 192-ounce case equivalents, were 579.4 million cases for the six-months ended June 30, 2026, an increase of approximately 117.0 million cases or 25.3% higher than case sales of 462.4 million cases for the six-months ended June 30, 2025.

MD&A / first-half 2026 energy case sales · Filed 07/08/2026

Net sales for the Monster Energy® Drinks segment on a foreign currency adjusted basis increased 19.3% for the three-months ended June 30, 2026.

MD&A / second-quarter 2026 currency-adjusted Monster Energy Drinks sales · Filed 07/08/2026

Net sales to customers outside the United States amounted to $2.96 billion, $2.71 billion and $2.36 billion for the years ended December 31, 2024, 2023 and 2022, respectively.

Notes / sales outside the United States / 2022–2024 · Filed 28/02/2025

The Company also enters into license agreements that generate revenues associated with third-party sales of non-beverage products bearing the Company’s trademarks including, but not limited to, clothing, hats, t-shirts, jackets, helmets and automotive wheels.

Revenue recognition / trademark licensing · Filed 07/08/2026

Pricing Actions We implemented price increases in the fourth quarter of 2025 (for core brands and packages) in the United States and at various times in certain international markets during 2025 (collectively, the “Pricing Actions”).

MD&A / implemented 2025 Pricing Actions · Filed 07/08/2026

The Pricing Actions positively impacted gross profit margins in 2026 as compared to 2025.

MD&A / management attribution of 2026 margin benefit to Pricing Actions · Filed 07/08/2026

Such agreements remain in effect for their then-current term as long as our products are being distributed, but are subject to specified termination rights held by each party, which may include by way of example, and depending on the form of agreement, termination upon: mutual agreement; material breach of the agreement by, or an insolvency of, either party; deadlock; change of control; changes in legal or regulatory conditions and termination of certain related agreements.

Business / distribution agreement termination rights · Filed 27/02/2026

We depend on our bottlers/distributors to prioritize our products, provide efficient, stable and reliable distribution and secure adequate shelf space in retail outlets.

Competition / distributor prioritization and shelf access · Filed 27/02/2026

We compete not only for consumer preference, but also for maximum marketing, sales efforts and attention from our multi-brand licensed bottlers and distributors, many of which have a principal affiliation with competing companies and brands.

Competition / competing affiliations of multi-brand distributors · Filed 27/02/2026

For example, PepsiCo entered into a long-term strategic distribution arrangement with Celsius Holdings, Inc., a competitor in the energy drink space, in August 2022.

Competition / PepsiCo and Celsius Holdings, Inc. distribution arrangement · Filed 27/02/2026

For example, KDP, which distributes C4 and Bloom, entered into a long-term sales and distribution agreement with Black Rifle Coffee Company as well as a definitive agreement to acquire GHOST Lifestyle LLC and GHOST Beverages LLC.

Competition / KDP distribution and acquisition agreements · Filed 27/02/2026

(“KDP”) and Red Bull GmbH. From time to time, competitors have entered into distribution or acquisition agreements with certain other competitors.

Competition / Red Bull GmbH and rival agreements · Filed 27/02/2026

The overall average net sales per case for our energy drink products (excluding net sales of Alcohol Brands and Other segments) decreased marginally to $8.31 for the six-months ended June 30, 2026 from $8.39 for the six-months ended June 30, 2025.

MD&A / first-half 2026 average energy net sales per case · Filed 07/08/2026

Gross profit as a percentage of net sales decreased to 55.5% for the six-months ended June 30, 2026 from 56.1% for the six-months ended June 30, 2025.

MD&A / first-half 2026 gross margin comparison · Filed 07/08/2026

The decrease in gross profit as a percentage of net sales for the six-months ended June 30, 2026 was primarily the result of geographical sales mix, increased aluminum can costs and increased freight-in costs, partially offset by the Pricing Actions and product sales mix.

MD&A / gross margin drivers and pricing offsets · Filed 07/08/2026

Net sales for the Alcohol Brands segment were $64.9 million for the six-months ended June 30, 2026, a decrease of approximately $7.8 million, or 10.8% lower than net sales of $72.7 million for the six-months ended June 30, 2025.

MD&A / first-half 2026 Alcohol Brands sales decline · Filed 07/08/2026

​ Year Ended December 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Monster ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Energy® ​ Strategic ​ Alcohol ​ ​ ​ ​ ​ ​ ​ ​ ​ Drinks ​ ​ ​ Brands ​ ​ ​ Brands ​ ​ ​ Other ​ ​ ​ Total Net sales1 ​ $ 7,665,871 ​ $ 468,716 ​ $ 134,720 ​ $ 25,036 ​ $ 8,294,343 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales ​ 3,394,604 ​ 146,913 ​ 102,303 ​ 18,328 ​ — Gross profit ​ 4,271,267 ​ 321,803 ​ 32,417 ​ 6,708 ​ 4,632,195 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Distribution expense ​ 314,933 ​ 6,257 ​ 9,897 ​ — ​ — Selling and marketing expense ​ 714,958 ​ 61,633 ​ 26,447 ​ 421 ​ — Nonmanufacturing payroll expense ​ 177,027 ​ 9,556 ​ 35,212 ​ 2,147 ​ — Intangibles impairment ​ — ​ — ​ 38,411 ​ — ​ — Other segment items2 ​ 87,845 ​ 3,600 ​ 49,410 ​ 698 ​ — Segment profit (loss)1 ​ ​ 2,976,504 ​ ​ 240,757 ​ ​ (126,960) ​ ​ 3,442 ​ ​ 3,093,743 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reconciliation of segment profit (loss) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest and other income, net ​ ​ ​ ​ ​ ​ ​ ​ ​ 63,175 Unallocated amounts: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate payroll expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (445,742) Corporate overhead expenses, excluding payroll ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (228,647) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before provision for income taxes ​ ​ ​ ​ ​ ​ ​ ​ $ 2,482,529 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ $ 78,504 ​ $ 1,104 ​ $ 19,467 ​ $ 1,218 ​ $ 100,293 Unallocated depreciation and amortization ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 14,148 Total depreciation and amortization ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 114,441 ​ 1For the Monster Energy® Drinks segment, includes $40.0 million related to the recognition of deferred revenue.

Note on segments / 2025 Alcohol Brands loss and intangible impairment · Filed 27/02/2026

Promotional and other allowances for our energy drink products primarily include consideration given to our non-alcohol bottlers/distributors or customers including, but not limited to the following: (i) discounts granted off list prices to support price promotions to end-consumers by retailers; (ii) reimbursements given to our bottlers/distributors for agreed portions of their promotional spend with retailers, including slotting, shelf space allowances and other fees for both new and existing products; (iii) our agreed share of fees given to bottlers/distributors and/or directly to retailers for advertising, in-store marketing and promotional activities; (iv) our agreed share of slotting, shelf space allowances and other fees given directly to retailers, club stores and/or wholesalers; (v) incentives given to our bottlers/distributors and/or retailers for achieving or exceeding certain predetermined sales goals; (vi) discounted and/or free products or cash rebates; (vii) contractual fees given to our bottlers/distributors related to sales made by us direct to certain customers that fall within the bottlers’/distributors’ sales territories; and (viii) certain commissions paid based on sales to our bottlers/distributors.

MD&A / discounts, shelf fees, incentives and distribution commissions · Filed 07/08/2026

Promotional and other allowances for our energy drink products constitute a material portion of our marketing activities.

MD&A / materiality of energy promotional allowances · Filed 07/08/2026

Operating Income Operating income was $1.47 billion for the six-months ended June 30, 2026, an increase of approximately $269.0 million, or 22.4% higher than operating income of $1.20 billion for the six-months ended June 30, 2025.

MD&A / first-half 2026 operating income growth · Filed 07/08/2026

Operating income as a percentage of net sales decreased to 30.1% for the six-months ended June 30, 2026 from 30.3% for the six-months ended June 30, 2025.

MD&A / first-half 2026 operating margin comparison · Filed 07/08/2026

The following summarizes our cash flows for the years ended December 31, 2025, 2024 and 2023 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in): ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Operating activities ​ $ 2,098,177 ​ $ 1,928,533 ​ $ 1,717,753 Investing activities ​ $ (1,316,778) ​ $ 733,727 ​ $ (193,395) Financing activities ​ $ (324,422) ​ $ (3,329,029) ​ $ (542,599) ​ Cash flows provided by operating activities.

Liquidity and Capital Resources / 2023–2025 cash flows · Filed 27/02/2026

The following summarizes our cash flows for the six-months ended June 30, 2026 and 2025 (in thousands): Net cash provided by (used in): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 Operating activities ​ $ 1,114,201 ​ $ 973,616 Investing activities ​ $ (929,315) ​ $ (357,729) Financing activities ​ $ (58,697) ​ $ (308,972) ​ Cash flows provided by operating activities.

Liquidity and Capital Resources / first-half cash flows · Filed 07/08/2026

On June 10, 2024, the Company accepted for purchase a total of approximately 56.6 million shares of common stock at a purchase price of $53.00 per share, for an aggregate purchase price of approximately $3.0 billion.

Business / completed 2024 tender repurchase · Filed 28/02/2025

The repurchase was funded with approximately $2.25 billion of cash on hand and approximately $750 million in borrowings.

Business / cash and borrowing used for 2024 tender · Filed 28/02/2025

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2026 AND DECEMBER 31, 2025 (In Thousands, Except Par Value) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ASSETS ​ ​ ​ ​ ​ ​ CURRENT ASSETS: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 2,192,424 ​ $ 2,088,117 Short-term investments ​ ​ 1,226,832 ​ ​ 677,084 Accounts receivable, net ​ 1,902,421 1,618,072 Inventories ​ 867,674 799,623 Prepaid expenses and other current assets ​ 148,691 103,551 Prepaid income taxes ​ 67,034 74,637 Total current assets ​ 6,405,076 5,361,084 ​ ​ ​ ​ ​ ​ ​ INVESTMENTS ​ ​ 781,314 ​ ​ 487,329 PROPERTY AND EQUIPMENT, net ​ 1,095,810 1,081,544 DEFERRED INCOME TAXES, net ​ 189,427 188,646 GOODWILL ​ 1,331,643 1,331,643 OTHER INTANGIBLE ASSETS, net ​ 1,381,827 1,379,268 OTHER ASSETS ​ 197,194 159,431 Total Assets ​ $ 11,382,291 $ 9,988,945 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ CURRENT LIABILITIES: ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 753,751 $ 565,974 Accrued liabilities ​ 335,527 306,085 Accrued promotional allowances ​ 434,012 384,070 Deferred revenue ​ 47,695 45,323 Accrued compensation ​ 88,194 114,023 Income taxes payable ​ 58,315 32,305 Total current liabilities ​ 1,717,494 1,447,780 ​ ​ ​ ​ ​ ​ ​ DEFERRED REVENUE ​ 151,344 159,991 OTHER LIABILITIES ​ ​ 149,305 ​ ​ 127,066 ​ ​ ​ ​ ​ ​ ​ COMMITMENTS AND CONTINGENCIES (Note 10) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ STOCKHOLDERS’ EQUITY: ​ ​ ​ ​ ​ ​ Common stock - $0.005 par value; 5,000,000 shares authorized; 1,136,078 shares issued and 979,490 shares outstanding as of June 30, 2026; 1,132,906 shares issued and 978,113 shares outstanding as of December 31, 2025 ​ ​ 5,680 ​ ​ 5,665 Additional paid-in capital ​ 5,572,830 5,430,847 Retained earnings ​ 10,508,241 9,354,216 Accumulated other comprehensive loss ​ (112,846) (60,841) Common stock in treasury, at cost; 156,588 shares and 154,793 shares as of June 30, 2026 and December 31, 2025, respectively ​ (6,609,757) (6,475,779) Total stockholders’ equity ​ 9,364,148 8,254,108 Total Liabilities and Stockholders’ Equity ​ $ 11,382,291 $ 9,988,945 ​ See accompanying notes to condensed consolidated financial statements.

Condensed consolidated balance sheets / liquidity and outstanding shares · Filed 07/08/2026

The Company had contractual obligations aggregating approximately $746.6 million at June 30, 2026, which related primarily to sponsorships and other marketing activities.

Commitments and contingencies / sponsorship and marketing obligations · Filed 07/08/2026

PSUs In 2025 we continued our past practice of granting PSUs that cliff vest over a single three-year performance period, subject to pre-established performance goals and continued service during the period.

Compensation Discussion and Analysis / granted 2025 three-year PSUs · Filed 27/03/2026

Specifically, the 2025 grants of PSUs are eligible to be earned based on three-year cumulative adjusted diluted EPS from fiscal year 2025 through fiscal year 2027.

Compensation Discussion and Analysis / 2025–2027 cumulative adjusted EPS goals · Filed 27/03/2026

Performance Level Threshold Target Maximum Actual 2025 Adjusted Operating Income ($) $2.162 Billion $2.276 Billion $2.390 Billion $2.522 Billion Percentage Payout (% of Target) 50% 100% 200% 200% The actual achievement of the adjusted operating income and the individual performance components under the AIAs were certified and approved by the Compensation Committee and paid in the first quarter of 2026 following a review of financial results prepared by the Company’s management and evaluation of each NEO’s individual performance based on a variety of factors.

Compensation Discussion and Analysis / certified 2025 incentive achievement and payment · Filed 27/03/2026

Anti-Hedging Policy The Insider Trading Policy prohibits the Company’s directors, officers and employees from engaging in transactions that use any financial instrument that is designed to hedge or offset any decrease in the market value of Company securities, including prepaid variable forward contracts, collars and exchange funds.

Governance / adopted anti-hedging policy · Filed 27/03/2026

Beginning with the Company’s 2021 LTI grants and continuing through the 2025 LTI grants, the award agreements for each of the PSUs, time-vested RSUs and stock options provide for “double-trigger” vesting provisions for all NEOs, which accelerates vesting upon a qualifying termination of employment following the occurrence of a change in control where such awards are assumed, replaced or continued.

Compensation Discussion and Analysis / 2021–2025 double-trigger award terms · Filed 27/03/2026

Annual Incentive Program Reconciliation of Operating Income to Adjusted Operating Income (In Thousands) For the Year Ended December 31, 2025 Operating Income $ 2,419,354 Adjustments to Operating Income: Depreciation and amortization1 30,560 Impairment charges2 50,439 Significant settlements3 19,849 Foreign exchange rate deviations from budget4 2,013 Total adjustments to Operating Income 102,861 Adjusted Operating Income $ 2,522,215 1 Represents depreciation and amortization related to general administrative activities.

Appendix A / incentive operating income adjustments · Filed 27/03/2026

Our independent directors met in executive session four times during the fiscal year ended December 31, 2025.

Governance / independent director executive sessions in 2025 · Filed 27/03/2026

All members of the Board who serve on the Compensation Committee meet the independence requirements of the Nasdaq Stock Market Rules.

Governance / Compensation Committee independence · Filed 27/03/2026

Equity awards granted by the Executive Committee are not subject to approval or ratification by the Board or the Compensation Committee, as set forth in the written Equity Grant Procedures adopted by the Board.

Governance / Executive Committee equity grant authority · Filed 27/03/2026

In connection with this oversight, the Audit Committee received periodic updates provided by the principal internal auditor, management and Ernst & Young LLP, the Company’s independent registered public accounting firm at least quarterly at an Audit Committee meeting.

Audit Committee / quarterly internal control evaluation updates · Filed 27/03/2026

RELATED PARTY TRANSACTIONS TCCC controls approximately 20.9% of the voting interests of the Company.

Related party transactions / TCCC voting interest · Filed 07/08/2026

We adjusted the caffeine levels in certain of our Monster Energy® products that are sold in Canada as caffeinated energy drinks to address these regulations, although the majority of our products were unaffected.

Government regulation / completed Canadian caffeine reformulations · Filed 27/02/2026

The beverage industry is subject to changing consumer preferences and shifts in consumer preferences may adversely affect us.

Risk factors / changing consumer preferences · Filed 27/02/2026

Net sales increased primarily due to increased worldwide sales of our Monster Energy® brand energy drinks as a result of increased consumer demand.

MD&A / management attribution of sales growth to consumer demand · Filed 07/08/2026

The Company recorded $64.0 million and $53.9 million of compensation expense relating to outstanding options, restricted stock units, performance share units and other share-based awards during the six-months ended June 30, 2026 and 2025, respectively.

Stock-based compensation / first-half 2026 expense · Filed 07/08/2026

Publication history

Sources

• filing-1 · Filed 27/02/2026
• filing-2 · Filed 07/08/2026
• filing-3 · Filed 27/03/2026
• filing-4 · Filed 28/02/2025
• filing-5 · Filed 29/02/2024
• filing-6 · Filed 08/05/2026