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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

Quarterly Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2023

Commission File Number 001-18761

MONSTER BEVERAGE CORPORATION

(Exact name of registrant as specified in its charter)



Delaware		47-1809393
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

1 Monster Way

Corona, California 92879

(Address of principal executive offices) (Zip code)

(951) 739 - 6200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	MNST	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X No __

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes X No __

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☒		Accelerated filer ☐
Non-accelerated filer ☐		Smaller reporting company ☐
		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes __ No X

The registrant had 1,040,441,348 shares of common stock, par value $0.005 per share, outstanding as of October 31, 2023.

Table of Contents

MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES

SEPTEMBER 30, 2023

INDEX


Part I.	FINANCIAL INFORMATION	Page No.

Item 1.	Condensed Consolidated Financial Statements (Unaudited)

	Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022	3

	Condensed Consolidated Statements of Income for the Three- and Nine-months ended September 30, 2023 and 2022	4

	Condensed Consolidated Statements of Comprehensive Income for the Three- and Nine-months ended September 30, 2023 and 2022	5

	Condensed Consolidated Statements of Stockholders’ Equity for the Three- and Nine-months ended September 30, 2023 and 2022	6

	Condensed Consolidated Statements of Cash Flows for the Nine-Months Ended September 30, 2023 and 2022	8

	Notes to Condensed Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	54

Item 4.	Controls and Procedures	55

Part II.	OTHER INFORMATION

Item 1.	Legal Proceedings	56

Item 1A.	Risk Factors	56

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	56

Item 3.	Defaults Upon Senior Securities	57

Item 4.	Mine Safety Disclosures	57

Item 5.	Other Information	57

Item 6.	Exhibits	58

	Signatures	59

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2023 AND DECEMBER 31, 2022

(In Thousands, Except Par Value) (Unaudited)


	September 30,		December 31,
	2023		2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	1,773,849	$	1,307,141
Short-term investments		1,236,752		1,362,314
Accounts receivable, net		1,231,188		1,016,203
Inventories		883,582		935,631
Prepaid expenses and other current assets		162,676		109,823
Prepaid income taxes		23,468		33,785
Total current assets		5,311,515		4,764,897

INVESTMENTS		52,636		61,443
PROPERTY AND EQUIPMENT, net		731,208		516,897
DEFERRED INCOME TAXES, net		176,724		177,039
GOODWILL		1,417,941		1,417,941
OTHER INTANGIBLE ASSETS, net		1,459,447		1,220,410
OTHER ASSETS		164,867		134,478
Total Assets	$	9,314,338	$	8,293,105

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	539,892	$	444,265
Accrued liabilities		207,727		172,991
Accrued promotional allowances		296,577		255,631
Deferred revenue		40,127		43,311
Accrued compensation		76,835		72,463
Income taxes payable		17,644		13,317
Total current liabilities		1,178,802		1,001,978

DEFERRED REVENUE		209,136		223,800

OTHER LIABILITIES		53,251		42,286

COMMITMENTS AND CONTINGENCIES (Note 12)

STOCKHOLDERS’ EQUITY¹:
Common stock - $0.005 par value; 5,000,000 shares authorized; 1,118,498 shares issued and 1,040,420 shares outstanding as of September 30, 2023; 1,283,688 shares issued and 1,044,600 shares outstanding as of December 31, 2022		5,592		6,418
Additional paid-in capital		4,893,289		4,776,804
Retained earnings		5,572,757		9,001,173
Accumulated other comprehensive loss		(198,033)		(159,073)
Common stock in treasury, at cost; 78,078 shares and 239,088 shares as of September 30, 2023 and December 31, 2022, respectively		(2,400,456)		(6,600,281)
Total stockholders’ equity		7,873,149		7,025,041
Total Liabilities and Stockholders’ Equity	$	9,314,338	$	8,293,105

¹ Stock Split - On February 28, 2023, the Company announced a two-for-one stock split of its common stock to be effected in the form of a 100% stock dividend. The stock dividend was issued on March 27, 2023 (the “Stock Split”). The accompanying condensed consolidated financial statements and notes thereto have been retroactively updated to reflect the Stock Split. See Note 1 for additional information.

See accompanying notes to condensed consolidated financial statements.

Table of Contents

MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

FOR THE THREE- AND NINE-MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(In Thousands, Except Per Share Amounts) (Unaudited)


	Three-Months Ended				Nine-Months Ended
	September 30,				September 30,
	2023		2022		2023		2022

NET SALES	$	1,856,028	$	1,624,286	$	5,409,919	$	4,798,119

COST OF SALES		872,265		790,561		2,554,086		2,407,867

GROSS PROFIT		983,763		833,725		2,855,833		2,390,252

OPERATING EXPENSES		473,236		415,795		1,336,437		1,199,883

OPERATING INCOME		510,527		417,930		1,519,396		1,190,369

INTEREST and OTHER INCOME (EXPENSE), net		71,357		2,149		99,010		(11,932)

INCOME BEFORE PROVISION FOR INCOME TAXES		581,884		420,079		1,618,406		1,178,437

PROVISION FOR INCOME TAXES		129,190		97,692		354,397		288,487

NET INCOME	$	452,694	$	322,387	$	1,264,009	$	889,950

NET INCOME PER COMMON SHARE¹:
Basic	$	0.43	$	0.31	$	1.21	$	0.84
Diluted	$	0.43	$	0.30	$	1.19	$	0.83

WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK AND COMMON STOCK EQUIVALENTS¹:
Basic		1,047,015		1,053,594		1,046,337		1,056,526
Diluted		1,059,966		1,066,600		1,059,809		1,069,198

¹ Stock Split - The accompanying condensed consolidated financial statements and notes thereto have been retroactively updated to reflect the Stock Split. See Note 1 for additional information.

See accompanying notes to condensed consolidated financial statements.

Table of Contents

MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE- AND NINE-MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(In Thousands) (Unaudited)


	Three-Months Ended				Nine-Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net income, as reported	$	452,694	$	322,387	$	1,264,009	$	889,950
Other comprehensive income (loss):
Change in foreign currency translation adjustment		(48,280)		(68,822)		(46,074)		(147,450)
Available-for-sale investments:
Change in net unrealized gains (losses)		1,272		(2,675)		3,680		(7,840)
Net gains on commodity derivatives		4,700		—		3,434		—
Other comprehensive income (loss)		(42,308)		(71,497)		(38,960)		(155,290)
Comprehensive income	$	410,386	$	250,890	$	1,225,049	$	734,660

See accompanying notes to condensed consolidated financial statements.

Table of Contents

MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE- AND NINE-MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(In Thousands) (Unaudited)


								Accumulated Other					Total
	Common stock			Additional		Retained		Comprehensive		Treasury stock			Stockholders’
	Shares	Amount		Paid-in Capital		Earnings		(Loss) Income		Shares	Amount		Equity
Balance, December 31, 2022	1,283,688	$	6,418	$	4,776,804	$	9,001,173	$	(159,073)	(239,088)	$	(6,600,281)	$	7,025,041

Stock-based compensation	—		—		15,743		—		—	—		—		15,743
Stock options/awards	3,704		19		36,329		—		—	—		—		36,348
Unrealized gain (loss), net on available-for-sale securities	—		—		—		—		3,181	—		—		3,181
Repurchase of common stock	—		—		—		—		—	(1,688)		(90,378)		(90,378)
Retirement of treasury stock	(170,000)		(850)		425		(4,692,425)		—	170,000		4,692,850		—
Foreign currency translation	—		—		—		—		7,981	—		—		7,981
Net income	—		—		—		397,444		—	—		—		397,444

Balance, March 31, 2023	1,117,392	$	5,587	$	4,829,301	$	4,706,192	$	(147,911)	(70,776)	$	(1,997,809)	$	7,395,360

Stock-based compensation	—		—		17,176		—		—	—		—		17,176
Stock options/awards	877		4		23,314		—		—	—		—		23,318
Unrealized gain (loss), net on available-for-sale securities	—		—		—		—		(773)	—		—		(773)
Repurchase of common stock	—		—		—		—		—	(8)		(447)		(447)
Foreign currency translation	—		—		—		—		(5,775)	—		—		(5,775)
Net losses on commodity derivatives	—		—		—		—		(1,266)	—		—		(1,266)
Net income	—		—		—		413,871		—	—		—		413,871

Balance, June 30, 2023	1,118,269	$	5,591	$	4,869,791	$	5,120,063	$	(155,725)	(70,784)	$	(1,998,256)	$	7,841,464

Stock-based compensation	—		—		17,605		—		—	—		—		17,605
Stock options/awards	229		1		5,893		—		—	—		—		5,894
Unrealized gain (loss), net on available-for-sale securities	—		—		—		—		1,272	—		—		1,272
Repurchase of common stock	—		—		—		—		—	(7,294)		(402,200)		(402,200)
Foreign currency translation	—		—		—		—		(48,280)	—		—		(48,280)
Net gains on commodity derivatives	—		—		—		—		4,700	—		—		4,700
Net income	—		—		—		452,694		—	—		—		452,694

Balance, September 30, 2023	1,118,498	$	5,592	$	4,893,289	$	5,572,757	$	(198,033)	(78,078)	$	(2,400,456)	$	7,873,149

Table of Contents

MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE- AND NINE-MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(In Thousands) (Unaudited) (Continued)


								Accumulated Other					Total
	Common stock			Additional		Retained		Comprehensive (Loss)		Treasury stock			Stockholders’
	Shares	Amount		Paid-in Capital		Earnings		Income		Shares	Amount		Equity
Balance, December 31, 2021	1,280,086	$	6,400	$	4,649,420	$	7,809,549	$	(69,165)	(221,440)	$	(5,829,253)	$	6,566,951

Stock-based compensation	—		—		16,175		—		—	—		—		16,175
Stock options/awards	970		6		4,504		—		—	—		—		4,510
Unrealized gain (loss), net on available-for-sale securities	—		—		—		—		(4,059)	—		—		(4,059)
Repurchase of common stock	—		—		—		—		—	(332)		(12,187)		(12,187)
Foreign currency translation	—		—		—		—		1,079	—		—		1,079
Net income	—		—		—		294,203		—	—		—		294,203

Balance, March 31, 2022	1,281,056	$	6,406	$	4,670,099	$	8,103,752	$	(72,145)	(221,772)	$	(5,841,440)	$	6,866,672

Stock-based compensation	—		—		16,157		—		—	—		—		16,157
Stock options/awards	832		4		18,108		—		—	—		—		18,112
Unrealized gain (loss), net on available-for-sale securities	—		—		—		—		(1,105)	—		—		(1,105)
Repurchase of common stock	—		—		—		—		—	(6,572)		(284,311)		(284,311)
Foreign currency translation	—		—		—		—		(79,707)	—		—		(79,707)
Net income	—		—		—		273,360		—	—		—		273,360

Balance, June 30, 2022	1,281,888	$	6,410	$	4,704,364	$	8,377,112	$	(152,957)	(228,344)	$	(6,125,751)	$	6,809,178

Stock-based compensation	—		—		16,436		—		—	—		—		16,436
Stock options/awards	602		3		12,133		—		—	—		—		12,136
Unrealized gain (loss), net on available-for-sale securities	—		—		—		—		(2,675)	—		—		(2,675)
Repurchase of common stock	—		—