Monster Beverage (Minutes): In 2026, a female-targeted energy drink brand FLRT will be launched.
$Monster Beverage(MNST.US) Below is the summary of Monster Beverage's (Monster) 3Q25 earnings call organized by Dolphin Research. For financial report interpretation, please refer to "Monster: Evolution of the Beast! Is the Frenzy Starting Again?"
- Review of Core Financial Data
- Details of the Earnings Call
2.1 Key Information from Executives
Global Energy Drink Category Outlook:
The global energy drink category maintains a healthy trend, showing strong growth. Diversified products with functional and lifestyle positioning are attracting an increasingly broad and loyal consumer base. The synergy between affordable and premium products continues to enhance household penetration. According to Nielsen data, in the 13 weeks ending October 25, 2025, energy drink sales in the U.S. grew by 12.2% year-over-year; Europe, Middle East, and Africa (EMEA) grew by approximately 13.3% (excluding currency effects); Asia-Pacific grew by approximately 20.0%; and Latin America grew by approximately 12.6%.
Innovation and Marketing Strategy:
Innovation is a key driver of category growth, and the company continues to maintain a strong pipeline of innovative products. Marketing activities focus on core business growth and attracting new consumers, with global marketing messages continuing to resonate. Highlights of the third quarter include: Monster's sponsorship of the McLaren F1 team continues to win championships; Monster Energy's sugar-containing products are well-received in EMEA and are planned for full launch in 2026; sponsorship activities such as the Salt Lake City Summer X Games bring significant exposure. The Ultra brand family drives growth through zero-sugar formula digital media marketing and retail promotions.
Pricing and Cost Management:
The company implemented pricing adjustments in the U.S. market starting November 1, 2025, achieved through raising terminal prices and/or reducing promotional subsidies. This adjustment is based on consumer purchasing behavior, brand momentum, and channel mix, with limited expected impact on sales volume. Tariffs have limited impact on operating performance, but aluminum can costs have risen due to tariffs; the company has accounted for aluminum tariffs by increasing medium-risk premiums and implementing mitigation strategies. Tariffs are expected to have a slight impact in the fourth quarter of 2025 and 2026.
Regional Business Progress and Outlook:
North American Market: In the third quarter of 2025, net sales in the U.S. and Canada grew by 11.6% year-over-year. Growth was driven by execution across all channels, momentum from innovation, strong performance of the Monster Energy Ultra series, and contributions from the Juice Monster series. The company optimized product strategy, prioritizing high-impact channel layouts, and planned a strong innovation pipeline for 2026, including the launch of Monster Energy zero-sugar version in January, Juice Monster sparkling drink in February, and a female-exclusive brand FLRT in the first quarter.
Europe, Middle East, and Africa (EMEA): Net sales grew by 30.3% in dollar terms, with currency-neutral growth of 23.0%. Gross margin increased to 37.0%. Growth was driven by cooler deployment, space layout strategy, and new product promotion, with Monster Energy Ultra and Juice Monster families performing outstandingly. The company launched the Monster Energy sugar-free series in the region and plans to expand affordable brands.
Asia-Pacific: Net sales grew by 28.7% year-over-year (in dollar terms), with currency-neutral growth of 26.9%. Gross margin increased to 40.7%. Markets in Japan, South Korea, China, and India all achieved strong growth, and the company remains optimistic about long-term prospects and affordable brand expansion.
Latin America: Net sales grew by 9.3% year-over-year (in dollar terms), with currency-neutral growth of 9.8%. Gross margin increased to 46.8%. A new consumption tax in Mexico will take effect in 2026, and the company plans to mitigate its impact.
Alcoholic Beverage Business: In the third quarter of 2025, net sales declined by 17% to $33 million. The company launched a hard lemonade product line and plans to introduce ready-to-drink spirits-based products and a new beer brand in 2026.
Other Important Information:
The company did not repurchase common stock in the third quarter of 2025, and as of November 5, 2025, approximately $500 million remains available under the repurchase plan. Sales in October 2025 grew by approximately 14.1% compared to the same period in 2024 (13% growth after foreign exchange adjustments). Overall, the company is excited about the innovation pipeline for 2026 and beyond and continues to evaluate domestic and international pricing opportunities and supply chain investments.
2.2 Q&A Session
Q: What are the reasons for the strong revenue growth in the EMEA region and the growth of the energy drink category? How does it compare to the U.S. market? What are the reasons for Monster's accelerated market share growth in the EMEA region?
A: The growth of the energy drink category in Europe is mainly driven by the following factors: energy products have a stronger value proposition compared to other non-alcoholic ready-to-drink beverages; brand image is crucial in the industry; the functionality of the products makes energy drinks a popular choice across all time periods, scenarios, and age groups. The viral spread of the Ultra White product on social media and numerous user recommendations also contributed to the growth. Research in the Western European market shows that about 25% of consumers are new users who switched from other categories (including water, juice, coffee, and carbonated soft drinks) in the past 12 months. Similar to the U.S. market, the European market also has a diversified product supply (sugar/sugar-free, various flavors) and continuous product innovation. Rising coffee prices also make energy drinks a more economical choice.
Monster's market share growth in EMEA is attributed to its performance surpassing the overall category, with growth momentum coming from both innovative products and existing bestsellers. The Ultra series (especially Ultra White) achieved growth through online social media and user recommendations, while classic products like Monster Green, Juice Monster, and zero-sugar products also strengthened market position. Innovative products like the [indiscernible] sugar series have been successful in both EMEA and U.S. limited markets, becoming one of the company's most successful launches in the EMEA region. Unlike competitors relying on single innovation drivers, Monster's growth is driven by both innovation and existing product portfolio.
Q: How do you view the future revenue trajectory and category growth? Is the strong growth expected to continue in 2026? Did the recent pricing adjustments have a positive impact on October's data?
A: The company does not provide specific guidance but can observe key growth drivers: energy drinks have a value proposition compared to other beverages (such as coffee shop coffee); household penetration is increasing; the category continues to attract new users; brand image is crucial; continuous product innovation; consumer demand for energy is widespread; the Ultra brand series plays a driving role; and the social acceptance of energy drinks is increasing (due to moderate caffeine content, lower than equivalent coffee shop coffee). Looking ahead to 2026, the company has planned price increases and a large number of innovative products for the remainder of this year and 2026, including limited-time products for the U.S. 250th anniversary. In this quarter and October's data, no impact from the price increase effective November 1 was observed.
Q: In the U.S. market, what degree of price increase is expected from the pricing measures effective November 1? Will there be significant differences in price realization across different channels?
A: The company has completed discussions with bottlers and customers, and the revised pricing took effect on November 1. The company expects minimal impact on sales volume from this price increase, reflecting the favorable value proposition of the energy drink category and historically moderate price increases compared to other non-alcoholic ready-to-drink beverage categories. Revenue growth management is a combination of art and science, aiming for revenue growth to consistently outpace sales volume growth. The company continuously evaluates price elasticity and works with bottlers and retailers to optimize the ideal balance between price, trade spending, product mix, and channel mix. The effects of this pricing adjustment will be reflected in scan data in the coming weeks.
Q: How does this pricing measure compare to last year's approximately 5% price increase?
A: Due to the complexity involving channel, packaging mix, and brand series, it is too early to specify an exact number. The related effects have appeared in stores and will be reflected in scan data in the coming weeks. The company's goal is always to manage balance, ensuring revenue growth outpaces sales volume growth, consistent with the effective strategy of 2025, and committed to continuously achieving this goal.
Q: The strong gross margin this quarter exceeded expectations, which aspects performed better than expected?
A: The improvement in gross margin was mainly due to pricing measures, supply chain optimization, and improved product sales mix (particularly the shift to zero-sugar products). These positive factors were partially offset by increased promotional spending, rising aluminum can costs, and geographic sales mix. The gross margin this quarter was flat with the previous quarter, performing satisfactorily. Tariffs had a slight impact this quarter and are expected to have a slight impact in the fourth quarter of 2025 and the first quarter of 2026. Thereafter, if conditions remain largely unchanged, the company will begin to benefit from the price increase effective in November.
Q: What is the contribution of affordable energy drinks globally and its impact on profit margins? Can it narrow the profit margin gap between international and U.S. markets?
A: The lower profit margin in international markets compared to the U.S. is mainly due to international market pricing not reaching U.S. levels and the need to maintain competitive pricing with competitors, otherwise affecting sales volume. Additionally, in most countries, costs are higher due to the lack of scale effects present in the U.S. market. Regarding affordable energy drinks, as they adopt a concentrate model, they are expected to positively contribute to the overall profit margin of international markets, as the concentrate model can bring higher profit margins than the finished product model. However, the extent of this positive contribution is not expected to be significant.
