Celsius Holdings Inc.

05/07/2026 | Press release | Distributed by Public on 05/07/2026 06:55

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.
When used in this Quarterly Report, unless otherwise indicated, the terms the "Company," "Celsius," "we," "us" and "our" refer to Celsius Holdings, Inc. and its consolidated subsidiaries.
Definitions of key terms can be found in the Master Glossary. Unless otherwise noted, tabular dollars are presented in thousands, except per share amounts.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report contains forward-looking statements that are based on the current expectations of our Company about future events within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, and are made in reliance on the safe harbor protections provided thereunder. While we have specifically identified certain information as being forward-looking in the context of its presentation, we caution you that all statements contained in this Quarterly Report that are not clearly historical in nature, including statements regarding our ability to successfully integrate Alani Nu and Rockstar; the strategic investment by and long-term partnership with Pepsi, including our responsibilities under the Captaincy and the A&R Distribution Agreements; anticipated financial performance; management's plans and objectives for international expansion and future operations globally; the successful development, commercialization and timing of new products; business prospects; outcomes of regulatory proceedings or actions; market conditions; the current and future market size for existing or new products; the impact of macroeconomic conditions, tariff policies and supply chain constraints or cost increases; potential effects of emerging climate-related disclosure laws such as California's Climate Accountability Package; ongoing and potential litigation matters; the impact of third parties attempting to replicate our product attributes; and any stated or implied outcomes with regard to the foregoing, including future tax changes under the OBBBA; and other matters are forward-looking.
Without limiting the generality of the preceding sentences, any time we use the words "expects," "intends," "will," "anticipates," "believes," "confident," "continue," "propose," "seeks," "could," "may," "should," "estimates," "forecasts," "might," "goals," "objectives," "targets," "planned," "projects," and, in each case, their negative or other various or comparable terminology, and similar expressions, we intend to clearly express that the information deals with possible future events and is forward-looking in nature. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include, without limitation:
•Our ability to successfully integrate businesses that we may acquire, achieve the expected benefits of such acquisitions and to manage multiple brands across our product portfolio;
•The potential negative impact that we could realize as a result of businesses that we may acquire;
•Liabilities of businesses that we may acquire that are not known to us;
•Our ability to maintain a strong relationship with Pepsi or any of our other distributors, including our ability to successfully execute our responsibilities under the Captaincy and the A&R Distribution Agreements;
•The increased ownership stake and additional Board representation by Pepsi may allow it to exert greater influence over our strategic and governance decisions;
•The impact of the consolidation of retailers, wholesalers and distributors in the industry;
•Our reliance on key distributor partnerships;
•The potential impact of terminating distributor relationships, including exposure to contractual, statutory or regulatory claims, increased costs, litigation risk and intensified competitive pressures;
•Our ability to maintain strong relationships with our customers and with co-packers to manufacture our products;
•Our failure to accurately estimate demand for our products;
•The impact of increases in cost or shortages of raw materials or increases in costs of co-packing;
•Our ability to successfully estimate and/or generate demand through the use of third-parties, including celebrities, social media influencers and others, may expose us to risk of negative publicity, litigation and/or regulatory enforcement action;
•The impact of additional labeling or warning requirements or limitations on the marketing or sale of our products;
•Our ability to successfully expand outside of the U.S. and the impact of U.S. and international laws, including export and import controls and other risk exposure;
•Our ability to successfully complete or manage strategic transactions, successfully integrate and manage our acquired businesses, brands or bottling operations or successfully realize a significant portion of the anticipated benefits of our joint ventures or strategic relationships;
•Our ability to protect our brand, trademarks, proprietary rights and our other intellectual property, and the impact of third parties attempting to create lower-cost products that attempt to replicate our product attributes;
•The impact of internal and external cyber-security threats and breaches, including risks arising from emerging artificial intelligence-enabled threats;
•Our ability to comply with data privacy and personal data protection laws;
•Our ability to effectively manage future growth;
•The impact of global or regional catastrophic events on our operations and ability to grow;
•The impact of any actions by the U.S. Food and Drug Administration regarding the manufacture, composition/ingredients, packaging, marketing/labeling, storage, transportation and/or distribution of our products, or any required or elective recall of our products from distribution;
•The impact of any actions by any regulatory bodies on our advertising;
•The impact of current and potential litigation matters, whether or not successful, on our brand, reputation, results of operations, and cash flows;
•Our ability to effectively compete in the functional beverage product industry and the strength of such industry;
•The impact of changes in consumer product and shopping preferences;
•The impact of changes in government regulation and our ability to comply with existing and emerging regulation concerning energy drinks, including climate-disclosure and environmental-reporting requirements;
•The potential effects of tariffs, macroeconomic instability or inflationary pressures on our supply chain, operating costs and consumer demand;
•Our ability to execute any share repurchase program, including the timing, amount and funding of any repurchases and the potential impact of such repurchases on our liquidity and the trading price of our Common Stock;
•Other statements regarding our future operations, financial condition, prospects and business strategies; and
•Those factors contained in this Quarterly Report under the heading, "Risk Factors".
Forward-looking statements and information involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied in or reasonably inferred from, such statements, including without limitation, the risks and uncertainties disclosed or referenced in Part I, Item 1A Risk Factors of our Annual Report. Therefore, caution should be taken not to place undue reliance on any such forward-looking statements. Much of the information in this Quarterly Report that looks toward future performance is based on various factors and important assumptions about future events that may or may not actually occur. As a result, our operations and financial results in the future could differ materially and substantially from those we have discussed in the forward-looking statements included in this Quarterly Report. We assume no obligation (and specifically disclaim any such obligation) to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.
Our Business
Executive-Level Overview
Celsius is a functional energy drink company operating in the U.S. and internationally. Our portfolio consists of three brands: CELSIUS®, our core functional energy brand; Alani Nu®, a wellness-focused energy and nutrition brand acquired in April 2025; and Rockstar®, an established energy brand with a strong heritage, acquired in August 2025. Together, these brands form a differentiated, multi-brand platform designed to serve distinct consumers, occasions and energy needs, supporting functional performance, better-for-you formulations and active lifestyles.
CELSIUS® is a functional energy brand offering products across a range of formats, including ready-to-drink, on-the-go powder and hydration, designed to support active and wellness-oriented lifestyles for consumers who are 18 years and older. Our product range is widely available across the U.S. and in select territories in Canada in various retail outlets, including grocery stores, natural product stores, convenience stores, fitness centers, mass retailers, vitamin specialty stores and through e-commerce platforms. Moreover, our products are offered in select markets in Europe, the Middle East and the Asia-Pacific region as we have continued to expand our global presence.
Alani Nu expands our portfolio further into wellness and nutrition, broadening our reach across consumers, occasions and product formats, with a product range spanning energy drinks, pre-workout formulas, protein beverages and supplements. With a strong following among Gen Z and female consumers, who are 18 years and older, Alani Nu enhances our ability to connect with key consumer segments, strengthens our innovation pipeline and supports continued expansion.
Rockstar Energy further strengthens our total energy portfolio by adding both full-sugar and zero-sugar offerings that complement our existing brands. With established brand equity, Rockstar enhances our ability to serve core energy consumers who are 18 years and older. Together, our brands enable a portfolio-led approach to serving diverse consumer preferences across performance, lifestyle and traditional energy occasions.
We engage in developing, manufacturing, processing, marketing, selling and distributing Celsius, Alani Nu and Rockstar products. Our operational model strategically relies primarily on co-packers for the manufacture and supply of our products, leveraging their specialized expertise and scalable production capabilities. Additionally, we utilize our in-house manufacturing facility to complement our strategic use of co-packers. This approach allows us to maintain flexibility in responding to market demands and to focus our resources on innovation, marketing and expanding our distribution channels. We continuously assess and work to optimize our supply chain to ensure quality, consistency and timely delivery to our customers.
Building on the long-term distribution arrangement that we originally established with Pepsi in August 2022, we entered into a series of transactions on the Closing Date of the Pepsi Transactions that expanded our strategic partnership. These included (i) the Rockstar Acquisition, (ii) the issuance of Series B Preferred Stock and amendment of the existing Series A Preferred Stock and (iii) the execution of the A&R Distribution Agreements, which designate Pepsi as the primary distributor of our Alani Nu and Rockstar products in the U.S. and Canada. Under the enhanced commercial arrangement, Pepsi has agreed to use its commercially reasonable efforts to sell and distribute our full portfolio of products in the U.S. in accordance with the Captaincy.
Impact of Macroeconomic Trends
The imposition of tariffs, including U.S. tariffs imposed or threatened to be imposed on other countries and any tariffs imposed by such countries, have impacted and could continue to impact our supply chain, including the cost of certain raw materials and packaging, including aluminum. In February 2026, the U.S. Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act were unlawful, and those duties were subsequently terminated. While this may present a potential refund opportunity, the pathway and timing of any such refunds remain uncertain. The current administration has since imposed alternative tariffs under other statutory authority, and we continue to monitor developments. Any supply chain constraints, inflationary impacts, or reduced consumer demand as a result of such tariffs or ongoing macroeconomic uncertainty could impact our results.
Similarly, the ongoing conflict in the Middle East, including tensions involving Iran, has impacted and could continue to impact our operations through increased fuel, energy and transportation costs, as well as supply chain disruptions and increased cost of aluminum. Although we sell products in the Middle East, revenue from that region is not material to our overall results, and we do not anticipate the conflict to have a meaningful direct impact on our net sales.
The rapidly changing nature of global trade policies, tariff regulations, geopolitical developments and other aspects of the macroeconomic environment make it difficult to reasonably estimate potential future impacts on our cost structure and results of operations.
Impact of One Big Beautiful Bill Act
On July 4, 2025, the OBBBA was signed into law in the U.S. The legislation introduced a wide array of changes to the U.S. corporate tax system, including permanent extensions of certain provisions of the Tax Cuts and Jobs Act of 2017 and substantial modifications to the international tax regime applicable to U.S. multinational corporations. Significant provisions include the permanent restoration of 100% bonus depreciation for qualifying property, changes to the global intangible low-taxed income regime, now referred to as net CFC tested income, the treatment of foreign tax credits, and the foreign-derived intangible income deduction. We evaluated the applicable OBBBA provisions and incorporated their impact into our March 31, 2026 financial statements. The impact of the OBBBA provisions is not expected to have a material impact on our 2026 annual effective tax rate.
Results of Operations
Three months ended March 31, 2026 compared to three months ended March 31, 2025
Revenue
For the three months ended March 31, 2026, revenue was approximately $782.6 million, an increase of $453.3 million or 137.7%, from $329.3 million for the three months ended March 31, 2025.
For the three months ended March 31, 2026, revenue in North America increased by $440.8 million, or 143.8%, compared to the three months ended March 31, 2025. The increase was driven primarily by the Alani Nu Acquisition, which contributed approximately $368.1 million. Approximately $66.6 million of the increase was attributable to the Rockstar Acquisition.
European revenues for the three months ended March 31, 2026 were approximately $25.4 million, representing an increase of $6.7 million, or 35.9%, compared to the three months ended March 31, 2025. Asia-Pacific revenues generated approximately $7.0 million for the three months ended March 31, 2026, with other international markets contributing an additional $3.0 million in revenue for the same period. Our international markets have continued to expand, driven by new market launches and continued investment in distribution, marketing and strategic partnerships to support long-term growth.
The following table sets forth revenue by geographical location:
Three Months Ended March 31,
2026 2025
Change
North America $ 747,316 $ 306,534 143.8 %
Europe 25,354 18,659 35.9 %
Asia-Pacific 6,995 2,244 211.7 %
Other 2,950 1,839 60.4 %
Revenue $ 782,615 $ 329,276 137.7 %
Gross Profit
For the three months ended March 31, 2026, gross profit increased by $205.7 million to $378.1 million, an increase of 119.3%, from $172.4 million for the three months ended March 31, 2025. Gross profit margin decreased to 48.3% for the three months ended March 31, 2026 from 52.3% for the three months ended March 31, 2025. The decrease in gross profit margin was primarily driven by increased promotional activity as a percentage of revenue and increased aluminum costs. Freight costs also contributed to margin compression, driven by integration-related freight disruptions, increased freeze protection and tariffs.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three months ended March 31, 2026 were $234.6 million, an increase of $114.3 million, or 95.0%, from $120.3 million for the three months ended March 31, 2025. The increase was primarily driven by incremental costs associated with the expansion of our portfolio from one brand to three brands, including increased investment in brand awareness and marketing initiatives, higher employee and professional service costs and other expenses associated with supporting and marketing three brands. The current period also included acquisition-related transition, integration, and intangible asset amortization costs that were not present in the prior year period. Additionally, the current period reflected charges of $25.5 million related to an ongoing legal matter. These increases were partially offset by a decrease in deal and transaction costs that were higher in the prior year in connection with completing the Alani acquisition.
Distributor Termination Fees
For the three months ended March 31, 2026, we recorded $4.4 million of distributor termination fees related to the termination of certain former Alani Nu distributors, primarily reflecting adjustments to previously accrued amounts based on information that was not available as of December 31, 2025. There were no such expenses for the three months ended March 31, 2025.
Other (Expense) Income
Total other expense was $1.5 million for the three months ended March 31, 2026, compared to total other income of $9.0 million for the three months ended March 31, 2025, reflecting an expense increase of $10.5 million. The changes in total other (expense) income reflect an $11.8 million increase in interest expense related to our outstanding debt, whereas no such debt existed in the prior-year period, and a $4.9 million decrease in interest income as a result of lower average cash balances as we utilized our cash reserves for strategic investments and share repurchase activities. These changes were partially offset by a $6.2 million increase in other income, net, primarily reflecting sales of Rockstar products for which we acted as an agent under a transition services agreement during the three months ended March 31, 2026. This arrangement is transitional in nature, with no comparable activity in the prior-year period.
Provision for Income Taxes
The effective income tax rate for the three months ended March 31, 2026 was 19.9% compared to 27.2% in the comparable prior year period. The decrease in the effective tax rate was due primarily to foreign tax credit utilization and windfall tax benefits on the vesting of restricted stock. The effective tax rate for the three months ended March 31, 2026 varied from the U.S. statutory rate due primarily to the geographical mix of earnings and permanent tax differences related to stock compensation.
We are subject to U.S. federal income tax as well as income tax in multiple state and foreign jurisdictions. Our tax returns for tax years beginning 2021 remain subject to potential examination by the taxing authorities.
Net Income Attributable to Common Stockholders
Net income attributable to common stockholders for the three months ended March 31, 2026 was $85.1 million, representing basic EPS of $0.33 based on a basic weighted average of 257.0 million shares outstanding. In comparison, for the three months ended March 31, 2025, net income attributable to common stockholders was $34.4 million, representing basic EPS of $0.15 based on a weighted average of 235.2 million shares outstanding. Diluted EPS was $0.33 and $0.15 for the three months ended March 31, 2026 and 2025, respectively.
The increase in net income attributable to common stockholders for the three months ended March 31, 2026 was primarily driven by the increase in revenue and gross profit resulting from our Alani Nu and Rockstar acquisitions. This impact was partially offset by dividends on our Series B Preferred Stock, which was not outstanding in the prior year period, higher interest expense related to incurred debt and higher selling, general and administrative expenses reflecting the expansion to a three-brand portfolio and increased costs from ongoing litigation. Additionally, basic and diluted EPS for the quarter ended March 31, 2026 were impacted by an increase in weighted average shares outstanding as compared to the prior year period, primarily as a result of Common Stock issued in connection with the Alani Nu Acquisition.
Liquidity and Capital Resources
General
As of March 31, 2026, we had unrestricted cash and cash equivalents of approximately $549.2 million and net working capital of $812.9 million.
Our primary sources of liquidity are cash flows from operations and our existing cash balances. We expect that purchases of inventories, increases in accounts receivable and other assets, equipment purchases, advances to certain co-packers and distributors, payments of accounts payable, income taxes, dividends paid on our Preferred Stock, debt repayments and stock repurchases will remain our principal recurring uses of cash. We believe that cash available from operations, together with our $100.0 million Revolving Credit Facility, will be sufficient for our working capital needs, including purchase commitments for raw materials and inventory, increases in accounts receivable and other assets, and purchases of capital assets and equipment for the next twelve months and beyond.
Cash flows for the three months ended March 31, 2026 and 2025
Cash provided by operating activities
Cash provided by operating activities totaled $73.7 million for the three months ended March 31, 2026 compared to $103.4 million cash provided by operating activities for the three months ended March 31, 2025. The $29.7 million decrease was primarily driven by the settlement of $224.1 million in accrued distributor termination fees, with no comparable transactions in the prior year. This outflow was partially offset by $64.2 million collected from Pepsi during the three months ended March 31, 2026 related to the receivable recognized as of December 31, 2025, which was fully used to fund distributor termination settlements and is reflected in the change in prepaid expenses and other current assets. The decrease was further driven by an $80.0 million increase in accounts receivable-net, reflecting the timing of invoicing and collections processing, which resulted in a higher balance of outstanding receivables at period end as compared to the prior-year period, and a $13.8 million payment for the portion of contingent consideration in excess of its acquisition-date fair value. These outflows were partially offset by higher net income driven by revenue growth attributable to the Alani Nu and Rockstar Acquisitions, as well as increases in accrued promotional allowances and accounts payable consistent with the expanded scale of our operations.
Cash used in investing activities
Cash used in investing activities totaled $7.7 million for the three months ended March 31, 2026, compared to cash used in investing activities of $6.9 million for the three months ended March 31, 2025. Cash used in investing activities was primarily related to the purchases of property, plant and equipment in both periods presented.
Cash used in financing activities
Cash used in financing activities totaled $55.9 million for the three months ended March 31, 2026, compared to $10.6 million cash used in financing activities for the same period in 2025, representing a $45.3 million increase. The increase was primarily driven by $20.1 million of Common Stock repurchases, an $11.2 million payment for the portion of contingent consideration up to the acquisition-date fair value, and $7.2 million of dividends paid on Series B Preferred Stock, each of which had no comparable activity in the prior year period. This was partially offset by the absence of debt issuance costs.
Off Balance Sheet Arrangements
As of March 31, 2026 and December 31, 2025, we had no off balance sheet arrangements.
Critical Accounting Policies and Estimates
Our Condensed Consolidated Financial Statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions that affect the reported amounts in our Condensed Consolidated Financial Statements. Critical accounting policies and estimates are those that management believes are the most important to the portrayal of our financial condition, results of operations and cash flows, and require the most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and that have had, or are reasonably likely to have, a material impact on our financial condition or results of operations. Judgments and uncertainties may result in materially different amounts being reported under different conditions or using different assumptions. There have been no material changes to our critical accounting policies or estimates from those described in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report.
Celsius Holdings Inc. published this content on May 07, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on May 07, 2026 at 12:56 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]