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Celsius Holdings, Inc. (CELH)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered a top-line beat and strong margins but GAAP EPS was negative due to large, non-cash distributor termination charges tied to moving Alani Nu into PepsiCo’s DSD system; revenue was $725.1M vs ~$718.0M consensus*, and adjusted diluted EPS was $0.42 vs ~$0.28 consensus*, while GAAP diluted EPS was $(0.27) .
  • Gross margin remained robust at 51.3% (up 530 bps YoY) aided by mix and scale, offset partially by tariffs and the lower-margin profiles of Alani Nu and Rockstar .
  • Management emphasized near-term “noise” in Q4 from integration (returns, warehouse optimization, freight/scrap) and tariff pressure, with sales & marketing rising to 23–25% of sales in Q4, before benefits from the Alani transition ramp in Q1 2026; Rockstar margin improvement targeted starting 1H 2026 .
  • Strategic catalysts: deeper PepsiCo partnership (energy category captaincy), Alani Nu integration (Dec 1 start in Pepsi system), Rockstar U.S./Canada acquisition contribution, and a $300M share repurchase authorization announced post-quarter, all positioning the portfolio for 2026 growth .

What Went Well and What Went Wrong

What Went Well

  • Portfolio-scale growth and share gains: U.S. RTD energy retail sales for the portfolio rose 31% L13W, with U.S. dollar share at 20.8% (+2.1 pts YoY, +1.2 pts QoQ) .
  • Gross margin resilience: Q3 GM of 51.3% (+530 bps YoY) on lower net promotional spend, favorable pack/channel mix, and raw-material scale benefits, despite tariffs and acquired brands’ margin profiles .
  • Alani Nu outperformance and integration roadmap: Alani Nu retail sales +114% L13W; distribution shift into Pepsi DSD begins Dec 1; portfolio captaincy enables planogram control and unified commercial strategy .

Quotes:

  • “Combined, our brands grew nearly twice as fast as the U.S. energy drink category… With a broader portfolio… we’re operating from a position of strength” — John Fieldly, CEO .
  • “We recorded approximately $247 million in distributor termination expenses… fully funded by PepsiCo… cash‑neutral to Celsius” — Jarrod Langhans, CFO .

What Went Wrong

  • GAAP loss from distributor termination accrual: $(61.0)M net loss; GAAP diluted EPS $(0.27) as the company accrued $246.7M to move Alani Nu into Pepsi’s DSD network; reimbursements are deferred on balance sheet and amortized over time (timing mismatch) .
  • Q4 set to be “noisy”: integration-related returns, freight/scrap, tariff pressure, and year-end customer cash management could pressure gross margin and elevate opex short-term .
  • CELSIUS brand scanner vs reported growth delta: Q3 CELSIUS revenue +44% YoY vs +13% U.S. scanner growth, primarily due to YOY inventory movements, lapping last year’s distributor optimization, and promotional/international factors—an area of investor scrutiny raised in Q&A .

Financial Results

Headline P&L vs Prior Periods and Estimates

MetricQ3 2024Q1 2025Q2 2025Q3 2025 ActualQ3 2025 ConsensusSurprise
Revenue ($M)265.7 329.3 739.3 725.1 718.0*+$7.1M vs est *
Gross Margin (%)46.0% 52.3% 51.5% 51.3% N/AN/A
GAAP Diluted EPS ($)0.00 0.15 0.33 (0.27) N/AN/A
Adjusted Diluted EPS ($)0.00 0.18 0.47 0.42 0.28*+$0.14 vs est *
Adjusted EBITDA ($M)4.4 69.7 210.3 205.6 N/AN/A

Notes: Consensus from S&P Global; asterisked values are “Values retrieved from S&P Global”.

  • Revenue Consensus Mean Q3 2025: $718,035,780; Adjusted/Primary EPS Consensus Mean Q3 2025: $0.2775; # EPS est: 11; # Revenue est: 18.*

Revenue by Geography (trend)

Revenue ($M)Q1 2025Q2 2025Q3 2025YoY (Q3)
North America306.5 714.5 702.0 +184% vs 3Q24 (247.1)
International22.8 24.8 23.1 +24% vs 3Q24 (18.6)
Total329.3 739.3 725.1 +173% vs 3Q24 (265.7)

KPIs and Market Metrics

KPIQ2 2025Q3 2025Commentary
U.S. RTD Energy Portfolio Share17.3% (L13W to 6/29) 20.8% (L13W to 9/28) +1.2 pts seq; +2.1 pts YoY
CELSIUS brand retail sales growth+3% YoY (L13W) +13% YoY (L13W) Sequential reacceleration
Alani Nu retail sales growth+129% YoY (L13W) +114% YoY (L13W) Triple-digit momentum
Rockstar retail sales growthN/A(9)% YoY (L13W) Stabilization effort planned 2026
Adjusted EBITDA Margin28.4% 28.4% Stable despite integration

Additional P&L/Accounting Items

  • Distributor termination expense: $246.7M accrued in Q3 (GAAP P&L), fully funded by PepsiCo; cash-neutral with reimbursements deferred on balance sheet and amortized over agreement life .
  • Rockstar contribution: ~+$11M revenue in September plus ~+$7M recorded in other income due to GAAP treatment; similar in Q4 before normalizing in 2026 .

Guidance Changes

Metric/TopicPeriodPrevious GuidanceCurrent Guidance/CommentaryChange
Sales & Marketing as % of SalesQ4 2025None specified23%–25% of sales in Q4 as investments continue New
Gross Margin TrajectoryQ4 2025None specifiedMore pressure vs prior three quarters (promos, scrap, freight, tariffs) before re-expanding in Q1 2026 New
Alani Nu Distribution TransitionDec 1, 2025 start; ramp into Q1 2026N/APhase-in across Pepsi DSD; most financial benefit realized in Q1 2026 New
Rockstar Margin Outlook1H 2026N/AMargin improvement expected to begin in 1H 2026 New
Leverage/Interest Expense2026N/APost-Q3: $200M debt reduction; rate down 75 bps; ~$20M annual interest savings from 2026 New
Capital ReturnsOpen-endedN/A$300M share repurchase authorization approved Nov 10, 2025 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
Pepsi partnership & distributionBuilding operational excellence; COO hire from Pepsi; strong foodservice wins Share up to 17.3%; portfolio momentum Energy captaincy within Pepsi; Alani into Pepsi DSD Dec 1; unified planograms Strengthening
Pricing/promo strategyCautious on consumer; took price in Q4’24; flexible promos —Evaluating price and revenue management; no formal announcement Under evaluation
Tariffs/supply chainWatching tariffs; gross margin near 50% base business Tariffs limited in Q2 due to FIFO; inventory step-up impacted GM Tariffs intensified; more impact in Q4; freight/scrap during transition Near-term headwind
Product/innovationNew flavors; hydration powders; Essentials expansion Record Alani LTOs; CELSIUS momentum Alani Witches Brew record; CELSIUS Spritz 5 LTO; portfolio storytelling Strong driver
International expansionDouble-digit growth; disciplined rollout (ANZ, UK/EU) +27% Intl revenue; continued momentum Growth in Nordics and expansion markets; new Intl President Building
Rockstar strategy——Stabilize and rebuild identity; improve margins 1H 2026 Repositioning

Management Commentary

  • “We strengthened our long-term partnership with PepsiCo and united CELSIUS, Alani Nu, and Rockstar Energy under one total energy portfolio… operating from a position of strength” — John Fieldly, CEO .
  • “We recorded approximately $247 million in distributor termination expenses… fully funded by PepsiCo… cash‑neutral to Celsius” — Jarrod Langhans, CFO .
  • “We anticipate Q4 will be a noisy quarter… potential for more pressure on our gross margins in Q4 2025… before re‑expanding in Q1 2026” — Jarrod Langhans, CFO .
  • “We’re optimizing our Rockstar Energy portfolio… medium‑term goal of stabilizing the brand… grow the next generation of energy drink consumers” — John Fieldly .

Q&A Highlights

  • Scanner vs reported growth delta: Mgmt reiterated that CELSIUS +44% revenue vs +13% scanner growth reflects YOY inventory movements (lapping last year’s optimization), promos, and international expansion; scanner remains a good barometer of health .
  • Q4 outlook/“noise”: Returns from prior distributors, warehouse optimization, freight/scrap, and customer cash management could affect sales timing and margins; mgmt declined to quantify netting, pointing investors to scanner trends .
  • Pricing: Considering price and promotional optimization across Celsius, Alani, Rockstar; building revenue management capabilities; no specifics announced .
  • Tariffs and costs: Tariffs increased from Q2 into Q3 and likely more in Q4; offset efforts include sourcing scale, plant expansion (second line), and freight savings as brands integrate .
  • Alani distribution ramp: Phase-in through Q4/Q1; captaincy enables planogram control and targeted ACV/TDP expansion; learnings from 2022 Celsius transition should improve execution .

Estimates Context

  • Q3 2025 Actual vs S&P Global Consensus: Revenue $725.1M vs ~$718.0M*; Adjusted/Primary EPS $0.42 vs ~$0.28* — both beats. GAAP diluted EPS $(0.27) reflects non-cash distributor termination accruals *.
  • Implications: Street models likely need to incorporate Q4 gross margin pressure (promos, tariffs, scrap/freight) and elevated S&M (23–25% of sales) before re-expansion in Q1 2026; 2026 estimates should embed Alani benefits and early Rockstar margin improvement per management commentary .
  • Consensus details (S&P Global): Revenue est $718,035,780; Primary EPS est $0.2775; EPS est count 11; Revenue est count 18.*

Values retrieved from S&P Global (asterisked entries).

Key Takeaways for Investors

  • Quality beat with strong margins: Revenue and adjusted EPS exceeded consensus while gross margin stayed >51%, demonstrating portfolio strength despite integration/tariff headwinds .
  • GAAP vs non-GAAP matters near term: Large, cash-neutral Pepsi-funded distributor termination costs flip GAAP EPS negative in Q3; amortization timing creates P&L lag vs cash .
  • Expect Q4 “noise”: Integration returns, freight/scrap, and tariffs pressure Q4; S&M intensity steps up to support brand equity—watch scanner trends for underlying health .
  • 2026 setup improving: Alani Nu integration into Pepsi DSD (Dec 1) should benefit Q1 2026; Rockstar margin lift targeted 1H 2026; deeper Pepsi partnership (captaincy) enhances shelf execution .
  • Shareholder returns and balance sheet: $300M buyback authorization post-Q3; debt reduced by $200M and rate down 75 bps post-quarter, implying ~$20M annual interest savings beginning 2026 .
  • Focus watchlist: Tariff dynamics, promo cadence in Q4, Alani ramp velocity, Rockstar stabilization, and international scaling pace .

Appendix: Select Financial Statements Excerpts

  • Q3 2025 Statement of Operations highlights (Revenue $725.1M; Gross Profit $372.3M; GAAP Net Loss $(61.0)M) .
  • Balance sheet at 9/30/25 (Cash & equivalents $806.0M; Total assets $5.27B; Long-term debt $861.5M) .