eb2e41aeeedf6e6287a223a79f4bee3c648ef8f04657b1bd8f690f2d6a31d5fe

Adjustments for Non-Cash Items (USD, thousands)

Stock-Based Compensation (USD, thousands)

Changes in Working Capital (USD, thousands)

Capital Expenditures (CapEx) (USD, thousands)

Proceeds from / Repayments of Debt (USD, thousands)

Share Repurchases (USD, thousands)

Dividend Payments (USD, thousands)

Net Change in Cash (USD, thousands)

69a3907c317d6d82d09204372978677393fe0229d8009a45deb43bd8f6786cd8

fcb00f237e74e2c8307983db4b6acadf94cc448e9137cce02e6282fad083bc5e

Retail Accounts

Health and Fitness Accounts

Internet Retailer Accounts

Total Revenue

84a442536a516f6c1beb3f7d1e9ad5fe41b957d2440dab30bbbace2fb434d27d

North America

Europe

- Sweden

Asia-Pacific

Other

Domestic Revenue

International Revenue

17f1f1ba1c34ac0388c4e8e29847dc5f95744e2a53e31edcb1f37e75faf5f716

Total Liabilities (USD, thousands)

Series A convertible preferred stock, aggregate liquidation preference (USD, thousands)

Common stock (USD, thousands)

Additional paid-in capital (USD, thousands)

Accumulated other comprehensive loss (USD, thousands)

Retained earnings (accumulated deficit) (USD, thousands)

Total Stockholders’ Equity (USD, thousands)

Total Liabilities, Mezzanine Equity and Stockholders’ Equity (USD, thousands)

9d863912cf834561d4b87c13d44f402f73ab20bdaf911c74154865a1580ab2d4

66c67e758cdfec45413a1aca18aa4ebeac0e5a4798169b0f6d5aa13a5acc9587

Revenue (USD, thousands)

Cost of Revenue (USD, thousands)

Gross Profit (USD, thousands)

Selling, General and Administrative Expenses (USD, thousands)

(Loss) Income from Operations (USD, thousands)

Interest Income-Net (USD, thousands)

Total Other Income (USD, thousands)

Net Income Before Provision for Income Taxes (USD, thousands)

Provision for Income Taxes (USD, thousands)

Net Income (USD, thousands)

Dividends on Series A Convertible Preferred Stock (USD, thousands)

Income Allocated to Participating Preferred Stock (USD, thousands)

Net (Loss) Income Attributable to Common Stockholders (USD, thousands)

Foreign Currency Translation Adjustments, Net of Income Tax (USD, thousands)

Comprehensive Income (USD, thousands)

(Loss) Earnings per Share Basic (USD)

(Loss) Earnings per Share Diluted (USD)

7ec9e1c2ac6875f5e30233eb623eb57ad87bd99bfac3249224d493c47c692aba

The operating income dropped to a loss in Q3 2024 primarily due to a **sharp revenue decline**—a decrease of **31%** driven by inventory optimization by the largest distributor—which resulted in significantly lower earnings. Additionally, there was a **37% reduction in gross profit** as margins fell due to increased promotional allowances and billbacks, while **SG&A expenses escalated by 30%** (including a **$17.5 million** rise in marketing, **$9.3 million** in employee costs, and **$2.2 million** in other expenses). Furthermore, the full implementation of a distributor incentive program and softer macroeconomic conditions compounded the challenges, ultimately turning positive operating income into a loss for the period.  **[0001341766-24-000095_ex9913q2024.htm:0]** **[CELH_3406034_3]** **[0001341766-24-000093_celh-20240930.htm:45]** 

Why did operating income drop to a loss in Q3 2024?

The significant revenue decline in **Q3 2024** was primarily driven by several factors. **Inventory optimization by the largest distributor** significantly reduced revenue—by about **$123.9 million** compared to the previous year. In addition, **promotional allowances and the full implementation of an incentive program** with this distributor created further revenue headwinds, as these factors were not offset by proportional distributor sell-in. Moreover, **macroeconomic conditions and reduced unit velocity** also contributed to the fall. Lastly, while some international regions saw revenue gains, the decline in **North America** (down **33%**) had a major impact on the overall revenue drop.  **[CELH_3406034_3]** **[0001341766-24-000095_ex9913q2024.htm:1]** **[0001341766-24-000093_celh-20240930.htm:45]** 

What caused the significant revenue decline in Q3 2024?

There is conflicting information in the documents. One source directly reports Q4 2023 Basic EPS as a loss of **(1.07)**  **[0001341766-24-000015_celh-20231231.htm:81]** , while another source explains the quarter‐on‐quarter changes (versus Q4 2022) indicating that improvements in revenue growth, gross profit margins, net income, and lower sales and marketing expenses helped EPS improve to **$0.17**.  **[0001341766-24-000016_q4andfy2023earningspressre.htm:0]**  None of the documents explicitly explain why EPS would have turned negative in Q4 2023 compared to Q3 2023. Therefore, based solely on the provided documents, we cannot definitively determine the reason for the negative EPS reported in Q4 2023.

Why did EPS turn negative in Q4 2023?

The turnaround in CELH’s net income for FY 2023 was driven by several key factors. First, **substantial revenue growth** (an increase of **102%** from **$654 million** to **$1.32 billion**) significantly boosted the top line.  **[0001341766-24-000016_q4andfy2023earningspressre.htm:0]** **[0001341766-24-000016_ex9921.htm:0]** **[0001341766-24-000016_ex9921.htm:1]**  Second, **improved gross profit margins**—with gross profit rising to **$633 million** and margins increasing to **48.0%**—helped drive profitability.  **[0001341766-24-000016_ex9921.htm:0]** **[0001341766-24-000016_ex9921.htm:1]**  Third, the company achieved **operational efficiencies** by reducing SG&A expenses from **$429 million** to **$367 million**, further contributing to the improved net income.  **[0001341766-24-000015_celh-20231231.htm:81]** **[0001341766-24-000016_ex9921.htm:1]**  Additionally, the absence of a one-time charge of **$193.8 million** in distributor termination fees, which impacted FY 2022, played a role, along with a notable rise in **non-GAAP adjusted EBITDA**.  **[0001193125-24-094699_d769730ddef14a.htm:63]**  These combined factors collectively resulted in the shift from a net loss in FY 2022 to a significant net income in FY 2023.  **[0001341766-24-000015_celh-20231231.htm:112]** 

What drove the turnaround in net income in FY 2023?

The drastic drop in Q3 2024 net income was driven by several factors. **Distributor Inventory Optimization** led to a reduction in revenue by about **$124 million** and a **31% decline** in total revenue, as the company’s largest distributor optimized its supply chain.  **[0001341766-24-000095_ex9913q2024.htm:0]** **[CELH_3406034_3]** **[0001341766-24-000095_ex9913q2024.htm:1]**  **Promotional Allowances and Incentive Programs** also played a role by negatively impacting gross profit margins, which fell from **50.4%** in Q3 2023 to **46.0%** in Q3 2024.  **[0001341766-24-000095_ex9913q2024.htm:0]** **[CELH_3406034_3]** **[0001341766-24-000095_ex9913q2024.htm:1]**  Additionally, **Higher Operating Expenses** contributed to the decline, with selling, general, and administrative expenses increasing by **30%** to **$125,443,000** compared to the previous year.  **[0001341766-24-000095_ex9913q2024.htm:5]** **[0001341766-24-000093_celh-20240930.htm:4]**  Finally, these operational challenges were compounded by a **96% drop in Adjusted EBITDA**—from **$103,600,000** in Q3 2023 to **$4,400,000** in Q3 2024—which further explains the significant reduction in net income.  **[0001341766-24-000095_ex9913q2024.htm:0]** **[0001341766-24-000095_ex9913q2024.htm:1]** 

What factors contributed to the drastic drop in net income in Q3 2024?

766df83b987232f053e23f7a5a4adf3758b1393eccb83244cf513f411dca19ab

Celsius Holdings Inc (CELH)

Financials