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Celsius Holdings Earnings: Soft Q1 Revenue, Strong Margin and International Momentum

  • Writer: Hardik Shah
    Hardik Shah
  • 1 day ago
  • 3 min read
Celsius and Alani Nu Energy drinks

TLDR

  • Revenue fell 7% amid lapping tough comps and softer Q1 velocity, but gross margin expanded 110 bps to 52.3% driven by sourcing efficiencies.

  • Alani Nu acquisition closed, now exceeding $1 billion in trailing sales and already adding to portfolio strength with 88% YoY growth.

  • International sales soared 41%, highlighting success in new markets like UK, Ireland, and Australia, while U.S. share held steady despite heightened competition.


Business Overview


Celsius Holdings (NASDAQ: CELH) is a leader in the functional energy beverage space, offering better-for-you products targeted toward active and wellness-focused consumers. The company’s flagship CELSIUS brand has gained a loyal following, while the newly acquired Alani Nu brand expands its portfolio with a strong female consumer base. In addition to ready-to-drink energy beverages, Celsius now offers electrolyte powders via CELSIUS HYDRATION and continues to push into foodservice and international channels.


Celsius Earnings - Q1'25

Revenue:

  • $329.3 million, down 7% YoY (U.S. down 10%, International up 41%)

Gross Margin:

  • 52.3%, up 110 basis points from 51.2% last year — aided by sourcing efficiencies and operational scale

Adjusted EBITDA:

  • $69.7 million, down 21%, with margin of 21.2% (vs. 24.7% last year)

Net Income:

  • $34.4 million attributable to common shareholders, or $0.15 diluted EPS (Adjusted EPS $0.18 vs. $0.27 last year)

Balance Sheet:

  • $977 million in cash before Alani Nu deal close; $900 million debt and $400 million cash were used to fund the deal in Q2

“While revenue was down year over year, retail scanner data showed a 2% increase in dollar sales... business fundamentals strengthened through the quarter.” — CEO John Fieldly

Forward Guidance

Management expects easier comps and shelf space gains to support a return to growth in the back half of 2025. Q2 will reflect the Alani Nu acquisition, with some margin pressure from purchase accounting impacts. While tariffs and input costs remain watch points, Celsius reaffirmed its 50% gross margin target for the year and highlighted improved velocity exiting Q1.


“Once we get into June, you’ll start to see some much easier comps... and improvement in velocity gives us strong conviction going into the summer.” — CEO John Fieldly

Operational Performance


  • Shelf Space Expansion: Strong momentum expected with new innovation (Playa Vibe, Retro Vibe, Mango Lemonade) and expanded cold placement at checkout driving incremental sales opportunities.

  • Alani Nu Synergy: Integration is underway with limited cannibalization (only 15% crossover) and growing appeal across foodservice, e-commerce, and convenience channels.

  • Foodservice & On-Premise: Expanded into 1,800 Home Depot and 18,000 Subway locations during Q1

“Foodservice now represents ~13% of North America sales through PepsiCo, and we see compelling runway ahead.” — CEO John Fieldly

Market Insights

The U.S. energy category has remained resilient, bolstered by sugar-free growth which overtook full-sugar varieties for the first time in 2024. Celsius and Alani Nu together accounted for 20% of total category growth in Q1 2025, with female consumers increasingly drawn to the category. Internationally, Celsius is expanding methodically, already capturing meaningful share in markets like Sweden (13.5%) and Australia (2.5%).


Strategic Initiatives


  • Alani Nu Acquisition: Adds scale and strengthens Celsius’ position in the female and functional beverage segments.

  • Innovation Pipeline: Expanded multipacks, new flavors, and CELSIUS HYDRATION all playing key roles in growing household penetration.

  • Operational Leverage: Big Beverage facility fully integrated, giving flexibility and room for future production expansion.


Capital Allocation

  • Debt & Liquidity: Following Alani Nu closing, Celsius carries ~$900M in debt. The company maintains a confident outlook on liquidity and leverage management.

  • No Dividend/Buyback: No mention of dividends or share repurchases in the quarter.


The Bottom Line


Celsius navigated a challenging Q1 marked by tough comps and soft U.S. sell-through, but the company’s fundamentals remain strong. Gross margin expansion, Alani Nu’s explosive growth, and rapid international traction position Celsius well for re-acceleration into Q2 and beyond. With innovation, expanding shelf space, and a balanced approach to promotions, Celsius is poised to maintain its leadership in the modern energy drink category while building out an even more diversified global portfolio.


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