Celsius Holdings Earnings: Triple-Digit Growth Fueled by Alani Nu and PepsiCo Partnership
- Hardik Shah
- 1 day ago
- 3 min read
TLDR
Revenue Strength: Sales soared 173% to $725M, driven by Alani Nu’s 114% retail sales surge and Celsius brand growth of 44%.
Margin Trends: Gross margin rose 530 bps to 51.3%, despite transition costs and tariffs.
Forward Outlook: PepsiCo partnership expansion, Alani Nu integration, and Rockstar optimization set stage for 2026 growth.
Business Overview
Celsius Holdings, Inc. (NASDAQ: CELH) is a functional beverage company with a fast-growing portfolio including CELSIUS, CELSIUS Essentials, Alani Nu, and Rockstar Energy. Its products target active and lifestyle-driven consumers, distributed primarily through PepsiCo’s network across retail, convenience, and e-commerce channels. The company now commands over 20% of the U.S. ready-to-drink (RTD) energy drink market, positioning it as a leading player in the premium functional beverage segment.
Celsius Earnings
Top-Line Growth:Revenue reached $725.1M, up 173% year-over-year, reflecting the acquisitions of Alani Nu and Rockstar Energy, alongside robust Celsius brand momentum. North America sales jumped 184% while international markets rose 24%, led by strength in the Nordics, U.K., and Australia.
Margins and Profitability:
Gross margin: 51.3% (+530 bps YoY), aided by favorable mix and scale efficiencies.
Adjusted EBITDA: $205.6M, up from $4.4M last year (28.4% margin).
Adjusted EPS: $0.42, compared with breakeven in Q3 2024.
Reported net income turned negative at $(61M) due to $247M in distributor termination costs tied to transitioning Alani Nu into PepsiCo’s network—fully funded by PepsiCo and cash-neutral to Celsius.
Operational Performance
CEO John Fieldly emphasized Celsius’ growing strategic influence within PepsiCo:
“We’ve become PepsiCo’s strategic energy captain, leading how energy shows up at retail—from the aisle to the checkout cooler,” said Fieldly. “Our brands are defining what a modern energy company looks like: inclusive, functional, and growing.”
Segment Highlights:
CELSIUS: +44% YoY revenue, +13% scanner growth; benefited from distribution gains and mix improvements.
Alani Nu: +114% retail sales, fueled by hit flavors like Witches Brew and the upcoming Winter Wonderland.
Rockstar Energy: Early integration phase with ~$18M Q3 contribution; medium-term plan to stabilize and refresh the brand.
Market Insights
Celsius’ 20.8% market share in U.S. RTD energy marks a 2.1-point gain YoY, underscoring portfolio power against slower legacy peers.Retailer enthusiasm remains high, with new end caps at Walgreens and CVS, and expanded shelf space at Walmart and Circle K.The total portfolio grew 31% in retail sales, nearly twice the category rate, as consumers continue shifting toward better-for-you, functional energy options.
Consumer Behavior & Sentiment
Seasonal and limited-time offerings remain key traffic drivers.
Witches Brew achieved record sell-through, demonstrating the pull of flavor-led innovation.
The Live Fit Go campaign lifted awareness and repeat purchase intent for the Celsius brand.Fieldly added that Celsius’ youth engagement via “Celsius University,” a student ambassador program with 200+ members, helps the company “stay culturally connected to consumers.”
Strategic Initiatives
PepsiCo Partnership Expansion: Celsius is now the U.S. strategic energy drink captain, overseeing SKU prioritization and planograms across PepsiCo’s DSD system.
M&A Integration: Smooth transitions for Alani Nu (acquired April 2025) and Rockstar Energy (acquired August 2025) expected to drive operational synergies by mid-2026.
Innovation Pipeline: Launch of Spritz 5 (limited edition) and upcoming flavor rotations signal continuous brand vitality.
Leadership Additions: New CMO Rishi Dang, International President Garrett Quigley, and CHRO Ghire Shivprasad strengthen execution depth.
Capital Allocation
Balance Sheet Strength: $806M cash, $861M debt; post-quarter actions reduced leverage by ~$200M and cut borrowing costs by 75 bps.
Cash-Neutral Transition: PepsiCo-funded Alani Nu distribution shift mitigates one-time P&L noise.
Future Focus: Maintain >50% gross margins, reinvest 20–25% of sales in brand building, and advance debt reduction initiatives.
The Bottom Line
Celsius Holdings’ Q3 results underscore its transformation into a scaled, multi-brand energy powerhouse. The company’s execution through major integrations, margin resilience above 50%, and PepsiCo alignment position it for sustained growth.
Investors should watch:
Q4 integration “noise” as Alani Nu transitions to PepsiCo’s network.
Tariff and freight pressure before margin normalization in early 2026.
Rockstar revitalization as a potential sleeper catalyst in the portfolio.
CFO Jarrod Langhans noted: “We’re balancing growth with profitability, capturing synergies, and setting up a stronger 2026.”
—
Comments