Celsius Holdings, Inc. Q2 FY2025 earnings call

Quarterly Performance

• Q2 was a strong quarter with 29% retail sales growth and 31% volume increase, led by Celsius and Alani Nu brands.

Innovation

• Both brands delivered meaningful innovation in Q2. Alani Nu had Sherbet Swirl, Cotton Candy, Witch's Brew, and Pumpkin Cream LTOs. Celsius released Pink Lemonade and Dragon Fruit Lime fizz-free flavors.

Retail and Distribution

• Celsius Holdings achieved $4 billion in past 52-week retail sales. Tracked U.S. channels saw RTD energy category growth, with Celsius and Alani Nu leading share gains. E-commerce, foodservice, and international (27% y/y growth) were strong.

Branding and Marketing

• Launched LIVE. FIT. GO. campaign for Celsius. Alani Nu's products like Cotton Candy set sales records and new items generated buzz.

For the 13 weeks ended June 29, 2025, Celsius Holdings retail sales grew 29% and volume increased 31%. Revenue for the second quarter ending June 30, 2025 was $739.3 million, up 84% year-over-year. The Celsius brand contributed $438.1 million in revenue, with unit sales growing 6.1% and dollar sales by 3% in Q2. The Alani Nu brand had revenue of $301.2 million, with dollar sales rising 129% and share up 3.2 points year-over-year. Consolidated gross margin was 51.5%, down 50 basis points year-over-year but supported by favorable material costs, improved production yields, etc. Year-to-date, revenue was $1.07 billion, up 41% year-over-year, with North American revenue at $1.02 billion and international revenue at $48 million, up 33%.

Margin Expectations

• Anticipate margin pressure from higher input costs in the back half of 2025, with tariffs expected to impact margin in Q3 and Q4.

Growth Projections

• Expect continued growth driven by innovation, brand marketing, and distribution. Alani Nu aims to sustain strong growth with new LTOs and core SKUs. Celsius focuses on e-com, foodservice, and brand campaigns.

Synergies

• Expect $50 million run rate cost synergies over 2 years post-Alani Nu acquisition.

Input Costs

• Higher input costs, including tariffs, may impact gross margin.

Market Fluctuations

• Deviations from sell-in to sell-out, timing of LTOs, and promotional fluctuations can affect performance.

Competition

• Intense competition in the energy beverage category could impact market share and growth.

Q: Color on gross margin drivers and path forward?

A: Jarrod mentioned Alani Nu LTOs, mix, freight and raw material savings; Celsius saw raw material savings and channel mix. Tariffs expected to impact Q3/Q4 margin.

Q: Alani shipments vs takeaway and Witch's Brew expectations?

A: Shipping and scan data may deviate, but close; Witch's Brew launched, with Pumpkin Cream variety pack and winter additions planned.

Q: International expansion plans?

A: Focus on existing markets in back half of 2025, with teams and organization built for growth; 27% y/y international revenue growth seen.

Q: Costco channel revenue and progression?

A: Promotional activity at Costco drove uplift, with optimization of promotions and timing for back half.

Q: Celsius brand acceleration drivers and innovation?

A: Marketing campaign LIVE. FIT. GO., channel strategy changes, and new flavors like Pink Lemonade and Dragon Fruit Lime; first LTO for Celsius in back half.

Q: Alani pacing and household penetration?

A: Alani faces tougher comps but expects solid growth with LTOs; Celsius and Alani have 43% and 22% household penetration, with growth from new consumers and increased frequency.

Q: Third quarter unfolding and promo puts/takes?

A: Timing and sequencing of promotions, including Witch's Brew move forward; no forward-looking info provided beyond modeling.