Results

Celsius Holdings Inc.

11/07/2025 | Press release | Distributed by Public on 11/07/2025 08:23

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.
When used in this Quarterly Report,unless otherwise indicated, the terms the "Company," "Celsius," "we," "us" and "our" refer to
Celsius Holdings, Inc. and its consolidated subsidiaries.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report contains forward-looking statements that are based on the current expectations of our Company and management
about future events within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act, and Section 21E of the Exchange Act, and are made in reliance of the safe harbor protections provided thereunder. While
we have specifically identified certain information as being forward-looking in the context of its presentation, we caution you that all
statements contained in this Quarterly Report that are not clearly historical in nature are forward looking. They inherently involve risks
and uncertainties that could cause actual results to differ materially from those predicted in any such forward-looking statement. Such
risks and uncertainties include, but are not limited to: our ability to successfully integrate Alani Nuand Rockstar; the strategic
investment by and long term partnership with Pepsi; anticipated financial performance; management's plans and objectives for
international expansion and future operations globally; the successful development, commercialization, and timing of new products;
business prospects; outcomes of regulatory proceedings; market conditions; the current and future market size for existing or new
products; and any stated or implied outcomes with regards to the foregoing.
Without limiting the generality of the preceding sentences, any time we use the words "expects," "intends," "will," "anticipates,"
"believes," "confident," "continue," "propose," "seeks," "could," "may," "should," "estimates," "forecasts," "might," "goals,"
"objectives," "targets," "planned," "projects," and, in each case, their negative or other various or comparable terminology, and similar
expressions, we intend to clearly express that the information deals with possible future events and is forward-looking in nature.
However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Particular
uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include,
withoutlimitation:
•Our ability to accurately estimate the termination fees payable to former distributors in connection with the A&R U.S.
Distribution Agreement;
•Our ability to successfully execute our responsibilities under our Captaincy with Pepsi;
•The potential for brand dilution or cannibalization within Celsius's brand portfolio;
•The increased ownership stake and additional board representation by Pepsimay allow it to exert greater influence over
our strategic and governance decisions;
•Our ability to successfully integrate Alani Nu, Rockstar or other businesses that we may acquire;
•Our ability to achieve the benefits that we expect to realize as a result of the Alani Nu Acquisition, Rockstar Acquisition
or other businesses that we may acquire;
•The potential negativeimpact that we could realize as a result of the Alani Nu Acquisition, Rockstar Acquisitionor other
businesses that we may acquire;
•Liabilities of Alani Nu, Rockstar or other businesses that we may acquire that are not known to us;
•Our ability to maintain a strong relationship with Pepsior any of our other distributors;
•The impact of the consolidation of retailers, wholesalers and distributors in the industry;
•Our reliance on key distributor partnerships;
•Our ability to maintain strong relationships with co-packers to manufacture our products;
•Our ability to maintain strong relationships with our customers;
•Our failure to accurately estimate demand for our products;
•The impact of increases in cost or shortages of raw materials or increases in costs of co-packing;
•Our ability to successfully achieve the benefits of our acquisition of Big Beverages, a co-packer;
•Our ability to successfully estimate and/or generate demand through the use of third-parties, including celebrities, social
media influencers, and others, may expose us to risk of negative publicity, litigation, and/or regulatory enforcement
action;
•The impact of additional labeling or warning requirements or limitations on the marketing or sale of our products;
•Our ability to successfully expand outside of the U.S.and the impact of U.S.and international laws, including export and
import controls and other risk exposure;
•Our ability to successfully complete or manage strategic transactions, successfully integrate and manage our acquired
businesses, brands or bottling operations, or successfully realize a significant portion of the anticipated benefits of our
joint ventures or strategic relationships;
•Our ability to protect our brand, trademarks, proprietary rights, and our other intellectual property;
•The impact of internal and external cyber-security threats and breaches;
•Our ability to comply with data privacy and personal data protection laws;
•Our ability to effectively manage future growth;
•The impact of global or regional catastrophic events on our operations and ability to grow;
•The impact of any actions by the U.S.Food and Drug Administration regarding the manufacture, composition/ingredients,
packaging, marketing/labeling, storage, transportation, and/or distribution of our products;
•The impact of any actions by the Federal Trade Commission on our advertising;
•Our ability to effectively compete in the functional beverage product industry and the strength of such industry;
•The impact of changes in consumer product and shopping preferences;
•The impact of changes in government regulation and our ability to comply with existing regulation concerning energy
drinks;
•Compliance with California's climate disclosure laws may subject us to increased regulatory scrutiny, potential penalties
and legal risks, which could adversely affect the our operations, financial condition and reputation;
•Other statements regarding our future operations, financial condition, prospects and business strategies; and
•Those factors contained in this Quarterly Report under the heading, "Risk Factors".
Forward-looking statements and information involve risks, uncertainties and other factors that could cause actual results to differ
materially from those expressed or implied in, or reasonably inferred from, such statements, including without limitation, the risks and
uncertainties disclosed or referenced in Part I, Item 1A Risk Factorsof our Annual Report. Therefore, caution should be taken not to
place undue reliance on any such forward-looking statements. Much of the information in this Quarterly Report that looks toward future
performance is based on various factors and important assumptions about future events that may or may not actually occur. As a result,
our operations and financial results in the future could differ materially and substantially from those we have discussed in the forward-
looking statements included in this Quarterly Report. We assume no obligation (and specifically disclaim any such obligation) to
publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as
required by law.
Our Business
Executive-Level Overview
Celsius is a functional energy drink company operating in the U.S.and internationally. We currently market three brands within our
portfolio: CELSIUS®, our flagship functional energy brand; Alani Nu, a wellness-focused energy and nutritional product brand acquired
in April 2025; and Rockstar, a classic energy drink with a rich brand heritage acquired in August 2025. Together, these brands position
us to serve a broad and growing base of consumers seeking functional performance, better-for-you formulations and active lifestyle
support.
Celsius is available in two convenient forms: ready-to-drink and an on-the-go powder form. Additionally, we offer our CELSIUS
ESSENTIALS™line, featuring 16-ounce cans enriched with aminos. In 2025, we introduced CELSIUS®Hydration, a line of non-
caffeinated, zero-sugar hydration powders, featuring electrolytes in a variety of fruit-forward flavors. Our product range is widely
available across the U.S.and in select territories in Canada in various retail outlets, including grocery stores, natural product stores,
convenience stores, fitness centers, mass retailers, vitamin specialty stores and through e-commerce platforms. Moreover, our products
are offered in select markets in Europe, the Middle East and the Asia-Pacific region as we have continued to expand our global presence.
Alani Nu expands our reach beyond energy into wellness and nutrition with a product range spanning energy drinks, pre-workout
formulas, protein beverages and supplements. With a strong following among Gen Z and female consumers, Alani Nuadds depth to our
innovation pipeline and provides meaningful opportunities for global expansion.
Through our addition of Rockstar, we also participate in the classic energy segment, offering beverages in both full-sugar and zero-sugar
formats. Rockstar complements our portfolio with its established brand equity and appeal to traditional energy drink consumers.
Collectively, our brands position Celsius to meet the diverse preferences of consumers seeking functional performance, wellness benefits
and better-for-you energy options.
We engage in various aspects of developing, manufacturing, processing, marketing, selling, and distributing Celsius, Alani Nuand
Rockstarproducts. Our operational model strategically relies primarily on co-packers for the manufacture and supply of our products,
leveraging their specialized expertise and scalable production capabilities. Additionally, we utilize our in-house manufacturing facility to
complement our strategic use of co-packers. This approach allows us to maintain flexibility in responding to market demands and to
focus our resources on innovation, marketing, and expanding our distribution channels. We continuously assess and work to optimize our
supply chain to ensure quality, consistency and timely delivery to our customers.
On August 28, 2025, building on the long-term distribution agreement originally established with Pepsiin August 2022, we entered into
a series of transactions that expanded our strategic partnership. These included (i) the Rockstar Acquisition, (ii) the issuance of Series B
Preferred Stock and amendment of the existing Series A Preferred Stock, and (iii) the execution of the A&R U.S. Distribution
Agreement, which designates Pepsias the primary distributor of our Alani Nuand Rockstarproducts in the U.S.(excluding Puerto Rico
and the U.S. Virgin Islands) and Canada. Under the enhanced commercial arrangement, Pepsihas agreed to use its commercially
reasonable efforts to sell and distribute our full portfolio of products in accordance with the Captaincy.
Impact of Tariffs and MacroeconomicTrends
The imposition of tariffs including U.S.tariffs imposed or threatened to be imposed on other countries and any tariffsimposed by such
countries have impactedand could continue to impact our supply chain, including the cost of certain raw materials and packaging. In
addition, any supply chain constraints, inflationary impacts or reduced consumer demand for our products as a result of such tariffs or
ongoing macroeconomic uncertainty could impact our results. The rapidly changing nature of global trade policies and tariff regulations
introduces uncertainty, making it difficult to reasonably estimate potential future impacts from such policies and regulations.
Impact of One Big Beautiful Bill Act
On July 4, 2025, the OBBBA was signed into law in the U.S.The legislation introduced a wide array of changes to the U.S. corporate tax
system, including permanent extensions of certain provisions of the Tax Cuts and Jobs Act of 2017 and substantial modifications to the
international tax regime applicable to U.S.multinational corporations. Key international provisions include changes to the Global
Intangible Low-Taxed Income regime, the treatment of foreign tax credits, and interest expense limitations under Section 163(j). While
certain provisions take effect in 2025, others are phased in over subsequent years. The OBBBAdid not materially impact our estimated
annual effective tax rate as of September 30, 2025.
Interest Rate Risk
Fluctuations in market interest rates may cause future cash flows to vary. Interest rates are highly sensitive to many factors, including
fiscal and monetary policies and domestic and international economic and political considerations, as well as other factors beyond our
control. This can affect both our borrowing costs and the fair value of our debt obligations. We are subject to interest rate risk in
connection with the term loan facility, which bears interest at variable rates based on benchmark reference rates plus a fixed margin. For
additional information see Note 6. Debtin the notes to the condensed consolidated financial statements included in this Quarterly Report.
Results of Operations
Three months ended September 30, 2025compared to three months ended September 30, 2024
Revenue
For the three months ended September 30, 2025, revenue was approximately $725.1 million, an increaseof $459.4 million, or 172.9%,
from $265.7 millionfor the three months ended September 30, 2024.
For the three months ended September 30, 2025, revenue in North America increased by $454.9 million, or 184.1%, compared to the
three months ended September 30, 2024. The increase was primarily attributable to the Alani Nu Acquisition, which contributed
approximately $332.0 millionof revenue, reflecting the impact of limited-time offer programs and an overall strong organic
performance. In addition, higher Celsius brand revenue reflected continued distribution gains and improved scanner trends. Celsius brand
results also benefited from lower revenue comparables in the third quarter of 2024, which was adversely impacted by inventory timing
and reduced sell-in to our largest distributor; however, this favorable comparison was tempered as distributor inventory levels, while
higher than the prior-year period, remained below historical levels. Gains for the Celsius brand were partially offset by the timing of
promotional expenses during the quarter, which negatively impacted revenue.
Europeanrevenue for the three months ended September 30, 2025was approximately $17.7 million, representing an increaseof $1.4
million, or 8.9%, from the three months ended September 30, 2024. Asia-Pacific revenue generated approximately $3.5 millionfor the
three months ended September 30, 2025, with other international markets contributing an additional $1.9 millionin revenue for the three
months ended September 30, 2025. The international markets continued to expand during the quarter, driven by recent market launches
and continued investment in distribution, marketing, and strategic partnerships to support long-term growth.
The following table sets forth the amount of revenue by geographical location for the three months ended September 30, 2025and
September 30, 2024:
Three Months Ended September 30,
(Amounts in thousands)
2025
2024
North America
$701,990
$247,125
Europe
17,691
16,243
Asia-Pacific
3,518
Other
1,907
1,786
Revenue
$725,106
$265,748
Gross Profit
For the three months ended September 30, 2025, gross profit increased by $250.1 millionto $372.3 million, an increaseof 204.6%from
$122.2 millionfor the three months ended September 30, 2024. This increase was driven primarily by the Alani Nu Acquisition. Gross
profit margin was 51.3%for the three months ended September 30, 2025and 46.0%for the three months ended September 30, 2024.
This margin improvement was primarily driven by lower net portfolio promotional spend, pack mix, favorable channel mix, scale
benefits on raw materials from higher volume, negative impacts from tariffs and the impact of comparatively lower margin contributions
from Alani Nu and Rockstar.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three months ended September 30, 2025were $205.6 million, an increaseof
$80.2 million, or 64.0%, from $125.4 millionfor the three months ended September 30, 2024.
The change in selling, general and administrative expenses included:
An increase of $47.9 millionin marketing and selling expense. This increase was primarily due to:
•$19.3 millionattributable to Alani Nu, primarily related to sales and marketing employee costs, marketing investments to
support brand growth, and storage and distribution expenses associated with the brand's commercial expansion;
•$17.8 millionin marketing expenses, primarily attributable to the ongoing "Live. Fit. Go." campaign, our largest
marketing initiative to date, designed to support long-term brand development;
•$4.8 millionin employee-related costs, primarily reflecting the expansion of our workforce through continued investment
in sales and marketing personnel to support our strategic growth initiatives; and
•$6.0 millionin other selling expenses, including storage and distribution costs associated with expanded sales volume and
channel growth.
An increase of $32.3 millionin administrative expenses. This increase was primarily due to:
•$15.3 millionin acquisition and integration-related costs, primarily consisting of legal and professional service fees
incurred in connection with the RockstarAcquisition and Alani NuAcquisition and their subsequent integration;
•$12.5 millionattributable to Alani Nu, primarily related to administrative employee costs, amortization of intangible
assets, and other general administrative expenses; and
•$4.5 millionin other administrative expenses, including administrative employee related costs, amortization of
intangibles, and stock-based compensation.
Distributor Termination Fees
In addition to the selling, general and administrative expense changes described above, we also incurred termination fees of $246.7
millionfor the three months ended September 30, 2025, due to the termination of certain former Alani Nu distributors. There were no
such expenses in the comparable period in 2024.
Other (Expense) Income
Total other expense for the three months ended September 30, 2025was $8.0 millioncompared to other income of $11.4 millionfor the
three months ended September 30, 2024,reflecting an unfavorable change of $19.4 million. This increase in other expense was primarily
driven by $18.2 millionof interest expense related to our outstanding debt, whereas no such debt existed in the prior-year interim period.
Additionally, interest income decreased compared to the prior period, partially offset by income recognized in connection with Rockstar.
Provision for Income Taxes
In general, the Company uses an estimated annual effective tax rate, which is based on expected annual income and statutory tax rates in
the various jurisdictions in which it operates, to determine its quarterly provision for income taxes. Certain discrete items are recognized
separately in the quarter in which they occur and may cause variability in the effective tax rate from quarter to quarter. The Company's
effective tax rate may change from period to period due to recurring and nonrecurring factors, including the geographic mix of earnings,
enacted tax legislation, and state and local income taxes.
For the three months ended September 30, 2025, the Company's effective tax rate was 30.7%, reflecting a tax benefit, compared to
22.3%, reflecting a tax expense, for the same period in 2024. The higher effective tax rate for the current quarter, which contributed to a
greater income tax benefit, primarily reflects the favorable impact of distributor termination expenses on state income taxes and higher
tax benefits from foreign operations included in the Company's forecasted annual effective tax rate, partially offset by income tax
expense associated with stock-based compensation shortfalls and other non-deductible items. The current period's effective tax rate
exceeded the U.S. federal statutory rate of 21.0%, primarily due to the aforementioned effects of distributor termination expenses and
state income taxes on the Company's forecasted annual effective tax rate. In the prior-year quarter, the effective tax rate exceeded the
statutory rate primarily due to disallowed stock-based compensation expense and state income taxes.
We are subject to U.S.federal income tax as well as income tax in multiple state and foreign jurisdictions. Our tax returns for tax years
beginning 2020 remain subject to potential examination by the taxing authorities.
Net (Loss) Income Attributable to Common Stockholders
Net lossattributed to common stockholders for the three months ended September 30, 2025was $70.7 million, representing basic loss
per share of $(0.27)based on a basic weighted average of 257.8 millionshares outstanding. In comparison, for the three months ended
September 30, 2024our net lossattributed to common stockholders was $0.6 million, representing basic loss per share of $(0.00)based
on a weighted average of 233.7 millionshares outstanding. Diluted loss per share was $(0.27)and $(0.00)for the three months ended
September 30, 2025and 2024, respectively. The increase in net loss attributable to common stockholders for the three months ended
September 30, 2025was primarily driven by distributor termination fees incurred in connection with transitioning Alani Nu to the Pepsi
distribution network, higher selling, general and administrative expenses and interest expense related to the debt issued in the second
quarter of 2025. These unfavorable factors were partially offset by positive net income generated by Alani Nu. The results for the three
months ended September 30, 2025also benefited from comparison to a softer prior-year period, when Pepsi's inventory optimization
negatively impacted our results.
Nine months ended September 30, 2025compared to Nine months ended September 30, 2024
Revenue
For the ninemonths ended September 30, 2025, revenue was approximately $1,793.6 million, an increaseof $770.2 million, or 75.3%,
from $1,023.4 millionfor the ninemonths ended September 30, 2024.
For the ninemonths ended September 30, 2025, revenue in North America increased by $754.0 million, or 77.8%, compared to the nine
months ended September 30, 2024. The increase was driven primarily by the Alani Nu Acquisition, which contributed approximately
$633.2 millionfollowing the acquisition. The remainder of the growth reflected higher revenue for the Celsius brand, which increased
12.5%compared to the prior-year period, from expanded distribution, new product innovation and broader brand awareness. The year to
date comparison for the Celsius brand also benefited from lower revenue in the third quarter of 2024, when Pepsi's inventory
optimization reduced sell-in while promotional programs remained active.
European revenues for the ninemonths ended September 30, 2025were approximately $54.7 million, representing an increaseof $7.6
million, or 16.1%, from the ninemonths ended September 30, 2024. Asia-Pacific revenues generated approximately $10.1 millionfor the
ninemonths ended September 30, 2025, with other international markets contributing an additional $5.9 millionin revenue for the nine
months ended September 30, 2025. The international markets continued to expand during the quarter, driven by recent market launches
and continued investment in distribution, marketing, and strategic partnerships to support long-term growth.
The following table sets forth the amount of revenues by geographical location for the ninemonths ended September 30, 2025and
September 30, 2024:
Nine Months Ended September 30,
(Amounts in thousands)
2025
2024
North America
$1,722,983
$968,988
Europe
54,651
47,069
Asia-Pacific
10,143
2,129
Other
5,864
5,247
Revenue
$1,793,641
$1,023,433
Gross Profit
For the ninemonths ended September 30, 2025, gross profit increased by $412.0 millionto $925.5 million, an increase of 80.2%, from
$513.5 millionfor the ninemonths ended September 30, 2024. Gross profit margin increased to 51.6%for the ninemonths ended
September 30, 2025from 50.2%for the ninemonths ended September 30, 2024. This gross profit margin increase was primarily driven
by lower net portfolio promotional spend, favorable channel, price and pack mix which were partially offset by the impact of
comparatively lower margin contributions from Alani Nu and Rockstar and inventory valuation step-up adjustments following our
acquisitions.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the ninemonths ended September 30, 2025were $563.8 million, an increaseof
$224.5 million, or 66.2%, from $339.3 millionfor the ninemonths ended September 30, 2024.
The change in selling, general and administrative expenses included:
An increase of $110.9 millionin administrative expenses. This increase was primarily due to:
•$40.4 millionin acquisition and integration-related costs, primarily consisting of legal and professional service fees
incurred in connection with the Alani Nu Acquisition and the Rockstar Acquisition and the integration of those businesses
into our operations;
•$28.3 millionattributable to Alani Nu, primarily related to administrative employee costs, amortization of intangible
assets, and other general administrative expenses;
•$16.4 millionin other administrative expenses, including depreciation, amortization of intangibles, and stock-based
compensation;
•$13.8 milliondue to the remeasurement of contingent consideration related to the Alani Nu Acquisition, reflecting
stronger-than-expected revenue performance and an upward revision to forecasted results; and
•$12.0 millionin general administrative costs, including legal, consulting, and other professional service expenses.
An increase of $113.6 millionin marketing and sales expenses. This increase was primarily due to:
•$49.0 millionattributable to Alani Nu, primarily related to sales and marketing employee costs, marketing investments to
support brand growth, and storage and distribution expenses associated with the brand's commercial expansion;
•$38.1 millionin marketing expense, reflecting continued execution of the "Live. Fit. Go." campaign, which launched
earlier in the year and remained our largest marketing initiative to date;
•$15.9 millionin employee-related costs, primarily reflecting the expansion of our workforce through continued
investment in sales and marketing personnel to support our strategic growth initiatives; and
•$10.6 millionin other selling expenses, including storage and distribution costs associated with expanded sales volume
and channel growth.
Distributor Termination Fees
In addition to the selling, general and administrative expense changes discussed above, we also incurred termination fees of $246.7
millionfor the ninemonths ended September 30, 2025due to the termination of certain former Alani Nu distributors. There were no
such expenses in the comparable period in 2024.
Other (Expense) Income
Total other expense was $12.6 millionfor the ninemonths ended September 30, 2025, compared to other income of $31.0 millionfor the
ninemonths ended September 30, 2024, reflecting an unfavorable change of $43.6 million. This change was primarily driven by
$36.3 millionof interest expense recognized in 2025 related to our outstanding debt, whereas no such debt existed in the prior-year
period. Additionally, interest income decreased compared to the prior period, partially offset by income recognized in connection with
Rockstar.
Provision for Income Taxes
For the ninemonths ended September 30, 2025, our effective tax rate was 18.7%, as compared to 20.1%for the same period in 2024.
The decrease was primarily driven by deferred state income tax benefits arising from distributor termination expenses, combined with
favorable tax benefits from foreign operations. These factors were partially offset by income tax expense related to stock award shortfalls
and non-deductible expenses associated with the issuance of stock-based compensation. The effective tax rate for the current period was
below the U.S. federal statutory rate of 21.0%, primarily due to the deferred state income tax benefits recognized in connection with
distributor termination expenses, as well as favorable foreign tax impacts. The prior-year effective tax rate was also below the statutory
rate, primarily reflecting windfall benefits from stock-based compensation, partially offset by disallowed stock-based compensation
expenses and state income taxes.
We are subject to U.S.federal income tax as well as income tax in multiple state and foreign jurisdictions. Our tax returns for tax years
beginning 2020 remain subject to potential examination by the taxing authorities.
Net Income Attributable to Common Stockholders
Net incomeattributed to common stockholders for the ninemonths ended September 30, 2025was $54.7 million, representing basic
earnings per share of $0.22based on a basic weighted average of 250.3 millionshares outstanding. In comparison, for the ninemonths
ended September 30, 2024our net incomeattributed to common stockholders was $131.0 million, representing basic earnings per share
of $0.56based on a weighted average of 233.2 millionshares outstanding. Diluted earnings per share was $0.22and $0.55for the nine
months ended September 30, 2025and 2024, respectively. The decrease in net income attributable to common stockholders for the nine
months ended September 30, 2025was primarily driven by distributor termination fees incurred in connection with transitioning Alani
Nu distribution to the Pepsi distribution network, higher selling, general and administrative expenses, and interest expense related to
newly incurred debt. These unfavorable factors were offset by positive net income from the Alani Nu Acquisition andinterest income
from our money market accounts.
Liquidity and Capital Resources
General
As of September 30, 2025, we had unrestricted cash and cash equivalents of approximately $806.0 million, restricted cash of $126.5
millionand net working capital of $912.6 million.
Our primary sources of liquidity are cash flows from operations and our existing cash balances. We believe that cash available from
operations, together with our $100.0 million Revolving Credit Facility, will be sufficient for our working capital needs, including
purchase commitments for raw materials and inventory, increases in accounts receivable and other assets, and purchases of capital assets
and equipment for the next twelve months and beyond.
Purchases of inventories, increases in accounts receivable and other assets, equipment purchases (including coolers), advances to certain
co-packers and distributors, and payments of accounts payable and income taxes are expected to remain our principal recurring uses of
cash and material cash requirements.
On April 1, 2025, we completed the Alani Nu Acquisition for total consideration comprising (i) $1,275.0 million in cash paid at closing,
subject to adjustment as set forth in the Membership Interest Purchase Agreement, (ii) an aggregate of 22,451,224shares of our common
stock, and (iii) up to $25.0 million in additional cash consideration, payable only if revenue from Alani Nu's products meets or exceeds
an agreed-upon target for 2025. Any such contingent consideration is expected to be paid in 2026. For the nine months ended September
30, 2025, we recorded a measurement period adjustment primarily related to property, plant and equipment for $2.9 million, and the total
cash consideration paid, net of cash received, is reflected in our cash flows from investing activities. For additional information, see Note
5. Acquisitionsin the notes to the condensed consolidated financial statements.
In connection with our Alani Nu Acquisition, we, together with certain of our subsidiaries as guarantors, the lenders and issuing banks
from time to time party thereto and UBS AG, Stamford Branch, as administrative agent and collateral agent, entered into the secured
Credit Agreement. The Credit Agreementprovides for the Term Loan Facilityin an aggregate principal amount of up to $900.0 million,
which was fully drawn to fund a portion of the purchase price for Alani Nu, and a Revolving Credit Facilityin an aggregate principal
amount of up to $100.0 million, which may include the issuance of letters of credit in a stated face amount of up to, but not exceeding,
$50.0 million. The Term Loan Facilitymatures on April 1, 2032, and the Revolving Credit Facilitymatures on April 1, 2030. For
additional information see Note 6. Debtin the notes to the condensed consolidated financial statements.
On October 2, 2025, subsequent to the end of the reporting period, Celsius Holdings, Inc. and Celsius, Inc. entered into the First
Refinancing Amendment. This amendment reduced the applicable interest rates under both the Term Loan Facility and the Revolving
Credit Facility by 0.75%. All other material terms of the Credit Agreement remained unchanged. In connection with the First
Refinancing Amendment, we repaid the remaining outstanding balance of our $900.0 millionterm loan facility using a combination of
approximately $198.8 millionof cash on hand and the proceeds from a new $700.0 millionterm loan under the Term Loan Facility,
which bears interest at the reduced interest rate provided in the First Refinancing Amendment. No prepayment penalties were incurred in
connection with the refinancing.
Cash flows for the ninemonths ended September 30, 2025and 2024
Cash flows provided by operating activities
Cash flows provided byoperating activities totaled $478.9 millionfor the ninemonths ended September 30, 2025, which compares to
$187.2 millioncash provided byoperating activities for the ninemonths ended September 30, 2024. The $291.7 million increasewas
primarily driven by strong operational performance, including the addition of net income and revenue from Alani Nu and higher
accounts payable and accrued liabilities resulting from the timing of payments. The increase also reflects cash received from Pepsi
related to the termination of existing Alani Nu distributors under the A&R U.S. Distribution Agreement, which had not yet been paid to
terminated distributors as of September 30, 2025.
Cash flows used in investing activities
Cash flows used ininvesting activities totaled $1,278.7 millionfor the ninemonths ended September 30, 2025, compared to cash used in
investing activities of $21.0 millionfor the ninemonths ended September 30, 2024. The $1,257.7 million increasewas primarily
attributable to cash paid as part of the Alani Nu Acquisitionas well as increased capital expenditures related to investment in machinery
and equipment at our wholly owned manufacturing facility, Big Beverages. For more information,see Note 5. Acquisitions in the notes
to the condensed consolidated financial statements.
Cash flows provided by financing activities
Cash flows provided byfinancing activities totaled $839.9 millionfor the ninemonths ended September 30, 2025, compared to $18.5
millioncash flows used infinancing activities for the same period in 2024, representing an $858.4 million increase. The increasewas
primarily driven by debt incurred in connection with the Alani Nu Acquisitionwhereas no such debt existed in prior year. For more
information, see Note 6. Debt in the notes to the condensed consolidated financial statements.
Off Balance Sheet Arrangements
As of September 30, 2025and December 31, 2024, we had no off balance sheet arrangements.
Critical Accounting Policies and Estimates
Our condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United
States of America, which requires us to make estimates and assumptions that affect the reported amounts in our condensed consolidated
financial statements. Critical accounting estimates are those that management believes are the most important to the portrayal of our
financial condition and results and require the most difficult, subjective or complex judgments, often as a result of the need to make
estimates about the effect of matters that are inherently uncertain and that have had, or are reasonably likely to have, a material impact on
our financial condition or results of operations. Judgments and uncertainties may result in materially different amounts being reported
under different conditions or using different assumptions. Except for those described below, there have been no material changes to our
critical accounting policies or estimates from those described in Part II, Item 7, Management's Discussion and Analysis of Financial
Condition and Results of Operationsincluded in our Annual Report.
Business Combinations
We account for acquisitions using the acquisition method, under which, upon obtaining control, we recognize each identifiable asset
acquired and liability assumed at its acquisition date fair value. The determination of those fair values requires significant judgment and
the use of valuation techniques when observable market inputs are unavailable. We value intangible assets using models such as the
income approach (relief-from-royalty model) and other cost-based techniques. Key unobservable inputs include but are not limited to
forecasted revenue growth rates, discount rates, royalty rates and estimated useful lives. We engage third-party valuation specialists to
review these critical assumptions and prepare detailed fair value analyses for material acquisitions.
Any excess of the purchase consideration over the fair values of identifiable net assets is recorded as goodwill. During the measurement
period, up to one year from the acquisition date, significant provisional amounts are adjusted with a corresponding offset to goodwill.
Preferred Stock
On the Closing Date of the Pepsi Transactions, we measured the fair value of our Preferred Stock using a Monte Carlo simulation
because these instruments include path dependent features, multiple redemption and conversion decision dates, an automatic conversion
and a 10-day VWAP test. The model used observable market data at the measurement date, such as the price of our common stock. Since
the valuation required significant unobservable inputs, including the probability of meeting certain triggering conditions, equity volatility
and discount rates for redemption cash flows, the measurement is classified within Level 3 of the fair value hierarchy.
We engaged third-party valuation specialists to review these critical assumptions and prepare detailed fair value analyses for our
Preferred Stock. Key assumptions included the probability of meeting triggering conditions, equity volatility, the time horizon to
decision dates and discount rates. These estimates were judgmental and could materially affect results.
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