Celsius Holdings Posts 51.5% Gross Margin in Q2: Can It Hold Up?

Core Insights - Celsius Holdings, Inc. (CELH) demonstrated strong performance in Q2 2025, maintaining a gross margin of 51.5%, only a slight decrease of 50 basis points from the previous year despite the acquisition of Alani Nu, which has a lower margin profile [1][4] - The company's gross profit increased to $380.9 million on revenues of $739.3 million, compared to $209.1 million gross profit on $402.0 million revenues in the same period last year, driven by improved production yields, lower material and freight costs, and a better product mix [2][9] - Adjusted EBITDA more than doubled to $210.3 million, resulting in an adjusted EBITDA margin of 28.4%, up from 25% the previous year, reflecting strong execution and disciplined expense management [3][9] Financial Performance - The gross profit for Q2 2025 was $380.9 million, with revenues reaching $739.3 million, showcasing significant growth from the previous year's figures [2][9] - The adjusted EBITDA increased to $210.3 million, with the margin rising to 28.4%, indicating operational efficiency and scale benefits from the combined Celsius and Alani Nu portfolio [3][9] Market Outlook - Management indicated potential tightening of the margin environment in upcoming quarters due to rising aluminum prices and new tariff-related costs, posing a challenge to maintain margins in the low-50s range while investing in marketing and global growth [4] - Celsius Holdings' stock has surged 134.6% year to date, contrasting with an industry decline of 8.8%, highlighting strong market performance [7] Valuation Metrics - CELH trades at a forward price-to-earnings ratio of 44.47, significantly higher than the industry average of 15.37, indicating a premium valuation [11] - The Zacks Consensus Estimate for CELH's earnings suggests year-over-year growth of 60% for 2025 and 29.7% for 2026, reflecting positive growth expectations [14]