Financial Data and Key Metrics Changes - Total organic sales increased by 2% in Q3 2025, marking five consecutive quarters of volume-led growth [5][22] - Adjusted gross profit margin decreased by 120 basis points due to higher commodity costs and tariffs [24][25] - Adjusted earnings per share for Q3 2025 was $0.85, a 2% increase compared to the previous year [27][36] Business Line Data and Key Metrics Changes - Consumer segment organic sales grew by 3%, driven primarily by volume and mix, with minimal pricing benefit [22] - Flavor Solutions segment organic sales increased by 1%, with a 2% price contribution but flat volume [23] - In the Americas, Flavor Solutions' organic sales rose by 1%, reflecting a strong performance with faster-growing flavor customers [23] Market Data and Key Metrics Changes - Consumer organic sales in the Asia-Pacific region decreased by 1%, primarily due to softness in the food service business in China [22] - EMEA consumer organic sales grew by 4%, driven by a 1% increase in volume and a 3% increase in price [22] - QSR trends in EMEA began to stabilize, marking an improvement relative to recent periods [6] Company Strategy and Development Direction - The company remains committed to delivering volume growth and investing in brands, technology, and digital transformation [9][10] - Strategic pricing and ongoing innovation are key components of the company's approach to mitigate rising costs [10][30] - The company is focused on maintaining a balanced use of cash, funding growth investments while returning cash to shareholders [28] Management's Comments on Operating Environment and Future Outlook - The management noted that the consumer environment remains challenging, with low to middle-income households adapting their shopping behaviors [7] - There is confidence in a gradual recovery in the China consumer market for 2025 [5][15] - The company expects to offset most of the tariff impact through productivity savings and alternative sourcing [30] Other Important Information - The company revised its profitability outlook to the low end of the range due to rising commodity costs and tariffs [10][31] - Total gross annualized tariff exposure is now approximately $140 million, up from $90 million previously [29] - The company plans to implement targeted tariff pricing and monitor elasticities to inform future plans [30] Q&A Session Summary Question: Visibility on positive volume outcome in the consumer segment - Management acknowledged a deceleration in volume growth but emphasized strong sales growth driven by volume and innovation [41][42] Question: Mitigation opportunities for further inflation and tariffs in 2026 - Management indicated that it is early to predict the exact impact of tariffs for 2026 but expressed confidence in current mitigation plans [46][48] Question: Clarification on cost inflation guidance - Management explained that increased commodity costs and new tariffs were significant factors in the revised guidance for 2025 [50][52] Question: Expectations on gross margin for Q4 - Management confirmed that gross margin is expected to improve in Q4 as mitigation efforts take effect [53][54] Question: Comments on reformulation activities and private label growth - Management noted increased reformulation activity among high-growth innovators and private label customers, driven by consumer demand for healthier options [66][68] Question: Acquisition strategy and interest in large companies - Management reiterated a focus on both bolt-on and transformative opportunities, emphasizing interest in flavor-related categories [70][72]

Financial Data and Key Metrics Changes - For Q1 2025, revenue totaled $329.3 million, a 7% decline compared to $355.7 million in the prior year period, attributed to slowed velocity, timing of distributor incentive programs, and increased retail promotions [19][20] - Adjusted EBITDA for Q1 2025 was $69.7 million with a margin of 21.2%, down from $88 million and a 24.7% margin in Q1 2024 [20] - Gross margin expanded by 110 basis points to 52.3%, supported by sourcing efficiencies for raw and packaging materials [9][20] - Net income attributable to common shareholders was $34.4 million or $0.15 per diluted share, with non-GAAP adjusted diluted EPS at $0.18 compared to $0.27 in the prior year [20][21] Business Line Data and Key Metrics Changes - International revenue grew 41% to $22.8 million, indicating strong organic growth in legacy and new markets [10] - The Celsius brand held a 10.9% dollar share in tracked channels for the 13 weeks ending March 30, 2025, with new retail sales increasing 88% year over year [10][11] - Combined, Celsius and Elani Nu accounted for approximately 20% of total energy drink category dollar growth in Q1 2025 [11] Market Data and Key Metrics Changes - In the U.S. tracked channels, Celsius maintained a steady category share despite increased competition and strong pricing actions from other players [10] - The sugar-free energy drink segment surpassed full-sugar varieties for the first time in 2024, driving 86% of category growth in Q1 2025 [13] Company Strategy and Development Direction - The company aims to lead the modern energy category with a focus on functional beverages, operational excellence, and innovation [6][18] - The acquisition of Elani Nu is expected to enhance the portfolio and drive growth, with plans for further international expansion [6][10] - Marketing initiatives will focus on increasing consumer awareness and trial, with new campaigns launching in summer [15][17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving business fundamentals and momentum heading into Q2, despite a challenging consumer environment [5][17] - The company is focused on improving velocity, expanding household penetration, and growing share across functional beverage occasions [22] - Management highlighted the importance of adapting to consumer purchasing habits and being cautious with pricing strategies [44][46] Other Important Information - The company appointed Eric Hansen as President and COO to drive operational excellence and efficiency [7] - The company plans to hold a public call to discuss financial considerations related to the Elani Nu acquisition [23] Q&A Session Summary Question: Insights on energy drinks category performance - Management noted that the energy category has shown resilience in both dollar and volume growth, driven by health and wellness trends and innovation [26][27] Question: Strategies to increase velocity - The company is implementing a balanced approach to promotional activities and focusing on consumer-centric innovation to drive velocity [28][29] Question: Clarification on North America sales performance - Management acknowledged a slow start in Q1, with increased competition impacting sales, but expressed optimism for improvement as the quarter progressed [35][36] Question: Pricing strategies in the category - Management indicated that they are cautious about pricing, monitoring consumer behavior while being open to opportunistic pricing adjustments [44][46] Question: Shelf space expansion expectations - The company expects to gain additional shelf space through innovative product launches and strategic placements, particularly for the Elani Nu brand [49][50] Question: Performance of Alani Nu compared to Celsius - Management highlighted opportunities for both brands to coexist and leverage each other's strengths, with minimal cannibalization observed [78][81] Question: Update on international market performance - International expansion has exceeded expectations, with positive reception in new markets like Australia and New Zealand [92][93]