Celsius Holdings (CELH) Conference Call Summary Company Overview - **Company**: Celsius Holdings, Inc. - **Industry**: Energy Drinks Key Points Strategic Partnership with PepsiCo - Celsius Holdings announced a significant expansion of its long-term strategic partnership with PepsiCo, becoming PepsiCo's strategic energy drink captain in the U.S. [4][5] - This role enhances alignment and unifies go-to-market strategies across Celsius's energy portfolio, including Celsius, Elani New, and Rockstar Energy brands [6][8][10]. Acquisition of Rockstar Energy - Celsius agreed to acquire the Rockstar Energy brand in the U.S. and Canada from PepsiCo, which complements its existing brands [6][10]. - The acquisition is expected to add over $250 million in annual sales to Celsius's portfolio [13][34]. Financial Details - PepsiCo received $585 million in newly issued convertible preferred stock, increasing its ownership stake in Celsius to approximately 11% [7][14]. - The preferred stock carries a 5% dividend and is designed to maintain Celsius's flexibility while aligning PepsiCo's interests with its performance [14]. - The transaction is expected to be accretive to cash EPS in the first full year [14]. Market Position and Growth Potential - Elani New is positioned as the fastest-growing brand in modern energy, with expectations for significant expansion in availability and appeal to young, female, and wellness-focused consumers [8][9]. - The partnership is projected to create a 20% share of the U.S. energy drink category, expanding consumer reach and positioning Celsius for sustained growth [17][18]. Transition and Integration - Transition services agreements and manufacturing agreements are in place to facilitate the integration of Rockstar into Celsius's operations [11][12]. - There may be some inventory write-offs and margin pressure during the transition, similar to previous transitions into the Pepsi system [12][68]. SKU Rationalization - There will be SKU rationalization for Rockstar to optimize the portfolio, which is anticipated to impact financial projections [35][36]. - The expected margin profile for Rockstar will initially reflect historical performance before transitioning to improved margins over time [54]. Future Outlook - The strategic alignment with PepsiCo is expected to enhance execution, shelf space, and overall category productivity [21][46]. - Celsius is optimistic about leveraging PepsiCo's distribution network to drive efficiencies and improve gross profit margins [46][67]. Additional Insights - The captaincy role provides Celsius with strategic control over portfolio management, promotional strategies, and priority periods [21][44]. - The transition is expected to be less disruptive than previous integrations, with positive feedback from distributors regarding the handling of transitions [66][68]. Conclusion - Celsius Holdings is poised for significant growth through its expanded partnership with PepsiCo, the acquisition of Rockstar Energy, and the strategic alignment of its product portfolio. The company is focused on optimizing its operations and enhancing shareholder value while navigating the transition process.

以上的这些重大举措意味着，在美国市场，Celsius 将成为百事可乐公司的战略性的能量饮料负责人与 领导者，同时管理Celsius、Alani Nu以及Rockstar Energy 三大饮料品牌;同时，百事可乐公司将主导该市 场中Celsius 品牌组合的分销渠道，知情人士称。 百事可乐公司此前曾经在2022年通过一项优先股交易，以5.5亿美元获得了Celsius 8.5% 的股权。知情人 士表示，根据最新协议，百事可乐公司已将该初始持股的可转换期延长，以与此次百事可乐新投资相匹 配，并将获得提名一名新董事成员进入 Celsius 董事会的权利。 知情人士表示，百事可乐公司将继续在国际市场拥有Rockstar Energy 品牌。 （原标题：百事可乐(PEP.US)能量饮料版图再扩张!豪掷5.85亿美元加码投资Celsius(CELH.US)） 智通财经APP获悉，有媒体援引知情人士透露的消息报道称，全球食品饮料领军者百事可乐公司 (PEP.US)正通过一项高达5.85亿美元的交易增加其在能量饮料领军者Celsius Holdings Inc.(CELH.US) 的 持股规模，该项重大交易将推动这家能量饮料 ...

Given the limited and informal nature of the provided content, a traditional industry-focused analysis is not directly applicable Instead, we can interpret the text through the lens of potential implications for the pharmaceutical or energy drink industries, focusing on consumer behavior and potential risks Consumer Behavior & Market Trends - The text suggests a consumer using multiple energy drinks (4 Celsius) and stimulants (60mg extended release adderall, 2 upper decky zyns) [1] - This behavior could indicate a trend of consumers seeking enhanced focus or performance through combined substances [1] Potential Risks & Regulatory Concerns - The combination of energy drinks and stimulants may raise concerns about potential health risks and regulatory scrutiny for the respective industries [1] - The mention of a prescription drug (Adderall) alongside other substances could highlight issues related to responsible use and potential misuse [1]

Core Viewpoint - Celsius Holdings Inc's stock has reached a new 52-week high following strong second-quarter financial results, prompting analysts to raise their price targets and express increased confidence in the company's growth potential [1][4]. Financial Performance - The company reported second-quarter adjusted earnings of 47 cents per share, significantly exceeding the analyst consensus estimate of 23 cents [2]. - Quarterly revenue increased by 84% year-over-year to $739.26 million, surpassing market expectations [2]. - Revenue from the newly acquired Alani Nu brand contributed $301.2 million, while the core Celsius brand achieved a 9% year-over-year revenue growth [3]. - Adjusted EBITDA more than doubled from the previous year to $210.3 million [3]. Analyst Sentiment - Following the earnings report, several firms, including Truist Securities, Maxim Group, Citigroup, and UBS, raised their price targets while maintaining Buy ratings [4]. - Truist increased its target from $55 to $65, and Morgan Stanley raised its target from $42 to $56 [4]. Stock Performance Metrics - Celsius Holdings has a Momentum score of 94.56, a Growth score of 86.64, and a Quality score of 86.88, indicating strong price momentum, robust business growth, and sound financial health [5]. - However, the Value score is low at 12.18, suggesting the stock is trading at a premium valuation compared to peers [6]. - As of the latest data, Celsius shares closed at $54, with a 52-week high of $54.49 and a low of $21.10 [6].

Financial Data and Key Metrics Changes - Celsius Holdings reported revenue of $739.3 million for Q2 2025, an 84% year-over-year increase, primarily driven by $301.2 million from the ALAANI New brand [7][21][22] - Adjusted EBITDA reached a record of over $200 million in 2025, with adjusted diluted EPS increasing to $0.47 per share compared to $0.28 in the prior year [9][27] - Gross margin for the quarter was 51.5%, down 50 basis points year-over-year, influenced by ALAANI New's lower margin profile [8][22] Business Line Data and Key Metrics Changes - The Celsius brand contributed $438.1 million in revenue, reflecting a 9% year-over-year increase supported by improved velocity and expanded distribution [22] - ALAANI New brand saw dollar sales rise by 129% year-over-year, achieving a 6.3% market share in the RTD energy category [14][27] - The Celsius portfolio achieved a 43% household penetration, with the Celsius brand at 34% and ALAANI New at 22% [12][94] Market Data and Key Metrics Changes - The RTD energy category grew 15.2% year-over-year in Q2, with Celsius Holdings outpacing the category with a 28.9% increase in dollar sales [12][14] - International revenue grew 27% year-over-year, with strong contributions from Australia, the UK, and France [18][60] - The Celsius brand was the number one trademark in RTD energy on Amazon during the summer Prime Day event, achieving an 18.4% share [17] Company Strategy and Development Direction - The company is focused on delivering excellent customer service, supporting robust distribution growth, and innovation, with a goal of achieving $50 million in run-rate cost synergies over two years post-acquisition of ALAANI New [9][10] - The marketing strategy includes the launch of the "Live Fit Go" campaign, aimed at connecting with consumers and increasing brand loyalty [20][76] - The company plans to expand internationally while focusing on existing markets, with a strong emphasis on health and wellness trends [60] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong growth trajectory of both brands, driven by consumer trends towards functional, zero-sugar beverages [11][60] - There are expectations of margin pressure in the second half of the year due to higher input costs, particularly from tariffs on raw materials [9][40] - The management team remains committed to operational discipline and profitable growth, with a focus on leveraging synergies from the ALAANI New acquisition [30][42] Other Important Information - The company achieved a significant retail milestone, surpassing $4 billion in retail sales over the past 52 weeks [14] - The Celsius brand's foodservice volume grew 9.8% year-over-year, representing approximately 12% of North America Celsius brand sales to PepsiCo [18] - The company ended the quarter with $615 million in cash, providing flexibility for innovation and international expansion [29] Q&A Session Summary Question: Can you provide insights on gross margin performance and future expectations? - Management highlighted strong performance in Q2, with gross margins benefiting from higher-margin products and operational efficiencies, but cautioned about potential impacts from rising raw material costs in the future [32][34][40] Question: What are the expectations for ALAANI shipments versus takeaway? - Management indicated that shipments and sell-through are closely aligned, with ongoing monitoring of inventory levels and consumer demand [45][47] Question: Can you discuss international expansion plans for the second half of the year? - Management expressed excitement about international opportunities, particularly in markets like the UK and Australia, and emphasized the importance of building local teams for execution [57][60] Question: What was the revenue contribution from the Costco channel? - Management confirmed that the club channel, including Costco, is a significant part of the business, with promotional activities contributing to revenue growth [65][68] Question: What are the drivers behind the acceleration of the Celsius brand? - Management noted that improved marketing strategies, innovative product launches, and a focus on consumer engagement have contributed to the brand's return to growth [72][76]

Financial Data and Key Metrics Changes - Celsius Holdings reported revenue of $739.3 million for Q2 2025, an 84% year-over-year increase, primarily driven by $301.2 million from the ALAANI New brand and $438.1 million from the Celsius brand [6][20] - Adjusted EBITDA reached a record of over $200 million, reflecting strong growth and operational efficiency [7][26] - Net income for Q2 was $99.6 million, compared to $79.8 million in the prior year, with adjusted diluted EPS increasing to $0.47 from $0.28 [25][26] Business Line Data and Key Metrics Changes - The ALAANI New brand experienced a 129% increase in dollar sales, making it the largest share gainer in the RTD energy category [12][13] - The Celsius brand saw a 9% year-over-year revenue increase, supported by improved velocity and expanded distribution [20] - Total points of distribution and items per store rose approximately 23%, with velocity increasing by 20% quarter-over-quarter [12] Market Data and Key Metrics Changes - The RTD energy category grew 15.2% year-over-year in Q2, with Celsius Holdings outpacing the category with a 28.9% increase in dollar sales [11] - International revenue grew 27% year-over-year, with strong contributions from Australia, the UK, and France [16] - The Celsius portfolio achieved a 43% household penetration, with the Celsius brand at 34% and ALAANI New at 22% [11][92] Company Strategy and Development Direction - The company focuses on delivering excellent customer service, supporting robust distribution growth, and driving innovation [7][9] - Celsius Holdings aims to achieve $50 million in run-rate cost synergies over two years post-acquisition of ALAANI New, contributing to strong pro forma profitability [7] - The company is investing in brand awareness and expanding its marketing efforts, including a national TV commercial during NFL broadcasts [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong growth trajectory, driven by intentional consumer choices towards functional, zero-sugar products [10] - The company anticipates margin pressure in the second half of the year due to higher input costs, particularly from tariffs on raw materials [7][21] - Management remains focused on profitable growth and operational discipline, with plans to continue leveraging synergies from the ALAANI New acquisition [28] Other Important Information - The Celsius brand was the number one trademark in RTD energy on Amazon during the summer Prime Day event, achieving an 18.4% share [15] - The company is building capabilities in systems, supply chain, and analytics to support growth [17] - Celsius Holdings achieved a significant retail milestone, surpassing $4 billion in retail sales over the past 52 weeks [13] Q&A Session Summary Question: Can you provide insights on gross margin performance and future expectations? - Management highlighted strong gross margins driven by higher-margin products and operational efficiencies, with expectations for continued margin strength despite potential tariff impacts [30][32][39] Question: What are the expectations for ALAANI shipments versus takeaway? - Management indicated that shipments and sell-through are closely aligned, with robust growth expected for the ALAANI brand, particularly with upcoming limited-time offers [44][46] Question: Can you discuss international expansion plans? - Management expressed excitement about international opportunities, with a focus on building teams and executing strategies in markets like the UK, Ireland, and Australia [56][58] Question: What is the revenue contribution from the Costco channel? - Management confirmed that the Costco channel is significant, with promotional activities contributing to revenue growth, and adjustments made for the timing of promotions [63][65] Question: How is the Celsius brand performing and what are the drivers of its growth? - Management noted a return to growth for the Celsius brand, driven by new marketing campaigns and product innovations, with expectations for continued momentum [69][72][92]

Core Insights - Celsius Holdings, Inc. (CELH) and PepsiCo, Inc. (PEP) are significant players in the beverage industry, with CELH focusing on functional, sugar-free energy drinks and PEP being a diversified multinational with a broad portfolio [1][2] Group 1: Celsius Holdings (CELH) - Celsius Holdings is strengthening its position in the energy beverage market, with the acquisition of Alani Nu contributing to approximately 20% of the total dollar growth in the energy drink category in Q1 2025 [3][4] - The company's strategy emphasizes sugar-free, better-for-you products, with sugar-free energy drinks accounting for 86% of the total growth in the energy category during the same period [4] - Innovation is key for CELH, as it launched new Vibe and ESSENTIALS flavors and CELSIUS HYDRATION, targeting the $1.4 billion hydration powder market [5] - Retail expansion is a growth driver, with distribution increased through over 1,800 Home Depot locations and 18,000 Subway restaurants [6] - Despite strong brand momentum, CELH faces operational and financial pressures, including rising costs and competition [7] Group 2: PepsiCo (PEP) - PepsiCo generated net revenues of $22.7 billion in Q2 2025, maintaining a strong market share in carbonated soft drinks, hydration, and sports beverages [8][9] - The company is integrating its North American businesses to enhance operational efficiency through investments in AI and unified data platforms [9][10] - PepsiCo is repositioning key brands to elevate real-food credentials, with growth in the $2 billion permissible snack segment and innovations in no-sugar colas and functional hydration platforms [11][12] - The company is targeting a return to the low end of its long-term top-line growth algorithm, supported by strong international momentum [12] Group 3: Financial Performance and Valuation - The Zacks Consensus Estimate for CELH's 2025 earnings per share (EPS) remains at 82 cents, while PEP's EPS estimate has increased by 13 cents to $8.00 [13][14] - Over the past month, CELH shares fell 0.7%, underperforming the S&P 500 Index, while PEP's stock surged 13.8% [16] - CELH trades at a forward price-to-earnings (P/E) ratio of 44.59X, compared to PEP's more modest forward P/E of 17.95X [17]

Valuation Concerns - Celsius Holdings, Inc. (CELH) is trading at a forward 12-month price-to-earnings (P/E) multiple of 45.27X, significantly higher than the Zacks Food - Miscellaneous industry average of 15.96X, the Consumer Staples sector average of 17.32X, and the S&P 500 average of 22.61X [1][7] - The current valuation exceeds the median P/E level of 33.07 recorded over the past year, raising questions about whether CELH can justify this premium through sufficient growth [1][7] Stock Performance - Over the past three months, CELH shares have increased by 24%, outperforming the industry growth of 0.1%, sector growth of 1.1%, and S&P 500 growth of 19% [5] - Competitors such as Monster Beverage gained only 3%, while PepsiCo and Coca-Cola saw declines of 2.2% and 2.4%, respectively, during the same period [5] Market Position and Growth Strategy - Celsius Holdings continues to strengthen its position in the energy beverage market, with the acquisition of Alani Nu contributing to approximately 20% of the total dollar growth in the energy drink category in Q1 2025 [9] - The company's focus on sugar-free, better-for-you products aligns with consumer trends, with sugar-free energy drinks accounting for 86% of the total growth in the energy category during the first quarter [10] - Recent product innovations include new Vibe and ESSENTIALS flavors and the launch of CELSIUS HYDRATION, aimed at the $1.4 billion hydration powder market [11] Retail Expansion - Celsius has expanded its distribution through over 1,800 Home Depot locations and 18,000 Subway restaurants, enhancing its presence in foodservice and on-the-go consumption channels [12] Financial Performance - In Q1 2025, Celsius Holdings reported a 7% year-over-year revenue decline, attributed to lower product velocity and changes in promotional timing [15] - Operating expenses rose to $120.3 million in Q1 from $99 million a year earlier, driven by increased marketing and costs related to the Alani Nu acquisition [16] Earnings Estimates - The Zacks Consensus Estimate for earnings per share has seen upward revisions, with the current quarter and financial year estimates rising to 23 cents and 82 cents, respectively [13]

Over the last month and a half, the market has been nothing short of harrowing. Tech and energy have been hit the hardest, while there have been very few places to hide. The more defensive stocks have hung in there a bit better. Sometimes though, even stocks in the safest corners of the market get smacked down. Maybe it's the high beta, maybe it's the growth, but either way, it still happens. Today's Bull of the Day is a stock that is well off 2024 highs, but has recovered nicely in the face of all this mar ...