Emily Flippen: For so many investors, it probably feels like reality is catching up to the market because there's been this difference between how investors and consumers have been feeling versus what the market has been experiencing. It does feel like, to me, with so few trading days left in the year, that it's unlikely that the market could go higher from here, given all the headwinds that you just mentioned one of the company that I follow pretty closely is a business called Paycom . They manage payroll ...

Summary of Celsius Holdings Conference Call Company Overview - **Company**: Celsius Holdings - **Industry**: Beverages, specifically energy drinks Key Points and Arguments Q3 Performance - Celsius reported a strong Q3 with **$200 million in EBITDA** and a **13% year-over-year growth rate** as per Circana data [2][4] - Alani Nu brand is projected to reach a **$1.2 billion run rate** by the end of Q3, capturing over **20% market share** in its category [4][34] Marketing and Promotions - The company emphasized the success of the **Live Fit Go campaign**, which has been a significant driver of growth since its launch in June [2][4] - Promotional activities included participation in **Amazon Prime Day** and various promotions at **Costco**, which contributed to revenue recognition timing discrepancies between Q2 and Q3 [3][4] Transition to PepsiCo - The transition of Alani Nu into the Pepsi system is underway, with expectations for a smooth integration [5][6] - Management indicated that the transition may not result in the typical large inventory fill due to cash management practices at large CPG companies [6][7] Market Dynamics - The energy drink category is experiencing healthy growth, with Celsius and Alani Nu attracting new consumers, particularly among females and those seeking sugar-free options [13][14][17] - The company anticipates continued growth in the energy drink sector, albeit at a more sustainable rate than the mid-teens growth seen recently [14] Competitive Landscape - Celsius is positioned as a leader in the female and sugar-free segments, with a strong brand identity that takes time to build [27][28] - The company acknowledges increased competition, particularly from Monster, which is launching a female-focused product [27][28] Future Outlook - The management is optimistic about Q4 and 2026, expecting improvements in gross margins and EBITDA as integration with Pepsi progresses [48][49] - The company plans to continue investing in marketing, with **23%-25% of revenue** allocated to sales and marketing in Q4 [50] Capital Allocation and M&A Strategy - Celsius announced a buyback program to address perceived undervaluation and is open to future M&A opportunities, particularly in vertical integration [54][55] - The company is also focusing on enhancing its manufacturing capabilities to drive efficiencies [56] Protein Product Opportunities - While the primary focus of the Alani Nu acquisition was energy drinks, there is potential for growth in the protein category, although no immediate plans are in place [57][59] International Expansion - Celsius aims to expand its international footprint, currently at about **5% international sales**, with plans to evaluate new markets [63][64] - The company is building a robust international team to support this growth [65] Conclusion - Celsius Holdings is positioned for continued growth in the energy drink market, with strong brand identities, a successful transition to Pepsi, and a focus on marketing and international expansion. The management remains optimistic about future performance despite current market challenges and competition.

Core Viewpoint - Celsius experienced a significant stock selloff, with shares dropping nearly 8% after a 25% decline the previous day, despite reporting strong third-quarter results. Analysts suggest that the selloff may be overdone, given the company's positive long-term growth outlook [2][6][8]. Financial Performance - For the third quarter, Celsius reported a total revenue increase of 173% year-over-year, with Alani Nu sales growing by 114% and Celsius brand retail sales up by 13% [5][6]. - The company's market share rose to 21%, up from 10% two years ago, indicating substantial growth in its retail presence [5]. Strategic Moves - Celsius has expanded its portfolio by acquiring Alani Nu in April and Rockstar Energy in August, enhancing its market position [4]. - The transition of Alani Nu's distribution to PepsiCo is set to begin in December, which may introduce short-term volatility in inventory and logistics costs [7][9]. Analyst Perspectives - Analysts from TD Cowen, Morgan Stanley, and Roth Capital view the current stock selloff as a temporary issue, with price targets set at $55, $64, and $70 respectively, indicating confidence in the company's long-term growth potential [9][10][12]. - Deutsche Bank's analyst noted that while there may be short-term distortions in inventory and shipment timing, consumption trends remain strong, suggesting a positive outlook for the brand [11].

Core Insights - Celsius Holdings, Inc. (CELH) reported a strong performance in Q2 2025, with revenues increasing by 84% year over year to $739.3 million and retail sales exceeding $4 billion over the past year [1][10] - The acquisition of Alani Nu contributed $301.2 million to revenues, while the Celsius brand generated $438.1 million, highlighting the company's leadership in the functional energy drink market [1][10] Retail and Consumer Engagement - Celsius Holdings continues to attract Gen Z and female consumers with its zero-sugar and health-oriented positioning, achieving a combined household penetration of 43% across Celsius and Alani Nu, supported by repeat purchase rates above 65% [2] - Innovative flavors such as Sherbet Swirl, Cotton Candy, and Fizz-Free Pink Lemonade have helped maintain momentum and expand retail visibility in major U.S. channels [2] Operational Performance - The company maintained a gross margin of 51.5% despite Alani Nu's lower-margin profile and achieved a record adjusted EBITDA of $210.3 million, reflecting effective cost management and improved production efficiencies [3][10] - The upcoming LIVE. FIT. GO. marketing campaign aims to enhance brand awareness and position Celsius Holdings as a lifestyle energy leader [3] International Growth - International revenues grew by 27% year over year, driven by growth in the U.K., France, and Australia, with strategic partnerships and localized marketing efforts aiding in replicating domestic success in global markets [4] Future Outlook - With strong innovation, expanding brand equity, and disciplined operational management, Celsius Holdings is well-positioned for continued growth in the evolving energy category [5] - The company's stock has increased by 124% year to date, contrasting with a 13.2% decline in the industry [8] Valuation and Earnings Estimates - Celsius Holdings trades at a forward price-to-earnings ratio of 42.34, significantly higher than the industry average of 14.77 [12] - The Zacks Consensus Estimate for CELH's earnings implies year-over-year growth of 60% for 2025 and 29.7% for 2026, with recent upward revisions in earnings estimates [15]

Core Viewpoint - The article discusses the current investment outlook for Coca-Cola and suggests that while it has historical significance and stability, it may not be the best investment choice compared to emerging opportunities like Celsius Holdings [6][11]. Coca-Cola Company - Coca-Cola has been a long-term investment for Berkshire Hathaway, with Buffett initially investing over $1 billion in 1989, which has grown to a holding of 400 million shares worth more than $28 billion today [2][3]. - The company reported a 5% increase in net revenues for Q3 2025 compared to the same quarter in 2024, indicating ongoing revenue growth despite its long history [9]. - Coca-Cola has a strong dividend history, having paid and raised dividends for over 60 years, currently offering a 2.8% dividend yield [10]. - Despite its strengths, Coca-Cola has underperformed the S&P 500 over various time frames, averaging only 5% year-over-year quarterly growth over the last 20 years, which is insufficient for market-beating returns [7][8]. Celsius Holdings - Celsius Holdings is positioned for potential growth in international markets, similar to Coca-Cola's historical expansion [13][16]. - The company reported nearly $1.3 billion in revenue in North America for 2023, with expectations to surpass $100 million in international revenue in 2025, up from around $75 million in 2024 [14][15]. - Celsius is currently facing competition but is looking to replicate Coca-Cola's success in international markets, which could lead to greater stock upside compared to Coca-Cola over the next five years [16][17].

S&P 500 Analysis - The S&P 500 has shown resilience, finding support at the 20-day moving average, which is currently around 6575 to 6590 [2][3] - A recent pullback was brief, indicating the overall health of the S&P 500, with traders viewing the close above the high from the pullback day as a potential entry point [3][4] - The current level of the S&P 500 is 6665, not far from its record high of 6699 [4] Celsius Holdings - Celsius has seen a significant recovery, up over 170% from its lows in February and 123% year-to-date [5] - The stock has established support between 49 and 50, with a potential target of $68 for bullish traders [6][8] - Recent price action indicates a break above the 50-day moving average, suggesting a positive trend [7] Lyft Analysis - Lyft has experienced a strong year, with a year-to-date increase of 67% and a remarkable 125% rise from April levels [9] - The 20-day moving average is trending upwards, with potential support levels identified at $20 or $21 [10] - A longer-term view shows a trading range that has been broken, with potential resistance around $32 [11]

Core Insights - Celsius Holdings, Inc. (CELH) and Monster Beverage Corporation (MNST) are leading players in the beverage industry, particularly in the energy and functional market [1][3] - The beverage industry is shifting towards wellness, with increasing consumer demand for healthier, functional drinks [2][9] - Both companies are adapting their product portfolios to align with this growing consumer preference for wellness-focused beverages [2][9] Celsius Holdings, Inc. (CELH) - Celsius specializes in healthier, nutritional functional beverages aimed at consumers seeking alternatives to traditional energy drinks [4][5] - The company has established strategic partnerships, such as with PepsiCo, and acquired Alani Nutrition to enhance its distribution and market presence [6] - Celsius emphasizes innovation and health-focused formulations, with campaigns like "LIVE FIT" to engage health-conscious consumers [7] - CELH's stock has risen 18.1% over the past three months, reflecting positive market momentum [13] - Revenue and EPS estimates for 2025 are projected to increase by 77.7% and 54.3% year over year, respectively, reaching $2.4 billion and $1.08 per share [18] Monster Beverage Corporation (MNST) - Monster Beverage is a global leader in energy drinks, with a diverse portfolio that includes craft beers and flavored beverages [8][10] - The company continues to innovate, launching new products like Monster Energy Lando Norris Zero Sugar and expanding its Ultra brand [11] - Despite a strong energy drink market presence, MNST has faced challenges in its Alcohol Brands segment, with an 8.6% sales decline in Q2 2025 [12] - MNST's stock has grown 5.1% in the past three months, indicating steady performance [13] - Revenue and EPS estimates for 2025 are expected to increase by 7.8% and 17.9% year over year, respectively, reaching $8.1 billion and $1.91 per share [19] Comparative Analysis - CELH trades at a forward P/E multiple of 39.64X, below its five-year median, while MNST has a forward P/E of 31X, also below its five-year median [14][15] - CELH's premium valuation reflects its stronger growth trajectory and innovation, while MNST's valuation appears comparatively cheaper [15] - In terms of long-term growth potential, CELH is positioned more favorably due to its focus on health and wellness, making it a more attractive investment option [22]

Financial Data and Key Metrics Changes - The company reported record revenues, profits, gross profits, and EBITDA in the second quarter [3] - The energy category has stabilized and is now experiencing double-digit growth rates, with Celsius holding approximately a 10-11% market share [1][3] Business Line Data and Key Metrics Changes - The acquisition of Alani Nu, a female-focused brand, has been integrated into the Celsius portfolio, which is expected to enhance growth [2][3] - The partnership with PepsiCo allows Celsius to control planograms and optimize SKU placements, which is anticipated to drive efficiencies and revenue [7][8] Market Data and Key Metrics Changes - The energy drink category has seen a year-over-year growth of 17-18% in the last four weeks, with brands like Red Bull and Monster performing well [15] - The transition from coffee beverages to energy drinks is noted, indicating a shift in consumer preferences [16][19] Company Strategy and Development Direction - The long-term strategy focuses on strategic partnerships for distribution, particularly with PepsiCo, to enhance market presence and product placement [4][5] - The company aims to leverage its portfolio of brands (Celsius, Alani Nu, Rockstar) to target different consumer segments and maximize market opportunities [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the energy category's robustness and the company's ability to adapt to changing consumer behaviors [15][17] - The integration of Alani Nu and the acquisition of Rockstar are seen as pivotal for future growth, with expectations of enhanced distribution capabilities through PepsiCo [23][54] Other Important Information - The company is preparing for the largest convenience store show in the country, which will help set planograms for the upcoming year [27] - The partnership with PepsiCo includes a significant equity investment and an additional board seat, reflecting confidence in Celsius's growth potential [52] Q&A Session Summary Question: What does the agreement with Pepsi mean for Celsius' long-term strategy? - The agreement enhances distribution capabilities and allows for better product placement, which is critical in the competitive energy category [4] Question: How does the acquisition of Alani Nu change the ability to service energy consumers? - The acquisition allows for a total energy approach, targeting different consumer segments effectively [11] Question: What is the expected financial impact of the deal with PepsiCo? - The deal is expected to bring in approximately $250 million of incremental revenue and enhance operational efficiencies [54] Question: How is the transition of Alani Nu to PepsiCo being managed? - The transition is anticipated to be seamless, with a focus on communication and project management to mitigate disruptions [60][62] Question: What does success look like for Celsius in the next two to three years? - Success is defined by a strong portfolio presence in the energy category, aiming for continued growth and market share expansion [65]

Financial Data and Key Metrics Changes - The energy category has stabilized and is experiencing double-digit growth rates, with Celsius showing significant growth and a market share of approximately 10-11% [2][5][26] - Record revenues and profits were achieved in the second quarter, with gross profits and EBITDA also reaching new highs [5][72] Business Line Data and Key Metrics Changes - The acquisition of Elani Nu, a female-focused brand, is expected to enhance the Celsius portfolio and has been integrated since April 1 [3][5][40] - The partnership with Pepsi has positioned Celsius as a category captain in the energy drink sector, allowing for better product placement and stock availability [6][10][12] Market Data and Key Metrics Changes - The energy drink category has seen a year-over-year growth of 17-18%, with brands like Red Bull and Monster continuing to perform well [25][26] - The shift in consumer behavior indicates a transition from coffee to energy drinks, with larger formats becoming more popular among consumers [29][33] Company Strategy and Development Direction - The long-term strategy focuses on strengthening distribution partnerships, particularly with Pepsi, to enhance market presence and product availability [9][10][67] - The company aims to optimize its brand portfolio, including Rockstar, Elani, and Celsius, to cater to diverse consumer segments and drive daily consumption [52][63][85] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the energy category's robustness and the company's ability to leverage its partnership with Pepsi for future growth [25][67] - The integration of Elani and Rockstar is seen as a significant opportunity to enhance market reach and brand performance [36][40][72] Other Important Information - The company is restructuring its teams to focus on convenience, food service, and mass distribution, enhancing its operational capabilities [68][79] - The transition to Pepsi's distribution network is anticipated to be smooth, with a focus on communication and project management to mitigate disruptions [76][80] Q&A Session Summary Question: What does the agreement with Pepsi mean for Celsius' long-term strategy? - The partnership is critical for distribution, allowing better product placement and stock management in a competitive market [9] Question: How does the acquisition of Elani Nu change the ability to service energy consumers? - It provides a modern energy approach, targeting different consumer segments effectively [18] Question: What is the expected financial impact of the deal with Pepsi? - The deal is expected to enhance revenue and operational efficiency, with Rockstar contributing approximately $250 million in incremental revenue [71][72] Question: How is the transition to Pepsi's distribution network being managed? - The company has established processes and a larger key accounts team to ensure a seamless transition [79][80] Question: What does success look like for Celsius in the next two to three years? - Success involves building a strong portfolio with significant market share in the energy category, leveraging Pepsi's distribution capabilities [85]

Core Insights - Celsius Holdings' stock has increased by 43% since the release of its Q2 2025 earnings on April 7, driven by strong sales and the acquisition of Alani Nu [1][3] - A critical metric for investors is net sales, which rose to over $739 million in Q2, marking an 84% year-over-year increase, largely attributed to Alani Nu [3][6] - Celsius brand product sales grew by 9% year-over-year, significantly lower than the 129% growth of the Alani Nu brand [3][4] Sales and Distribution - The partnership with PepsiCo, established in August 2022, has been a major contributor to Celsius' sales growth, making PepsiCo essential for the company's ongoing success [4][6] - Celsius' share of the U.S. market increased by 1.8 percentage points to 17.3% in the last quarter, indicating a positive trend in market presence [7] Financial Performance - Selling, general, and administrative expenses surged by 107% year-over-year due to acquisition-related costs and increased marketing spending, which investors need to monitor closely [6]