Celsius(US:CELH)2025-05-06 13:02Financial 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 [9][18][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 [9][19] - Gross margin expanded by 110 basis points to 52.3%, supported by sourcing efficiencies for raw and packaging materials [9][19] Business Line Data and Key Metrics Changes - International revenue grew 41% to $22.8 million, indicating strong organic growth in both 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 [12] Market Data and Key Metrics Changes - In the U.S., Celsius maintained steady category share despite increased competition and strong pricing actions from other players [11] - 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] - The average items selling per store within the Celsius brand family increased by 4.1 items in the convenience channel during Q1 2025 [12] Company Strategy and Development Direction - The company aims to lead the modern energy category with a focus on functional beverages that align with health and wellness trends [6][17] - The acquisition of Elani Nu is expected to enhance the portfolio and drive growth, with plans for further innovation and marketing campaigns [7][12] - The company is committed to operational excellence and has appointed a new COO to drive efficiencies and scale [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the positive momentum heading into Q2, despite a challenging consumer environment [6][16] - The company is focused on improving velocity, expanding household penetration, and growing share across functional beverage occasions [21][22] - Management highlighted the importance of adapting to consumer purchasing habits and maintaining a cautious approach to pricing and promotions [42][43] Other Important Information - The company plans to hold a public call to discuss modeling and financial considerations related to the Elani Nu acquisition [23] - The balance sheet remains strong with $977 million in cash and no outstanding debt prior to the acquisition [20] 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 [25][26] Question: Strategies to increase velocity - Management discussed a balanced approach to innovation and promotional activities, learning from previous years to drive consumer engagement [27][28] Question: Clarification on North America sales performance - Management acknowledged a slow start in Q1, impacted by increased competition and promotional activities, but expressed optimism for improvement moving forward [32][33] Question: Pricing strategies in the category - Management indicated a cautious approach to pricing, monitoring consumer behavior while being open to opportunistic pricing adjustments [40][42] Question: Shelf space expansion expectations - Management highlighted plans for new product launches and increased cooler placements to enhance visibility and drive sales [47][48] Question: Performance of Elani Nu compared to Celsius - Management noted minimal cannibalization between brands and emphasized opportunities for cross-promotion and distribution [76][77] Question: International market performance - Management reported strong acceptance and growth in international markets, with plans for further expansion [88][90]