2025-11-06 14:02Financial Data and Key Metrics Changes - For Q3 2025, consolidated revenue was approximately $725 million, up 173% year-over-year [17] - Gross margin for the quarter was 51.3%, compared to 46% a year ago, reflecting improvements in inventory optimization and lower promotional spend [19] - Year-to-date consolidated sales increased by roughly 75%, or $770 million, with Alani Nu accounting for the majority of that growth [18][19] Business Line Data and Key Metrics Changes - Celsius brand's U.S. scanner growth rate was 13%, while revenue growth was reported at 44%, indicating a discrepancy due to inventory movements and promotional activities [17][18] - Alani Nu revenue nearly doubled, up 99%, driven by strong limited-time offerings like Witches Brew [18] - Rockstar Energy contributed approximately $11 million in revenue in its first month under Celsius ownership, with an additional $7 million recorded in other income [18] Market Data and Key Metrics Changes - The combined portfolio of Celsius, Alani Nu, and Rockstar represented over 20% share of the U.S. energy drink market, growing 31% year-over-year, nearly twice as fast as the overall category [8] - Celsius Holdings' portfolio generated more than $5 billion in retail sales in U.S. track channels over the last 52 weeks [8] Company Strategy and Development Direction - The company is focused on expanding its partnership with PepsiCo, enhancing its role as a strategic energy drink captain within PepsiCo's portfolio [5][6] - The acquisition of Rockstar Energy is expected to broaden the consumer base and strengthen the company's market position [7] - The company aims to optimize its product assortment and stabilize Rockstar Energy while continuing to grow Celsius and Alani Nu [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing strong consumer demand for functional energy products and successful marketing campaigns [10][11] - The company anticipates Q4 2025 will be a noisy quarter due to integration activities and promotional timing, with potential pressure on gross margins [22] - Management highlighted the importance of strategic investments in international markets, particularly in Australia and Europe, as part of their growth strategy [77] Other Important Information - The company recorded approximately $247 million in distributor termination expenses during the quarter, fully funded by PepsiCo under a long-term agreement [20] - The leadership team has been strengthened with new appointments, including a Chief Marketing Officer and a President of Celsius International [13] Q&A Session Summary Question: Discrepancy in core Celsius growth rates - Management acknowledged the variance between reported revenue growth and scanner growth, attributing it to various factors including inventory movements and promotional activities [26][28] Question: Pricing strategy amidst inflation - Management is evaluating pricing strategies, including promotional tactics and building a revenue management team to enhance pricing capabilities [37] Question: Integration and inventory management for Q4 - Management indicated that Q4 will involve phased integration into the Pepsi system, which may lead to inventory fluctuations and potential margin pressure [40][46] Question: Alani Nu's growth and distribution ramp-up - Management expressed optimism about Alani Nu's potential to reach Celsius-level distribution, emphasizing improved collaboration with PepsiCo to avoid past inventory optimization issues [81][84]