Celsius(US:CELH)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%, with Alani Nu accounting for the majority of that growth [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% [17][18] - Alani Nu revenue nearly doubled, up 99%, driven by strong limited-time offerings [18] - Rockstar Energy contributed approximately $11 million in revenue in its first month under Celsius ownership, with a total impact of about $18 million in Q3 [18] Market Data and Key Metrics Changes - The combined portfolio 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 gained more than two share points year-over-year in Walmart alone [9] Company Strategy and Development Direction - The company is focused on expanding its partnership with PepsiCo, enhancing its role as the strategic energy drink captain within Pepsi's portfolio [5][6] - Plans to optimize the Rockstar Energy brand and stabilize its market presence while continuing to grow Celsius and Alani Nu [22] - The company aims to build a portfolio that reaches more consumers during more occasions, emphasizing collaboration and organizational excellence [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory for 2026, despite anticipated challenges in Q4 due to integration activities and promotional timing [22] - The company is optimistic about the international expansion, particularly in markets like Australia and the U.K., where performance has exceeded expectations [14][77] Other Important Information - The company recorded approximately $247 million in distributor termination expenses during the quarter, fully funded by PepsiCo [20] - Management highlighted the importance of seasonal flavor offerings and marketing campaigns in driving consumer engagement and sales [10][12] Q&A Session Summary Question: Clarification on core Celsius growth and scanner data - Management acknowledged the variance between reported revenue growth and scanner growth, attributing it to various factors including inventory movements and promotional activities [25][28] Question: Pricing strategy amidst market changes - Management discussed the ongoing evaluation of pricing strategies in response to cost pressures and tariff impacts, emphasizing the need for a revenue management team [36][37] Question: Details on Q4 integration and inventory management - Management indicated that Q4 would be a noisy quarter due to integration activities and inventory transitions, with a phased approach to Alani's rollout in the Pepsi system [40][46] Question: Comments on gross margins and inflation impacts - Management provided insights on the expected pressure on gross margins due to tariffs and inflation, while also highlighting opportunities for efficiency improvements through integration [68][72] Question: International expansion plans - Management outlined the strategic investments in international markets, emphasizing the growth potential in Australia and Europe [77] Question: Alani Nu's distribution ramp-up and collaboration with PepsiCo - Management expressed confidence in Alani Nu's growth potential and the improved collaboration with PepsiCo to avoid past inventory optimization issues [81][84]