CELH Celsius Holdings Inc

Record second quarter revenue of $402.0 million, up 23% year over year

Record second quarter gross profit of $209.1 million, up 32% year over year

Second quarter diluted EPS of $0.28, up 65% year over year

Celsius Holdings, Inc. (Nasdaq: CELH), maker of CELSIUS®, the premium lifestyle energy drink formulated to power active lifestyles with ESSENTIAL ENERGY™, today reported record second quarter 2024 financial results.

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Revenue (in millions) (Graphic: Business Wire)

Summary Financials

2Q 2024

2Q 2023

Change

1H 2024

1H 2023

Change

(Millions except for percentages and EPS)

Revenue

$402.0

$325.9

23%

$757.7

$585.8

29%

N. America

$382.4

$310.8

23%

$721.9

$559.4

29%

International

$19.6

$15.1

30%

$35.8

$26.4

36%

Gross Margin

52.0%

48.8%

+320 BPS

51.6%

46.6%

+500 BPS

Net Income

$79.8

$51.5

55%

$157.6

$92.7

70%

Net Income att. to Common Shareholders

$66.7

$40.8

63%

$131.5

$72.2

82%

Diluted EPS

$0.28

$0.17

65%

$0.55

$0.31

77%

Adjusted EBITDA*

$100.4

$78.1

29%

$188.4

$126.9

48%

John Fieldly, Chairman and CEO of Celsius Holdings, Inc., said: “Celsius today reported its best second quarter financial results ever, delivering records in revenue, gross profit and gross margin. Celsius continued to lead the energy drink category, contributing 47 percent of all second-quarter growth, and we believe that we are well-positioned to capture incremental category dollar share. Celsius innovation is giving consumers great tasting, better-for-you energy drink products that are filling a whitespace and bringing new consumers to an evolving energy drink category.”

FINANCIAL HIGHLIGHTS FOR THE SECOND QUARTER OF 2024

Revenue for the second quarter of 2024 increased 23% to $402.0 million compared to $325.9 million for the prior-year period, driven primarily by the North American business and the company’s success in sustaining consumer demand growth. Revenue in the quarter was offset in part by reduction in inventory days on hand by a large distributor.

Retail sales of Celsius in total U.S. MULOC grew by 36.5% year over year in the second quarter of 20241 as reported by Circana for the last-thirteen-week period ended June 30, 2024.

International sales of $19.6 million increased 30% year over year in the second quarter from $15.1 million, driven by ongoing velocity improvements and brand awareness.

Gross profit for the second quarter of 2024 increased 32% to $209.1 million compared to $159.0 million for the prior-year period. Gross profit as a percentage of revenue was 52.0% for the three months ended June 30, 2024, up from 48.8% for the prior-year period, as a result of freight optimization and lower materials costs.

Diluted earnings per share for the second quarter increased 65% to $0.28 compared to $0.17 for the prior-year period, driven by improvements in gross margin and leverage across SG&A.

FINANCIAL HIGHLIGHTS FOR THE FIRST HALF OF 2024

Revenue for the first half of 2024 increased 29% to $757.7 million compared to $585.8 million for the prior-year period. International sales of $35.8 million increased 36% from $26.4 million for the prior-year period.

Gross profit for the first half of 2024 increased 43% to $391.3 million compared to $272.8 million for the prior-year period. Gross profit as a percentage of revenue was 51.6% for the six months ended June 30, 2024, up from 46.6% for the prior-year period.

Diluted earnings per share for the first half of the year increased 77% to $0.55 compared to $0.31 for the prior-year period, driven by improvements in gross margin and leverage across SG&A.

BUSINESS OPERATIONS AND COMPANY HIGHLIGHTS

Share Growth

Celsius’ energy drink category dollar share in MULOC in the last-four-week period ended July 14, 2024, was 11%, an increase of 1.4 points compared to the year-ago period2. This share performance delivered quarter-over-quarter sales growth for Celsius of 11.8% within the category3.

Celsius gained approximately 35% more retail shelf space, increasing the average SKUs selling per store to 20 from 15, according to Circana’s last-four-week read ended July 14, 2024, compared to the last-four-week period ended Dec. 3, 20234.

Alternative Growth Drivers

Club channel sales for the quarter ended June 30, 2024, increased 30% to $88.0 million compared to $67.9 million for the prior-year period.

Celsius sales to Amazon increased 41% year over year to approximately $39.9 million for the quarter ended June 30, 2024.

Approximately 12.1% of Celsius’ total U.S. sales to PepsiCo in the second quarter of 2024 was to the food service channel.

Innovation and Marketing

Sales of CELSIUS Essentials continue to exceed the company’s expectations and have reached 64% ACV and 4.4 average items sold per store5. CELSIUS Essentials were sold in more than 124,602 stores in the last-four-week period ended July 14, 20246.

Celsius introduced three great tasting and refreshing 12-ounce flavors during the summer: CELSIUS Sparkling Watermelon Lemonade, CELSIUS Sparkling Kiwi Strawberry and CELSIUS Sparkling Cherry Cola. Additionally, three new CELSIUS On The Go powders debuted in the second quarter: CELSIUS On The Go Peach Vibe, CELSIUS On The Go Tropical Vibe and CELSIUS On The Go Arctic Vibe.

International Expansion

Celsius began sales in the UK and Ireland in the second quarter of 2024 through the fitness channel and in select gyms.

Sales in Canada continued to exceed the company’s initial expectations in the second quarter of 2024, during which we introduced CELSIUS Sparkling Green Apple Cherry to the Canadian market.

Sales in Australia, France and New Zealand are expected to begin in the second half of this year with broadening reach throughout 2025.

Second Quarter 2024 Earnings Webcast

Management will host a webcast at 8 a.m. EDT on Tuesday, Aug. 6, 2024, to discuss the company’s second quarter financial results with the investment community. Investors are invited to join the webcast accessible from https://ir.celsiusholdingsinc.com. Downloadable files, an audio replay and transcript will be made available on the Celsius Holdings investor relations website.

*The company reports financial results in accordance with generally accepted accounting principles in the United States (“GAAP”), but management believes that disclosure of Adjusted EBITDA, a non-GAAP financial measure that management uses to assess our performance, may provide users with additional insights into operating performance. Please see “Use of Non-GAAP Measures” and reconciliations of this non-GAAP measure to the most directly comparable GAAP measure, both of which can be found below.

1Circana Total US MULOC L13W ended 6/30/24, RTD Energy

2Circana Total US MULOC L4W ended 7/14/24, RTD Energy

3Circana Total US MULOC L13W ended 6/30/24, RTD Energy

4Circana Total US MULOC L4W ended 12/3/23 v. L4W ended 7/14/24, RTD Energy

5Circana Total US MULOC L4W ended 7/14/24, RTD Energy

6Circana Total US MULOC L4W ended 7/14/24, RTD Energy

About Celsius Holdings, Inc.

Celsius Holdings, Inc. (Nasdaq: CELH) is the maker of energy drink brand CELSIUS®, a lifestyle energy drink born in fitness and a pioneer in the rapidly growing energy category. For more information, please visit www.celsiusholdingsinc.com.

Forward-Looking Statements

This press release contains statements that are not historical facts and are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements contain projections of Celsius Holdings’ future results of operations or financial position, or state other forward-looking information. You can identify these statements by the use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “will,” “would,” “could,” “project,” “plan,” “potential,” “designed,” “seek,” “target,” and variations of these terms, the negatives of such terms and similar expressions. You should not rely on forward-looking statements because Celsius Holdings’ actual results may differ materially from those indicated by forward-looking statements as a result of a number of important factors. These factors include but are not limited to: the strategic investment by and long term partnership with PepsiCo, Inc.; management’s plans and objectives for international expansion and future operations globally; general economic and business conditions; our business strategy for expanding our presence in our industry; our expectations of revenue; operating costs and profitability; our expectations regarding our strategy and investments; our expectations regarding our business, including market opportunity, consumer demand and our competitive advantage; anticipated trends in our financial condition and results of operation; the impact of competition and technology change; existing and future regulations affecting our business; the Company’s ability to satisfy, in a timely manner, all Securities and Exchange Commission (the “SEC”) required filings and the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the rules and regulations adopted under that Section; and other risks and uncertainties discussed in the reports Celsius Holdings has filed previously with the SEC, such as its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Forward-looking statements speak only as of the date the statements were made. Celsius Holdings does not undertake any obligation to update forward-looking information, except to the extent required by applicable law.

 

CELSIUS HOLDINGS, INC. - FINANCIAL TABLES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)

(Unaudited)

 

 

June 30, 2024

 

December 31, 2023

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

903,210

 

 

$

755,981

 

Accounts receivable-net

 

262,920

 

 

 

183,703

 

Note receivable-current-net

 

1,166

 

 

 

2,318

 

Inventories-net

 

180,669

 

 

 

229,275

 

Deferred other costs-current

 

14,124

 

 

 

14,124

 

Prepaid expenses and other current assets

 

22,900

 

 

 

19,503

 

Total current assets

 

1,384,989

 

 

 

1,204,904

 

 

 

 

 

Property and equipment-net

 

36,282

 

 

 

24,868

 

Deferred tax assets

 

22,727

 

 

 

29,518

 

Right of use assets-operating leases

 

1,507

 

 

 

1,957

 

Right of use assets-finance leases

 

233

 

 

 

208

 

Deferred other costs-non-current

 

241,276

 

 

 

248,338

 

Intangibles-net

 

11,491

 

 

 

12,139

 

Goodwill

 

13,730

 

 

 

14,173

 

Other long-term assets

 

6,653

 

 

 

291

 

Total Assets

$

1,718,888

 

 

$

1,536,396

 

 

 

 

 

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

47,423

 

 

$

42,840

 

Accrued expenses

 

79,633

 

 

 

62,120

 

Income taxes payable

 

5,374

 

 

 

50,424

 

Accrued promotional allowance

 

156,479

 

 

 

99,787

 

Lease liability obligation-operating leases-current

 

729

 

 

 

980

 

Lease liability obligation-finance leases

 

61

 

 

 

59

 

Deferred revenue-current

 

9,513

 

 

 

9,513

 

Other current liabilities

 

13,772

 

 

 

10,890

 

Total current liabilities

 

312,984

 

 

 

276,613

 

 

 

 

 

Lease liability obligation-operating leases-non-current

 

762

 

 

 

955

 

Lease liability obligation-finance leases-non-current

 

228

 

 

 

193

 

Deferred tax liabilities

 

2,201

 

 

 

2,880

 

Deferred revenue-non-current

 

162,471

 

 

 

167,227

 

Total Liabilities

 

478,646

 

 

 

447,868

 

 

 

 

 

Commitment and contingencies (Note 15)

 

 

 

 

 

 

 

Mezzanine Equity:

 

 

 

Series A convertible preferred shares, $0.001 par value, 5% cumulative dividends; 1,466,666 shares issued and outstanding at each of June 30, 2024 and December 31, 2023, aggregate liquidation preference of $550,000 as of June 30, 2024 and December 31, 2023.

 

824,488

 

 

 

824,488

 

 

 

 

 

Stockholders’ Equity:

 

 

 

Common stock, $0.001 par value; 300,000,000 shares authorized, 233,344,377 and 231,787,482 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively.

 

78

 

 

 

77

 

Additional paid-in capital

 

286,173

 

 

 

276,717

 

Accumulated other comprehensive loss

 

(2,363

)

 

 

(701

)

Retained earnings (accumulated deficit)

 

131,866

 

 

 

(12,053

)

Total Stockholders’ Equity

 

415,754

 

 

 

264,040

 

Total Liabilities, Mezzanine Equity and Stockholders’ Equity

$

1,718,888

 

 

$

1,536,396

 

 

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(In thousands, except per share amounts)

(Unaudited)

 

 

For the Three Months Ended June 30,

 

For the Six Months Ended June 30,

 

2024

 

2023

 

2024

 

2023

Revenue

$

401,977

 

 

$

325,883

 

 

$

757,685

 

 

$

585,822

 

Cost of revenue

 

192,879

 

 

 

166,889

 

 

 

366,380

 

 

 

313,010

 

Gross profit

 

209,098

 

 

 

158,994

 

 

 

391,305

 

 

 

272,812

 

Selling, general and administrative expenses

 

114,850

 

 

 

94,181

 

 

 

213,867

 

 

 

163,086

 

Income from operations

 

94,248

 

 

 

64,813

 

 

 

177,438

 

 

 

109,726

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income on note receivable

 

—

 

 

 

28

 

 

 

28

 

 

 

73

 

Interest income, net

 

10,647

 

 

 

5,545

 

 

 

20,259

 

 

 

10,469

 

Foreign exchange loss

 

(264

)

 

 

(931

)

 

 

(633

)

 

 

(1,049

)

Total other income

 

10,383

 

 

 

4,642

 

 

 

19,654

 

 

 

9,493

 

 

 

 

 

 

 

 

 

Net income before provision for income taxes

 

104,631

 

 

 

69,455

 

 

 

197,092

 

 

 

119,219

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

(24,848

)

 

 

(17,946

)

 

 

(39,498

)

 

 

(26,483

)

Net income

$

79,783

 

 

$

51,509

 

 

$

157,594

 

 

$

92,736

 

 

 

 

 

 

 

 

 

Dividends on Series A convertible preferred stock

 

(6,838

)

 

 

(6,856

)

 

 

(13,675

)

 

 

(13,637

)

Income allocated to participating preferred stock

 

(6,289

)

 

 

(3,890

)

 

 

(12,417

)

 

 

(6,898

)

Net income attributable to common stockholders

$

66,656

 

 

$

40,763

 

 

$

131,502

 

 

$

72,201

 

 

 

 

 

 

 

 

 

Other comprehensive (loss) income:

 

 

 

 

 

 

 

Foreign currency translation adjustments, net of income tax

 

(308

)

 

 

(590

)

 

 

(1,662

)

 

 

4

 

Comprehensive income

$

66,348

 

 

$

40,173

 

 

$

129,840

 

 

$

72,205

 

 

 

 

 

 

 

 

 

*Earnings per share:

 

 

 

 

 

 

 

Basic

$

0.29

 

 

$

0.18

 

 

$

0.56

 

 

$

0.31

 

Dilutive

$

0.28

 

 

$

0.17

 

 

$

0.55

 

 

$

0.31

 

 

*Please refer to Note 3 in the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2024, for Earnings per Share reconciliations.

 

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

 

Reconciliation of GAAP net income to non-GAAP adjusted EBITDA

 

 

Three months ended June 30,

 

Six months ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net income (GAAP measure)

$

79,783

 

 

$

51,509

 

 

$

157,594

 

 

$

92,736

 

Add back/(Deduct):

 

 

 

 

 

 

 

Net interest income

 

(10,647

)

 

 

(5,573

)

 

 

(20,287

)

 

 

(10,542

)

Provision for income taxes

 

24,848

 

 

 

17,946

 

 

 

39,498

 

 

 

26,483

 

Depreciation and amortization expense

 

1,418

 

 

 

698

 

 

 

2,648

 

 

 

1,246

 

Non-GAAP EBITDA

 

95,402

 

 

 

64,580

 

 

 

179,453

 

 

 

109,923

 

Stock-based compensation1

 

4,746

 

 

 

5,735

 

 

 

8,309

 

 

 

11,242

 

Foreign exchange

 

264

 

 

 

931

 

 

 

633

 

 

 

1,049

 

Distributor Termination2

 

—

 

 

 

(1,007

)

 

 

—

 

 

 

(3,241

)

Legal Settlement Costs3

 

—

 

 

 

7,900

 

 

 

—

 

 

 

7,900

 

Non-GAAP Adjusted EBITDA

$

100,412

 

 

$

78,139

 

 

$

188,395

 

 

$

126,873

 

___________________________

1Selling, general and administrative expenses related to employee non-cash stock-based compensation expense. Stock-based compensation expense consists of non-cash charges for the estimated fair value of unvested restricted share unit and stock option awards granted to employees and directors. The Company believes that the exclusion provides a more accurate comparison of operating results and is useful to investors to understand the impact that stock-based compensation expense has on its operating results.

22023 distributor termination represents reversals of accrued termination payments. The unused funds designated for termination expense payments to legacy distributors were reimbursed to Pepsi for the quarter ended June 30, 2023.

32023 Legal class action settlement pertained to the McCallion vs Celsius Holdings class action lawsuit, which we settled during the quarter ended June 30, 2023.

USE OF NON-GAAP MEASURES

Celsius defines Adjusted EBITDA as net income before net interest income, income tax expense (benefit), and depreciation and amortization expense, further adjusted by excluding stock-based compensation expense, foreign exchange gains or losses, distributor termination fees, legal settlement costs and certain impairment charges. Adjusted EBITDA is a non-GAAP financial measure.

Celsius uses Adjusted EBITDA for operational and financial decision-making and believes these measures are useful in evaluating its performance because they eliminate certain items that management does not consider indicators of Celsius’ operating performance. Adjusted EBITDA may also be used by many of Celsius’ investors, securities analysts, and other interested parties in evaluating its operational and financial performance across reporting periods. Celsius believes that the presentation of Adjusted EBITDA provides useful information to investors by allowing an understanding of measures that it uses internally for operational decision-making, budgeting and assessing operating performance.

Adjusted EBITDA is not a recognized term under GAAP and should not be considered as a substitute for net income or any other financial measure presented in accordance with GAAP. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of Celsius’ results as reported under GAAP. Celsius strongly encourages investors to review its financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.

Because non-GAAP financial measures are not standardized, Adjusted EBITDA, as defined by Celsius, may not be comparable to similarly titled measures reported by other companies. It therefore may not be possible to compare Celsius’ use of these non-GAAP financial measures with those used by other companies.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240806461910/en/

Paul Wiseman Investors: investorrelations@celsius.com Press: press@celsius.com