In the third quarter of 2025, Celsius Holdings achieved over 20% share of the U.S. energy drink market, growing 31% year-over-year. The portfolio generated more than $5 billion in retail sales. Strong retailer partnerships and consumer demand drove double-digit growth in major retailers like Target, Walmart, and CVS. Alani Nu saw triple-digit growth at 115% year-over-year.
Celsius Holdings’ success is driven by organic growth and strategic expansion, doubling their energy drink market share in just 2 years. Brands like Alani Nu, Witches Brew, and Rockstar are defining a modern energy company with culturally relevant offerings. Strong marketing campaigns like Celsius Live Fit Go are boosting brand awareness and driving consumer engagement.
At the National Association of Convenience Stores Trade Show, Celsius Holdings received positive feedback on their portfolio, signaling confidence for future growth in 2026. The company continues to invest in its people and culture, hosting events like Celsius University Summit to engage with the next generation of marketers and leaders. New leadership appointments bring decades of experience to complement the existing team.
Celsius Holdings is scaling its global functional beverage portfolio, with successful performance in markets like Australia and the U.K. The company is refreshing its product lines with limited-time offers like Spritz Vibe and Winter Wonderland to drive consumer excitement and brand growth. Plans are in place to stabilize and grow the Rockstar Energy brand for the next generation of consumers.
Looking ahead to 2026, Celsius Holdings is focused on disciplined growth, collaboration, and excellence. The company aims to reach more consumers across various occasions with its diverse portfolio. With a commitment to purposeful growth and strong partnerships, Celsius Holdings is poised for continued success in the energy drink market. In the quarter ended September 30, 2025, Celsius Holdings reported consolidated revenue of approximately $725 million, up 173% from the previous year. The Celsius brand saw a 13% growth rate in U.S. scanner data, driven by product mix and distribution point increases. Various factors can cause scanner data variations, such as promotions and timing of customer orders.
The revenue growth rate for Celsius was 44%, higher than the U.S. scanner growth rate of 13%, due to inventory movements and increased promotional activities. Alani Nu revenue doubled, with a 99% increase, driven by limited time offerings like Witches Brew. Rockstar Energy contributed around $11 million in revenue in its first month under Celsius ownership.
Rockstar Energy contributed approximately $18 million in revenue in Q3, with $7 million recorded in other income due to accounting treatment. Year-to-date, consolidated sales increased by roughly 75%. Gross margin for the quarter was 51.3%, up from 46% last year, reflecting improvements from various factors.
Celsius Holdings recorded approximately $247 million in distributor termination expenses related to Alani Nu transitioning into Pepsi’s DSD network, funded by PepsiCo under a long-term agreement. General and administrative expenses remained controlled at about 6% of sales. Operating income benefited from higher margins and overhead efficiency.
The company ended the quarter with a strong balance sheet and cash position, reducing debt by $200 million and interest rate expenses by $20 million annually. Future priorities include investing in brand growth, capturing acquisition synergies, and reducing debt. The company expects continued growth in Celsius and Alani Nu.
Looking ahead, Celsius anticipates a noisy Q4 due to year-end timing effects and integration activities. Gross margins may face pressure from promotions, higher scrap, and integration-related costs. Sales and marketing expenses are expected to represent 23-25% of sales in Q4. The company aims to balance investment with profitability and create long-term shareholder value. In a recent earnings call, Celsius Holdings discussed the factors contributing to a wide variance in reported growth rates. Factors such as mix changes, promos, and timing impacted the numbers, with Q2 benefiting from Prime Day buildup. Despite the noise, scanner growth was at 13%, exceeding category growth rates.
Celsius is closely monitoring pricing strategies amidst headwinds like tariff impacts and higher commodity costs. A revenue management team is being built to enhance capabilities, exploring various pricing and promotional strategies. While no formal announcements have been made, opportunities for price adjustments are being considered.
Regarding Q4 timing and integration issues, Celsius is phasing in activity in December due to the proximity to resets and OTS programs. The integration with Pepsi began on December 1, replacing Bang and requiring a more strategic approach to filling space. Alani’s rollout will extend into Q1, with careful inventory management and planogram control. PepsiCo is focusing on expanding market penetration and optimizing warehouse and distribution to enhance product offerings. The transition may impact inventory levels and lead to increased logistical costs. The company anticipates a noisy quarter with puts and takes affecting performance. The return pickup process and inventory management are key areas of focus for the team.
There may be margin pressure due to increased logistical movements and costs associated with returns. Optimization of supply chain processes, including co-packing facilities and logistics, is essential for efficiency. The company aims to run 1-day hauls to optimize freight lanes and ensure inventory is strategically placed across the U.S. Inventory levels and returns will also impact margins.
PepsiCo is cautious about potential sales reductions and net drag from return pickups. The company is evaluating year-end orders and monitoring the return pickup process closely to manage potential impacts on sales and inventory levels efficiently. The team aims to replicate the success of managing similar processes in the past and navigate the challenges effectively in the current scenario.
Questions regarding inventory levels and Alani growth trends are being addressed by analysts. Sequential changes in PepsiCo’s inventory levels and the growth trajectory of Alani are being monitored closely. The company remains focused on managing inventory effectively and sustaining growth in key product lines. In the second quarter, there were two incremental LTOs, with one being large. The growth rate for Alani going forward is expected to be strong, with successful launches like Witches Brew and Winter Wonderland driving sales. Retailers are excited about the brand’s unique offerings and increasing female consumption rates, with plans to leverage PepsiCo’s distribution network for further growth.
The inventory rollover for LTOs like Spritz Vibe and the impact on gross margins, including tariffs and inflation on the Midwest premium, are areas of opportunity for improvement. While there have been some impacts on gross margins, the company is focused on integrating Alani and Rockstar efficiently, considering options like hedging and increasing purchasing power to mitigate these challenges.
The company is evaluating long-term hedging strategies and working on offsetting tariff impacts with scale and synergies from bringing Alani into production. Q4 is expected to see larger tariff impacts, but efforts to leverage production and distribution capabilities are underway to navigate these challenges and drive profitability. The company plans to add a second line to enhance capabilities and drive efficiencies by 2026. Tariffs will impact Q3 and Q4, but integrating Alani will improve margins. Despite tariffs, there is still a chance to reduce pricing. New tactics and programs aim to save on raw materials and freight. Margins are expected to improve by the first half of 2026. International expansion is a priority, with investments in key markets like Australia. Alani Nu’s distribution is expected to ramp up, potentially reaching the level of Celsius in the market. Collaboration with PepsiCo aims to avoid inventory optimization issues seen in the past. Celsius (CELH) reports increased connectivity with Pepsi, leading to better product placement and inventory management. Alani brand performing well in convenience stores, with plans for further expansion in key accounts. The company sees growth opportunities in food service and energy drinks category. Strong Q3 results reflect positive transformation and market positioning for future success. 1. In a major breakthrough, scientists have discovered a new species of dinosaur in Argentina. The newly identified species, named Llukalkan aliocranianus, is believed to have lived around 80 million years ago. With a unique skull shape and sharp teeth, this carnivorous dinosaur is shedding new light on the prehistoric world.
2. The US economy added 266,000 jobs in April, falling short of the expected 1 million jobs. The unemployment rate rose slightly to 6.1%, despite widespread predictions of a decline. The disappointing job growth has raised concerns about the pace of the economic recovery post-pandemic.
3. A new study has found that the Pfizer-BioNTech COVID-19 vaccine is highly effective against the Indian variant of the virus. The vaccine was found to be 88% effective against symptomatic disease caused by the variant two weeks after the second dose. This offers hope in the ongoing battle against COVID-19.
4. SpaceX successfully launched and landed its Starship prototype, SN15, in a test flight in Texas. The rocket reached an altitude of 10 kilometers before returning to Earth and landing safely. This marks a significant milestone for SpaceX as it continues its efforts to develop a fully reusable spacecraft.
5. The European Union has announced plans to reopen its borders to vaccinated travelers this summer. The EU is proposing a “Digital Green Certificate” that will allow vaccinated individuals to travel freely within the bloc. This move is aimed at reviving the tourism industry and facilitating cross-border travel.
Read more at Yahoo Finance: Celsius (CELH) Q3 2025 Earnings Call Transcript