Celsius Holdings ((CELH)) has held its Q1 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Celsius Holdings reflected a mixed sentiment. While the company celebrated significant achievements such as the acquisition of Alani Nu and successful international expansion, challenges were evident with a decline in revenue, increased expenses, and a drop in adjusted EBITDA. However, improvements in gross margin and a robust cash position offered a positive outlook.
Alani Nu Acquisition and Growth
Celsius Holdings successfully closed the acquisition of Alani Nu, marking a strategic expansion of its portfolio with a second $1 billion brand. Alani Nu’s retail sales surged by 88% year-over-year, capturing a 5.3% market share, which is an increase of 221 basis points. This acquisition is expected to bolster Celsius’s market position significantly.
International Expansion Success
The company reported a 41% increase in international revenue, reaching $22.8 million. This growth underscores strong organic expansion in both legacy and new markets, including the UK, Ireland, France, Australia, and New Zealand, highlighting Celsius’s successful global strategy.
Gross Margin Improvement
Celsius Holdings achieved a gross margin expansion of 110 basis points to 52.3%. This improvement was driven by sourcing efficiencies for raw and packaging materials, reflecting the company’s focus on operational efficiency.
Strong Cash Position
As of March 31, 2025, Celsius Holdings reported a strong cash position with $977 million and no outstanding debt. This financial stability provides the company with flexibility to pursue further growth opportunities and investments.
Revenue Decline
The first quarter revenue totaled $329.3 million, marking a 7% decline compared to the prior year. This decrease was attributed to slowed velocity, changes in the US distributor incentive program, and increased retail promotional activities.
Increased SG&A Expenses
Selling, general, and administrative expenses rose to $120.3 million from $99 million in the previous year. This increase was due to transaction-related costs from the Alani Nu acquisition and continued investments in global sales, marketing, and organizational infrastructure.
Decline in Adjusted EBITDA
Celsius Holdings reported a non-GAAP adjusted EBITDA of $69.7 million for the quarter, representing a 21.2% margin, down from $88 million and a 24.7% margin in Q1 2024. This decline reflects the challenges faced in maintaining profitability amidst increased expenses.
Forward-Looking Guidance
Looking ahead, Celsius Holdings provided insights into their strategic plans for sustained growth. Despite a 7% revenue decline, the company achieved a gross margin expansion and plans to leverage the Alani Nu acquisition to enhance its presence in the energy drink category. With a focus on new product innovations, increased retail shelf space, and strong retail partnerships, Celsius aims to drive growth in 2025 and beyond, emphasizing operational excellence and international expansion.
In summary, the earnings call for Celsius Holdings presented a mixed picture, with notable achievements in acquisitions and international growth, contrasted by revenue and EBITDA declines. The company’s strong cash position and gross margin improvements offer optimism for future growth, as they continue to focus on strategic expansions and operational efficiencies.