Celsius Holdings’ Record Quarter and Margin Roadmap

Celsius Holdings ((CELH)) has held its Q1 earnings call. Read on for the main highlights of the call.

Celsius Holdings’ latest earnings call struck a decidedly upbeat tone as management highlighted record first-quarter revenue, sharply higher profits and meaningful synergies from the Alani acquisition. Executives acknowledged cost pressures in aluminum and freight and some temporary disruptions from SKU rationalization and integration work, but stressed that portfolio momentum, market share gains and disciplined capital allocation leave the company on a strong trajectory.

Record First Quarter Revenue

Celsius delivered record first-quarter revenue of $783 million, underscoring the combined strength of its energy drink portfolio and execution at retail. Management emphasized that this top-line performance reflects both organic momentum and early benefits from its recent acquisitions.

Strong Brand-Level Performance

Brand Celsius posted net sales of $348 million, growing about 6% year over year and maintaining its position as a core growth engine. Alani Nu contributed $368 million in net sales with reported growth near 60% and pro forma scanner gains as high as 85%–100%, while Rockstar added $67 million as its integration and stabilization continue.

Portfolio Market Share Expansion

The combined portfolio continued to gain ground, with dollar share reaching roughly 20.9% in the four weeks ending April 12. That level means about one in five U.S. energy drinks sold in tracked channels now comes from the company’s brands, a powerful signal of competitive momentum.

Significant Profitability Improvement

Profitability moved sharply higher, with GAAP net income rising to $110 million from $44 million a year earlier, more than doubling. Adjusted EBITDA climbed to $195 million, up about $125 million year over year, driving an adjusted margin expansion to 24.9% from 21.2%, a roughly 370 basis point improvement.

Gross Margin and Operating Leverage Progress

Gross margin reached about 48.3% in the quarter, up roughly 90 basis points versus the prior quarter despite volatile input costs. Adjusted SG&A fell to approximately 26.4% of revenue from 31.8% in the fourth quarter, reflecting tighter cost control and operating leverage as the business scales.

Integration Synergies Realized

Management reported that the Alani Nu integration is complete and has delivered roughly $50 million in synergies, helping fuel both revenue and margin gains. Rockstar’s integration is slated for completion in the first half of 2026, with SKU transitions and resets largely finished even as the brand remains in a stabilization phase.

Successful Innovation and SKU Optimization

Limited-time offerings continued to be a key lever, with Alani’s Lime Slush flavor becoming the top-selling product in tracked channels following earlier success from Cherry Bomb. Celsius is also pushing fizz-free extensions and new LTOs like Electric Vibe, while SKU optimization is improving item-level velocities even as it temporarily dampens headline growth.

International Expansion and Infrastructure

The company is extending its footprint abroad, launching Celsius in Spain through a partnership with Suntory and planning Portugal next. A new global headquarters in Dublin has been established to support this international expansion and provide a hub for future growth initiatives.

Capital Allocation and Share Repurchase

Celsius continued to return cash to shareholders, repurchasing about 700,000 shares for $24.1 million at an average price of $35.39. With $236.1 million still available under its $300 million buyback authorization, management reiterated that its capital priorities remain investing in brands, maintaining a healthy balance sheet and returning excess capital.

Strategic Partnerships and Marketing Momentum

Marketing efforts are intensifying, highlighted by a multiyear global partnership with the Aston Martin Aramco Formula 1 team designed to elevate brand visibility. The company is also leaning into music festivals and motorsports through collaborations with Palm Tree, Breakaway and entities like Formula DRIFT and 23XI Racing to drive awareness and trial ahead of the summer season.

Input Cost Pressures

Despite the gains, management flagged rising aluminum costs, including higher Midwest premiums and London Metal Exchange pricing, along with elevated freight, fuel and resin expenses. These headwinds could delay the company’s progress toward gross margins in the low-50s and may alter the pace of margin expansion over the coming quarters.

Q2 Margin ‘Sidestep’ and Timing Uncertainty

Celsius expects a “sidestep” in margins in the second quarter, with levels roughly flat versus the first quarter before a planned stair-step improvement in the back half of the year. The ultimate timing of achieving low-50% gross margins will depend heavily on commodity trends, leaving some uncertainty around the exact trajectory of margin recovery.

Growth Moderation and SKU Rationalization Impact

Management acknowledged that Celsius brand growth has moderated as the company juggles SKU rationalization and distribution expansion. Because these changes are staged over multiple quarters, there are periods where SKU reductions outpace gains in all-commodity volume, creating temporary trade-offs in topline growth.

Rockstar Integration and Stabilization Challenges

Rockstar remains firmly in a stabilization year, with integration work and inventory rebalancing creating extra freight and transition-related costs. While SKU transitions and resets are largely complete, full benefits are not expected until 2026 when integration is scheduled to wrap up in the first half of that year.

Alani Growth Metrics and Revenue Complexity

Alani’s performance metrics are robust but complicated by mix and accounting factors, with scanner data showing around 100% growth, adjusted to about 85% on a pro forma basis. Reported revenue grew roughly 60% due to differences between direct-store-delivery and direct sales, contributions from non-U.S. markets and non-cash amortization that affects comparability.

Weather-Related and One-Time Costs

Severe winter weather in parts of the Northeast added incremental freight and freeze-protection expenses in the quarter, partially offsetting gross margin improvements. Management suggested that many of these one-time costs are now behind the company, but they still weighed on reported results and contributed to near-term pressure.

Forward-Looking Guidance and Outlook

Looking ahead, Celsius expects the second quarter to build on recent resets with additional Celsius and Alani innovation and heightened summer marketing activations. Management views 2026 as a key stabilization year for Rockstar, sees gross margins moving from around 48.3% toward the low-50s as a new manufacturing line ramps in late 2026 and 2027 and plans to maintain disciplined capital deployment anchored by the current portfolio share near 21%.

Celsius’ earnings call painted a picture of a company balancing rapid growth with integration and cost challenges, but with clear momentum across brands and markets. Record revenue, expanding margins and strong share gains underpin a generally optimistic outlook, while investors will be watching execution on cost control, SKU rationalization and Rockstar stabilization as key determinants of future upside.