Celsius Q3 Revenue Hits Record as Margins Narrow

Celsius Holdings (CELH) reported record third-quarter revenue of $847.2 million, up 17% from a year earlier, as North American sales increased and international markets posted strong growth. However, lower gross margin and operating leverage weighed on adjusted results, with adjusted EBITDA declining 3% and adjusted diluted earnings per share slipping 2%.

Revenue in North America rose 15% to $806.2 million, while international revenue increased 78% to a record $41.0 million. The comparison includes the effects of Celsius’ acquisitions of Alani Nu on April 1, 2025, and Rockstar Energy in the U.S. and Canada on Aug. 28, 2025.

The company’s U.S. ready-to-drink energy portfolio generated $1.65 billion in tracked retail sales during the 13 weeks ended Sept. 27, an increase of 15% year over year. Its portfolio held approximately 21% of the U.S. market by dollar sales, ranking third in the category, according to Circana data cited in the presentation.

Celsius said its portfolio accounted for about 28% of the zero-sugar U.S. energy category’s $773 million of growth during the quarter. Alani Nu’s limited-time Witch’s Brew product generated more than $130 million in retail sales, making it the largest limited-time offering in Celsius Holdings’ history. Alani Nu reported combined revenue of $410 million for the quarter, while its U.S. ready-to-drink energy revenue grew 29% year over year. Circana-tracked Alani Nu retail sales increased 58%, though the company said the reported revenue growth rate also reflected distribution mix and approximately $9 million of PepsiCo captaincy amortization.

Margins Narrow Despite GAAP Profit Swing

Gross margin fell to 46.8% from 51.3% a year earlier, a decline of 450 basis points. Adjusted EBITDA decreased to $198.6 million from $205.6 million, while adjusted EBITDA margin contracted to 23.4% from 28.4%.

GAAP net income was $127.0 million, compared with a $61.0 million net loss in the prior-year quarter. Net income attributable to common shareholders was $99.5 million, versus a loss of $70.7 million. Diluted earnings per share were $0.39, compared with a loss of $0.27 per share.

The sharp improvement in GAAP results was affected by distributor termination expenses, which totaled $3.5 million in the latest quarter compared with $246.7 million a year earlier. On an adjusted basis, diluted earnings per share were $0.41, down from $0.42.

For the first nine months of 2026, revenue rose 36% to $2.45 billion. North American revenue increased 36% to $2.34 billion, and international revenue grew 47% to $103.6 million. Adjusted EBITDA advanced 19% to $578.3 million, though the year-to-date adjusted EBITDA margin declined to 23.6% from 27.1%. Adjusted diluted earnings per share increased 8% to $1.19.

Distribution and Organizational Priorities

Celsius said year-over-year order growth trailed Circana scan growth by approximately six percentage points during the quarter, primarily because of inventory rebalancing within PepsiCo’s direct-store-delivery network. The difference indicates that consumer retail sales and orders into the distribution system did not move at the same rate during the period.

The company also highlighted a new brand-led organizational structure in the U.S. and related leadership appointments. Management said the changes are designed to sharpen commercial focus, support faster execution and help accelerate growth across the Celsius, Alani Nu and Rockstar Energy portfolio.

Celsius continues to position international expansion as a growth priority, targeting established energy-drink markets including Britain, Australia, France, the Netherlands, Belgium, Canada and several other European markets. The presentation did not provide formal revenue or earnings guidance.

The company said future performance remains subject to risks including the effectiveness of its new organizational structure, its commercial arrangements with PepsiCo, international execution, acquisition integration, competitive pressures, regulation, litigation and broader economic conditions. Celsius also cautioned that failure to realize expected acquisition benefits could negatively affect its financial condition and operating results.