Q2 2025 Celsius Holdings Inc Earnings Call

My time took my.

Now I'm back on my feet. It doesn't matter, and it will still survive.

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Don't lose your.

Dreams of the past, you must fight.

Fight fight.

Good morning and welcome to the Celsius holding second quarter 2025 earnings webcast. All lines have been placed on mute to prevent any background noise.

After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad,

Thank you. I'd now like to hand the call over to Paul wizman investor relations. Please go ahead. Good morning, and thank you for joining Celsius holding second quarter 2025 earnings webcast with me today are John fieldly, chairman and CEO Jared, langan's Chief Financial Officer and Toby. David Chief of Staff. We'll take questions following the prepared remarks.

Our second quarter earnings press release was issued this morning with all materials available on our website, IRS Celsius, Holdings, inc.com. And on the sec's website, sec.gov and audio replay of this webcast will also be accessible later today.

Today's discussion includes forward-looking statements based on our current expectations and information. These statements involve risks and uncertainties, many of which are beyond the company's control.

Celsius Holdings. Disclaims any duty to update forward-looking statements except as required by law?

Which contain additional information and a description of risks that may result in actual results. Differing materially from those contemplated, by our forward-looking statements,

We present results on both a gaap and non-gaap basis. Non-gaap measures like adjusted evida adjusted. Eva margin, adjusted diluted earnings per share and their Gap. Reconciliations are detailed in our Q2 earnings release and non-gaap financial measures should not be used as a substitute for our results. Reported in accordance with gaap with that, I'll turn it over to John.

Good morning, and thank you for joining us. Q2 was a strong quarter for Celsius Holdings and for the energy category at large.

Among beverages energy is outperforming with over 15% year-over-year, retail sales growth.

With tail Wings, coming from new to category, consumers drawn to functional, zero sugar Innovation and increasingly Great Value among beverage choices.

Celsius Holdings, delivering, meaningful strength. Across our portfolio in the second quarter led by standout performance from the newly acquired. Alani Nu brand and continued positive momentum from our core Celsius brand.

For the 13th. Ended June 29th. Total Celsius Holdings. Retail sales, grew 29% and volume increased 31% reflecting broad-based consumer demand and strong execution at retail.

Celsius, Holdings, reported revenue of 739.3 million for the second quarter ending June 30th 2025. The 84% year-over-year, increase in Revenue was primarily driven by 301.2 million in revenue, from the ilani, new brand, the Celsius. Brand contributed 438.1 million of Revenue in the quarter.

Q2 Consolidated, gross margin held relatively steady at a 51.5% down, 50 basis points year-over-year. Despite incorporating Aulani news, lower margin profile, beginning in the second quarter.

Overall gross margin was supported by favorable material cost and improved production yields. Leverage gains through our vertical integration initiatives and strong product and channel mix

Looking toward the back half of this year. We expect margin pressure associated with higher inputs costs which Jared will discuss further on the call.

Adjusted ibida was a record in excess of $200 million in Q2 of 2025.

we are very pleased with the strong growth of Alani Nu and the pace of our integration with the teams and operations that Celsius Holdings, acquired in the transaction, which closed on April 1st of this year,

Our Focus today remains on delivering, excellent customer service and supporting a robust distribution, growth and innovation.

As we noted in our Alani Nu modeling, call held in may we expect to achieve 50 million of run rate cost synergies.

Over 2 years post-closing.

Contributing to strong proforma, profitability and significant cash flow generation.

Celsius Holdings performance to the first half of the year was driven by strong execution across Innovation, marketing, retail activations and operational. Discipline. We stay close to the consumer remain focused on building brand equity and work hard to deliver value to our Retail Partners and consumers.

Our team continued to operate with great focus and intention.

We don't take growth for granted, and that mindset carries us through the first half of this year and positions us well for the back half of 2025 and beyond.

I'll turn the call over to Jared shortly to walk through the financials in more detail. But first, I want to talk more about what drove the quarter, how we showed up in Market, what we're seeing across Our Brands and channels and where we're going from here.

Consumers today are making more intentional, beverage choices, reaching for a functional. Better for you products that fit their active and wellness lifestyles.

The shift to zero-sugar functional energy drinks is fueling one of the fastest-growing segments in beverages, and Celsius Holdings is defining it.

Recent industry, reports pointed to you double digit category growth in 2025, with momentum coming from new to category consumers.

Namely females gen Z and the growing number of consumers who are switching to functional energy drinks from other energy sources, like RTD cold coffee among them.

Younger more diverse consumers are now leading the growth.

And brands that resonate with Gen Z and women like Celsius and Alani Nu are gaining share and building loyalty.

The Celsius Holdings portfolio is reached at 43% household penetration with the Celsius brand at 34% and the ilani. New brand at 22% household penetration with repeat rates over 65%.

and on the retail side,

Celsius Holdings portfolio among the most likely to gain, share confidence were backing up with strong execution in the market.

And tracked us channels the Reddit drink energy category, grew 15.2% year-over-year in the second quarter with unit growth of 13.5%.

While Celsius Holdings outpaced the category across nearly every key retail metric, dollar sales grew by 28.9%, nearly double the category. Unit sales increased by 31.2%. Total points of distribution and items per store both rose roughly 23%, and velocity increased by 20% quarter-over-quarter.

For the last 13 weeks. And in June 29th Celsius, Holdings. Achieved a 17.3% dollar, share and RTD energy category.

A 180 basis point increase versus the prior period.

The Celsius brand delivered resilient growth in the second quarter, growing unit, sales 6.1% and dollar sales by 3% to achieve a 11 Point share for the 13th. Ended June 29th

And the ilani brand had a breakout quarter dollar sales, Rose 129%, but share up 3.2 points. Year-over-year, making it the largest share gainer, in RTD energy and reaching a 6.3 share for the 13th. Ended June 29th.

The Celsius Holdings portfolio. Also recently surpassed a key retail Milestone achieving 4 billion in the past 52, weak retail sales and track channels for the period ending July 20th, 2025 a major Milestone. That's more than the next 8. RTD energy Brands combined in the same period. A clear signal of the category of momentum were leading and the demand Our Brands have generated.

Innovation continues to be a core driver of growth, and both brands are delivering meaningful results in Q2.

Alani Nu showed extraordinary strength and innovation in the second quarter, led by Sherbet Swirl and Cotton Candy.

Which drove sales incrementality across the business.

Alani Nu cotton candy set sales records, and it's debuted at Walmart by orders of magnitude. Alani Nu consumers are already buzzing about the recent arrival of Alani Nu Witches Brew, which this year is accompanied by another great LTO.

Punking cream in Portland, growth, wasn't limited. The new items Aulani news. Core skus are sustaining strong velocity and retention evidence that this is a brand of staying power. Brand loyalty data across the category. Shows Celsius and ilani Brands our clear standouts particularly among gen Z and female consumers. The Celsius brand delivered strong innovation in Q2 with the release of 2 great refreshing f-free flavors in.

Including pink lemonade and dragon fruit lime.

Consumer insights guide, our Innovation and the introduction of these 2 new flavors feeds into strong consumer demand for more great tasting zero. Sugar Fizz, free energy.

The Celsius brand also continues to build scale in Ecom contract channels, and food service.

The Celsius brand was the number one trademark in the RTD energy category on Amazon during the summer Prime Day event, with an 18.4% share for the week ending July 12.

With sales led by a variety packs and top performing flavors.

Elani, the new brand, jumped to a 10.9% share on Amazon during the Prime Day event for the week ending July 12th, up from 6.5% the prior week.

Celsius Food, Service volume grew 9.8%. Year-over-year in the. Second quarter representing approximately 12% of our North. America Celsius brand sales to PepsiCo

Distribution and activation continues to expand particularly in lodging Recreation, health care and Quick Serve restaurants.

International Revenue, grew 27% year-over-year in the second quarter with strong contributions from Australia, the UK and France.

These are still early days, but our approach is resonating lead with brand and best in localized. Execution, and scale with discipline internally. We're building our capabilities to support this growth and systems supply chain analytics, and operations in July. We welcome. John Cole, an Executive Vice President of technology to help us. Strengthen cross functional connectivity, and scale our infrastructure for a multi-brand Omni Channel future. John's 30-year career in technology spans name brands, like Fanatics, Philip Morris and 0.72, among others.

We continue to invest in brand awareness, touching more people and more places. More often focusing on driving trial and loyalty.

We launched the next wave of our live fit. Go marketing campaign.

Our most ambitious creative yet, connecting purposeful energy to real-world action. Early results are strong, with Rising at 80, awareness and positive feedback from retailers.

The Celsius brand also activated a key cultural moments like F1 Miami the CMA Fest and the Breakaway Festival while Alani Nu expanded its reach through influencer engagement and lifestyle Partnerships.

Looking ahead. We're excited to abuse Celsius. First National TV commercial during NFL broadcast. This fall a major milestone

We're also collaborating for country music, store Kelsea, ballerini on branded content. That reinforces our growing connection and connectivity with female consumers.

We're proud of how our team executed our growth strategy to reach more people and more places and more often in the second quarter and how our Brands continue to Lead 1 of the most dynamic categories and beverage

The Celsius and Alani Nu brands are driving growth. Gaining share staying relevant with the next generation of modern energy drinkers.

With that, I'll turn the call over to Jared for more details around our financial results for the quarter and the first half of the year.

Jared.

Thanks John and good morning everyone. We delivered strong financial results in the second quarter with meaningful contributions from both the Celsius and Alani Nu brands.

Let's walk through the numbers.

Starting with Q2 2025 financial highlights for the three months ended June 30, 2025, revenue totaled $739 million, up 84% from the prior year period.

Growth was led by 301 million of revenue from Alani Nu, which delivered record results, fueled by strong limited time offer sales of their sherbet swirl and cotton candy and continued growth in the Brand's core flavors.

Celsius brand Revenue, increased 9% year-over-year supported by a velocity improvements and expanded distribution.

Scanner data showed approximately 3% sales growth, as our reported results benefited from a favorable comp from the prior year and inventory movement at our largest distributor.

Gross profit increased to 381 million compared to 209 million for the year ago. Period with Consolidated gross margin of 51.5% compared to 52% last year

The margin reflects lower ingredient costs, stronger production yields, and favorable, mix partially offset by Aulani news. Structurally, lower margin, and the impact of 21.7 million in purchase accounting, inventory, Step Up,

That said, Alani, Nu growth margin improved, sequentially driven by cost efficiencies and product mix.

For both brand Celsius and ilani. We saw some favorable mix impacts in areas such as Channel, mix and product mix, but most impactful with Savings of raw materials and Freight

with that said, our inventory is recorded on a fifo or first in first out basis and as a result, we did not see a material impact from tariffs in the second quarter.

we would expect tariffs to impact the overall margin profile through increased costs across our raw materials in Q3 and Q4

Moving to operating expenses and profitability sales and marketing expenses, were 152 million or 20.5% of Revenue. In the second quarter benefiting from some outsized growth relative to the timing of Investments made in the quarter.

as we look to the back half of the year, we will continue to support the brand with increase investment relative to the second quarter, including further investments in our live fit, go campaign summer promotions and increased retail activation

As always will remain agile in managing spend.

We continue to build organizational capability during the quarter with new hires and field Sales brand marketing, and customer experience all critical to executing our commercial priorities in Q2 and Beyond.

GNA expenses, were 86 million or 11.7% of Revenue compared to 6% last year.

The increase was primarily driven by 16 million in acquisition related costs and 13.8 million related to the contingent consideration associated with the earnout.

Let me provide a little color on the contingent consideration.

In connection with the acquisition of Alani, Nu the company recorded a liability at fair value for the contingent consideration. Potentially payable to the sellers of Alani Nu subject to achievement of certain 2025. Net sales targets with a maximum payment of 25 million.

The fair value of the liability was estimated using discounted future cash flows based on a probability-weighted.

Expected return methodology.

As of June 30th, 2025 the contingent consideration. Was remeasured to the maximum 25 million payout driven by the outperformance of Aulani news Revenue results for the 3 months, ended June 30th, 2025 relative to the initial Financial projections as of the closing date and a resulting revised upward forecast for the remainder of the calendar year.

On to net income. Net income was $99.6 million for the second quarter of 2025, as compared to $79.8 million for the second quarter of 2024. Net income attributable to common shareholders for Q2 was $85.7 million, or $0.33 per diluted share, compared to $66.7 million.

Adjusted diluted EPS was 47 cents per share, compared to 28 cents per share in the prior year.

Adjusted, Evita increased 109% to 210 million compared to 100 million dollars in the prior year.

Now, let's take a look at your to date.

For the 6 months of 2025 Revenue totaled 1.07 billion up 41% year-over-year.

Revenue reached 1.02 billion dollars up 41% in International Revenue grew 33% to 48 million.

Gross margin for the first half was 51.8% up from 51.6% last year, driven by lower input costs. Improved production yields and mix partially offset by aligning. These gross margin structure and inventory step-up

Sales and marketing expenses for the first half, were 232 million or 21.8% of Revenue down from 22%. In the prior year GNA totaled, 125.8 million or 11.8% of Revenue versus 6.2% last year with the increased primarily driven by transaction related costs. And the previously mentioned earnout adjustment

non-gaap adjusted, Eva increased 49% to 280 million compared to 188 million in the first half of 2024,

Gaap net income for the first half was 144 million with net income attributable, to Common shareholders of 119.9 million or 48 cents per diluted. Share versus 555 cents last year.

Adjusted diluted EPS was $0.65 per diluted share compared to $0.55 per diluted share. Even with the increase in share count from the ilani new acquisition.

Moving to the balance sheet and capital structure. We ended the quarter with 615 million in cash, providing flexibility to support our Innovation pipeline, International expansion and other long-term growth initiatives, as well as debt reduction.

as of June 30th total debt outstanding, consisted of the 900 million Term Loan used to fund a portion of the ilani, new acquisition,

And our revolver remains undrawn.

Looking ahead, we remain focused on profitable growth, and operational discipline with that. I'll turn it back to the operator for questions.

Thank you at this time. I would like to remind everyone that in order to ask a question, press star and the number 1 on your telephone keypad. Please limit yourself to 1 question only.

Your first question comes from the line of Peter grow with EBS. Your line is open.

Thanks operator and good morning everyone. Um, so, obviously the the Top Line performance was was outstanding, but I was hoping to get some color on gross margin both in the quarter. But also, just how to think about the path from here. You know, back in May, you outlined gross margin in the range of 47 to 49%, but this came in nicely ahead of that and after backing out, the inventory adjustment was even stronger. So can you maybe unpack the drivers of the better performance in the quarter um how it compared versus your expectations and then just on the path forward you mentioned the impact from Terrace was not significant in the quarter. But can you maybe give us a sense for how we should be thinking about the gross margin trajectory from here? Given the in

Increases in aluminum in the midwest premium. Thanks. Thanks Peter. Yeah, we had a phenomenal quarter Topline came in extremely strong, especially on the with the ilani portfolio. Um, and as we talked about, in the prepared remarks, um, some of the new flavor launches the ltos with cotton candy, um, and the slush just, uh, did extremely well, but in regards to the gross profit margin, I'll turn it over to Jared for more color on some of those drivers Jared

Yeah um again to just like John said, let me read re re re reiterate hats off to the operations and Commercial teams. You know across Celsius salani and Congo as well with the TSA that we're working with them on.

You know, it was a great quarter. I think we're, we're pacing. Well ahead of obviously, what we modeled in and you can see very strong margins coming through uh, in terms of how those breakdown for Q2 uh,

Tosas. Those end up tend to be from a cogs perspective and an overall perspective higher margin products. So when those things take off they do provide a benefit to the margin. Uh, they've got longer runs and you typically don't see, promos, uh, or a lot of promos on those. So, from a net perspective, they're, they're creative. Uh, we saw a good mix as well. So the RTD component of the portfolio within Aulani, uh, way outweighed, anything else within the portfolio and the RTD portfolio or portion of the portfolio is a higher margin, uh, product. And then we saw from an operations perspective. We saw some Freight savings, uh, and some raw material savings pacing ahead of, uh, expectations. So, great job to them to really start driving those, uh, really as soon as we kind of hit the ground, so hit the ground running. Uh, so all in all great job. Uh, from a Aulani perspective for Celsius, we saw, uh, some savings as well. Cross raw materials are scrap. Rates are, are at some of the lowest levels we've seen in years. Uh, and then

we did benefit from some mix in terms of the channels that we're seeing outside growth above that 9%, that we noted in the, in the script and the press release. So, uh, great quarter overall. Um, and, you know, lots of good things happening. Also, we talked about fifo and talked about in, in the last quarter price. Locks we had for a good part of the year, um, that help with the aluminum. So, all those things benefited Us in the quarter. Uh, we had 51.5% margin obviously. Uh, if you add back, the inventory step.

Buffets, it's even above that. It's a, you know, we're looking at more of a 54 or 54 plus margin from that perspective, uh, look into Q3 and Q4, um, I'll do my best to not have everyone kind of get over their skis on, on the results. So let's kind of look at the fifo and the price locks, uh, obviously first and first out, we'll probably have some benefit in Q3, uh, still from fifo. Uh, with some inventory coming in that wasn't significantly impacted by aluminum tariffs. Uh, so that's a, you know, that'll help you through. We also have some price locks across the back half of the Year, that'll be helpful. Um, but we'll, we'll see some, um, tariff on me and aluminum, uh, increases across raw materials.

Uh, it's hard to Peg it with the tariffs kind of changing weekly uh, as well as the the lame and aluminum changing on a weekly basis. Uh, clearly we're we're up above the model that we showed, um,

And above the 50% that I kind of flagged for Celsius last quarter, uh, where will land between kind of that 50 to 54 number? I think we're, we're comfortable saying we're going to be low 50s. Um,

As things are today, if nothing changes. Um, but with that said, it's up to us to do better and and to drive those costs initiatives to, to be above that expectation. Yeah. And I I think with the systems in uh processes we implemented as well as the vert vertical integration initiatives. Um, we're just able to take advantage of the scale and this was another reason to uh bring Aulani into uh Celsius hold.

Holding so uh hats off and great job to the organization and team. We're focused on discipline and execution, driving additional profitability and scale and taking advantage um of the organization we've built. So we're going to continue to do that. So thank you for your question.

Awesome. Thanks so much. I'll pass it on.

Your next question comes from the line of Eric, sat with Morgan Stanley. Your line is open

great. Uh, thanks for the question. Congratulations. Um, hoping you could give some color on, um, expectations for ilani, shipments versus, uh, takeaway. Um, shipments were really robust in the quarter, despite presumably some, uh, sell in for the first, uh, lto, uh, before the deal closed. Um, how first is that? Correct? And then second how should we think about that for the balance of the year? Uh, and then could you touch upon, uh, expectations for which is Brew, which is, you know, always a big, uh, you know, lto for ilani, uh, what you're doing to, uh, grow that year on year, and you're kind of expectations for which is Brew this year. Thank you. Yeah, excellent. Um, thank you Eric. Um, you know, in regards to the shipping data, you know, if you look at just for the quarter and the growth, we saw in Aulani and the growth on the

You know, there's relatively a number of days on hand there so um we expect it to be somewhat uh, fairly close to the scans. But something if we see any outliers, um, uh you know we'll go ahead and highlight that. But, um, it's coming in fairly close. You always are going to have fluctuations as we as we seen prior. So, um, you know, and the timing of ltos and these, uh, launches will fluctuate on a quarter to quarter basis, um, we do have, which is Brew currently, um, has launched and is rolling into retail right now. So, um, if you can get to a retailer, please go out and try it. It's amazing flavor, uh, that kicked it off on social with some great marketing on, hats off to the team and also we have a variety of pack this year it's also in conjunction with Punk and spice which is a new flavor. Um and uh really excited about that um on how that's going to be perceived um within the uh portfolio. So um a lot of timing and sequencing. There's a lot of great Innovation that's planned. We have the winter Edition coming as well within the Lani portfolio.

And we've been working very closely for 2006 planning and 2007 uh, we're going to have a really robust portfolio of innovation, not only for Celsius, but also not only for ilani but also for Celsius. Um and then with the Celsius portfolio, we have our first lto. Um let me time offer that would be coming to Market this fall. That the uh the Celsius team is excited about

Yeah, let me jump in, I'll I'll give some directional um data if you kind of look back to Q2 24. Um, if you go back to the modeling call, we did back in. May we were at, uh, net revenue, number of 146. And today, we're at 301. So call it roughly 106%, uh, quarter over quarter growth, if you look at the scanner data and and it's not perfect, but it's directionally helpful the scanner data for Q2 was around 129%. So that gives us, uh, some confidence that we're not seeing, uh, that we're seeing the sell through happen. Um, as going into the distributor, the distributor, going to the retailer, and the, the consumer pulling the the the product off the shelf,

Great thanks. Thank thank you, both. I'll pass it on.

Your next question comes from the line of Jeff Van Cinder with B. Riley Securities. Your line is open.

Good morning, everyone. I wonder if we could turn a little bit to International for a moment. Maybe you can touch on plans to expand further, uh, internationally during the second half of the year.

Yeah, thank you Jeff. Um, really excited about uh, the international opportunity. Um, as we've seen, we started to see where we from building out the, the really the teams and the organization. Um, we have a variety of additional team members that will be coming on here in the back half of the year, um, to really further set us up for additional focus and execution, and really building these Brands, these new markets, like the UK Ireland, New Zealand, um, Australia, um, and, uh, Benelux, um, when working very closely with Centurion, a lot of these markets for the quarter, we had a 27% growth rate, um, it is a, at a run rate of getting close to a hundred million dollar business. So a lot of opportunity ahead the same health and wellness Trends. We see in North America are a global Trends. Um and a lot of these our markets are growing at a much uh at growing at a great rate within energy. So um that just like we're seeing energy grow here uh in the US it is growing around the world and Health and Wellness, resonates

with such a broad consumer and this portfolio delivers on that. You're seeing more females coming into the category, uh, and international markets. Um, and health and wellness is just a strong. So we think we're, well positioned. Um, as we look for new markets, we're really focused on our existing markets right now, uh, for the back, half of 2025. Uh, we're just getting started, lots of opportunities, but we really got to keep the teams focused at this point. It's timing and sequencing, uh, but the opportunity presents us itself for

26 and beyond for sure.

Thanks for taking my question.

Thank you, Jeff.

Your next question comes from the line of Gerald pascarelli with Peterman company. Your line is open,

Great. Uh, thanks very much for the question. Um, I know it'll be out in the queue and I apologize if I missed this in your prepared remarks. Um, but can you give us an idea of what the costs go Channel Revenue was in the quarter. I'm just curious. If there was a, you know, a benefit from from an MVM coupon program there. Um and then just how we should think about uh that channel progression going forward. Thank you.

Uh it is a a growing segment. We did have a, a promotional activity, take place. Um, so we did see uplift list, uplift at Costco. Um, and then I'll come through on our queue. Um, and, uh, I think when you look up for the back half of the year, we've adjusted some of our promotions and timing. Uh, we talked about that on our last earnings call, um where we saw some of the timing and promotion shift. Um so we're optimizing there as well as the timing of innovation and new launches. So Jared, do you have any additional color you want to add?

Yeah. You'll, you'll be able to back into the data, I guess. Uh, it's probably only Costco, but we're, we're up from a Q2 perspective as a portfolio about 17% for the quarter, um,

And that was in part driven by the the MDM that John talked about with uh Celsius.

Perfect. Uh thanks very much guys. Thank you.

Your next line come or your next question comes from the line of filipo falorie with City. Your line is open

Hi, good morning everyone. Um, I wanted to ask on the south coast brand, uh obviously great to see the brand uh return to growth. Maybe can you discuss some of the drivers of the acceleration in the brand, including a new marketing campaign? The the easier comps and some of the Innovation and then specifically on Innovation, you mentioned, your first lto on Celsius, can you?

You give maybe a little more color on what we should expect for the back half of the year, uh, in terms of innovation, in terms of growth or brand. Thank you. Yeah. Excellent. Great question. Um, you know, we've talked about this, we had a in in the queue, uh, q1 call. We had a slow start with the Celsius portfolio. There's a lot of timing and promotion and Innovation launches. Um, and, you know, some of those changes have really. We started to see the progression really month over month uh and and some weak over weeks where we've seen Celsius come back to growth. So um you know we're really focused and disciplined we've changed a lot of our strategies internally um as well as well as our Channel St, strategy amongst our promotional strategies um we're really excited about you know where we are with the Celsius portfolio. Getting it back to growth or focused on continuing that um we have per embraced and launched our first really holistic campaign around livest State go. Um, if you haven't seen it, please check it out on uh on some of our social and

You also see it on some of uh, TV and a variety of other mediums that are out there and it's really about connecting with consumers in a meaningful way. Uh, Celsius is part of a lifestyle, a daily routine to help you accomplish your goals. And this is what this program really works. Uh, and delivers on. It's about increasing frequency and new trial, uh, within the portfolio and initial feedback has been extremely promising. And, um, we're getting a lot of excitement from retailers, as well as customers. We are going to get a lot of data and analytics back, um, here in the next few weeks.

Uh, because we just recently kicked it off, but initial feedback has been positive um and really allows us to have an ownable position within the Celsius. Brand live. Thick go, um, and really owning that live fit. A lot of other brands own particular positions, done a lot of research on it. We're hired anomaly, a great creative Agency, 1 of the top creative agencies in the world, uh, and really putting a lot of effort Beyond it. So more to come on that as we continue to progress through summer, ask for Innovation uh we we're really leaning into our business free. You haven't tried with the Celsius portfolio. We have it launched a dragon fruit lime as well as a pink lemonade which is extremely refreshing uh opportunities that we're kicking off this summer. We expect to lean further into the Fizz free as a big initiative and our Innovation. First lto, I'm not going to disclose exactly the name or what it is, but the teams are really excited about it. It's going to, um, it'll be kicked off here um, at the end. Uh, and and the back half of the Year leading.

Into uh, the winter season. So um, that'll be our first 1. We do have more plans for 2026 and Beyond and we're taking some key. Learnings, as the teams work come together leveraging, the integration with Aulani and Celsius, we're taking the best of the best of, of both Brands and strategies to really deliver, uh, holistic approach with these Brands and continue to drive them forward and take advantage of the opportunities. We see in the energy category and this modern energy World, we're living in today and Beyond

Great. Thanks so much. I'll pass it out.

You are next question.

Thank you. Good morning.

Separate distribution networks behind it. Uh, is is there a way you can still manage the portfolio as 1? Do you? How do how do the brands interact? As you think about who gets priority for for placement? Um, just to help us understand how how you're thinking about that.

Yeah, absolutely. You know, um, good morning as well and thank you, Michael Jared mentioned some price uh, pack size, um, and channel, uh, mix, uh, for the quarter. Um, you know, that'll fluctuate. Um, we had a greater single serve, um, growth that we saw on the quarter with between the brands, and, but we do still believe. And we spoke about this prior quarters that uh, variety packs and larger pack size is a trend of the future, especially, as we're seeing growth. Um, continue to take place in strong growth, taking place in food in large format, as Celsius is becoming, uh, as the energy category is becoming more of a take-home, um, Pantry purchase, uh, part of the daily lifestyle and daily routine moving away from, um, you know, uh, think largely that improves purchase and being part a greater even further. Greater part of lrb.

As for the logistics, and the strategy on bringing these 2 Brands together. It's really um, our sales organization will own Tier 1 and tier 2, um, accounts and account calls and then we'll Leverage The distribution. So, um, we have, uh, we have field sales, organizations and strategies, we're leasing a lot of data and insights and analytics. Uh, but we're leveraging a lot of synergies as well as we integrate the organizations.

From finance and operations, uh key account management strategy uh rev Revenue management, promotional management uh and so on. So we're going to continue to stay focused. We have great partners that are helping us, you can see what balani was able to deliver, um, through the, their distribution Network. And we're extremely pleased, um, with the partners as well as the customers we're serving and focused to execute uh, today, uh, tomorrow and Beyond, thank you.

Okay, great. Thanks so much.

Your next question comes from the line of Jim Solera with Stevens. Your line is open.

Good morning. Thanks for taking my question. Um, I want to ask you, you'd mentioned, you know, the year-over-year growth on Ilani is 106. Um, this, how should we think about the pacing, you know, through the back half of the year? Especially given all these, you know, exciting LPOs and flavor innovations you have coming into the market, increasing visibility. And then, if you guys could offer any commentary on household penetration data that you'd be willing to share, maybe so we can get a sense for, you know, how much of the Ilani strength is coming from just increased frequency with existing households versus new consumers coming to the brand, greater awareness building.

Yes, so, I'll, I'll talk pacing. I think John mentioned the household penetration, he can pull that up from his notes. Um, if you look last year, we kind of went 1 136 146, 166 157 as I look at kind of 2024. Um, so the the comps are a little tougher and also we had fantastic uh, cotton candy and sherbet swirl ltos, our top 2 ltos ever with Ani. Um, so we've got Witches Brew coming through and then we've got our um our Winter Wonderland seasonal as well. So we really need those to be as successful as they were last year and they did a great job. Um, you know, beyond that we're seeing good growth coming out of the core portfolio as well. So we do expect, uh, to see solid growth continued. Um, I'll be with a little tougher comps as we look at the back half of the year,

Yeah and in regards to the household penetration question as we prepare remarks we talked about the Celsius holding portfolio it's reached up to 43% household penetration and that is including not only Celsius and 43% but also Aulani at 22% um and what we're seeing there. Um what what we talked about within the Celsius portfolio on both brands have a ton of Runway with household penetration and we think this is for going to we're focused on continuing uh to progress and and bring these Brands to more people and more places. But when you look at the Celsius portfolio, specifically, we saw 1 of the largest increases uh we've seen in the shortest time

These brands are continued really to grab additional household penetration and just leverage the health and wellness trends we're seeing in the, you know, food and beverage category.

Great. I appreciate the thoughts all. Thank you.

Your next question comes from the line of Andrea teria with JP Morgan. Your line is open.

Thank you, good morning. Um, I wanted to just like maybe um pass out a new comment that before in terms of like how to think of promo but maybe give us some um idea how the third quarter is unfolding. I know you spoke about the Costco promo, but perhaps talk about um Prime day uh anything we should be aware of in terms of like puts and takes of shipments and and and um and consumption

About um, the um the easy comparisons that you probably are facing you faced I think about 20 million in the distribution, uh, issues last year. I think you have north of 120. For the quarter. Is that something we should be aware of? Is that a Tailwind? Or it doesn't really matter. You get it back just to understand the puts and takes please. Thank you.

Yeah, thank you. I I jump in on some of those questions and I'll and I'll toss it over to Jared as well for further comment. But um, you know we we really stand hold on. Our our modern uh modeling call that we we conducted with um, that we conducted with Aulani. Um, you know, there's always going to be puts and takes along the way. There's a lot of variability. We did optimize some of our, our promotions. Um, moving from the that we talked about in our last earnings. Call moving from q1, um, into kind of the summer season. Um, so you have some timing and sequencing there, um, within the Lani portfolio. Um, they did we did move the witches brew Ford several weeks. Um, so if you're tracking weekly, there will be puts and takes, um, you know, all the time but that has moved forward. Um, and within, um, you know, when you're looking at Q3 within Celsius,

Um, it's really about some of the promotional timing there. And you saw that um, just uh, the other question in regards to the club Channel, there was a move within a promotional, uh, activity at 1, of the at Costco, um, which moved into the third quarter. So there's timing and puts and takes their, uh, that will take place and um, you know,

Uh regards to other details in regards to how the quarter is actually going to turn out. Um just we're not going to provide forward-looking information. It's just a it's really difficult right now. Um we stand by um the modeling call with the adjustment outside of the adjustment that Eric or Jared mentioned in regards to the gross profit margins, which are coming in um slightly better on the top end uh than expected. So thank you.

And at this time. Mr. Johnfield, they'll turn the call back over to you.

Thanks again for joining us today. Q2 was a strong quarter that reflects the power of our portfolio, the discipline of our team and the strength of the category. Alani Nu delivered breakout growth Celsius maintained momentum across channels and we executed with Focus across Innovation operations and Retail. I want to thank our employees and our partners, and for their teamwork, and dedication that enables us to deliver our growth.

As we look ahead, remain committed to the long-term strategy driving sustainable growth profitably.

Driving through lead brand leadership, discipline investment and operational excellence. We're excited about. What's ahead and in the back half of the year. And Beyond, thank you for joining us today. As we continue to capitalize on the modern energy era. Grab a Celsius and lift fit.

Thank you. This concludes today's conference call. You may now disconnect