Celsius Holdings Reports Mixed Q3 Results, 5% Revenue Growth for Nine Months, and Strategic Developments

Celsius Holdings, Inc. reported its financial results for the three and nine months ended September 30, 2024, highlighting significant changes in revenue, profitability, and strategic developments. The company experienced a notable decline in revenue for the third quarter, reporting $265.7 million, down 31% from $384.8 million in the same period of 2023. This decline was attributed primarily to a $123.9 million decrease in revenue from its largest distributor, driven by inventory optimization and increased retailer promotional allowances. However, for the nine months ended September 30, 2024, revenue increased by 5% to $1,023.4 million, compared to $970.6 million in the prior year.

Gross profit for the third quarter also decreased to $122.2 million, a 37% drop from $194.1 million in Q3 2023, resulting in a gross profit margin of 46%, down from 50%. For the nine-month period, gross profit rose to $513.5 million, a 10% increase from $466.9 million in 2023, with the gross profit margin improving to 50% from 48%, attributed to lower raw material costs and reduced freight expenses.

Celsius reported a net loss attributable to common stockholders of $0.6 million for Q3 2024, compared to a net income of $70.4 million in Q3 2023. For the nine months, net income decreased to $131.0 million from $142.6 million in the previous year. Diluted earnings per share for the nine months were $0.55, down from $0.60 in 2023.

The company’s cash and cash equivalents increased significantly to $903.7 million as of September 30, 2024, compared to $756.0 million at the end of 2023. Operating cash flows for the nine months rose to $187.2 million, up from $136.0 million in the prior year.

Strategically, Celsius announced the acquisition of Big Beverages Contract Manufacturing, L.L.C. for $75.0 million, which is expected to enhance its manufacturing capabilities. The company also continues to strengthen its distribution network, having entered into agreements with various distributors, including PepsiCo, which remains a key partner for U.S. distribution.

Celsius has been addressing a material weakness in its internal controls over financial reporting, particularly in revenue recognition and inventory accounting, which was identified as of December 31, 2023. The company is implementing changes to improve its internal control environment.

Overall, while Celsius Holdings, Inc. faced challenges in the third quarter, its long-term growth strategy and recent acquisition are positioned to enhance its operational capabilities and market presence.