Celsius Q2 2025 Earnings Call Transcript

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Provided by Quartr
August 7, 2025

Key Takeaways

  • Positive Sentiment: Revenue jumped 84% year-over-year to $739.3 million in Q2, driven by $301.2 million from the acquisition of the ALAANI New brand and a 9% increase in core Celsius sales.
  • Positive Sentiment: Adjusted EBITDA reached a record $210 million, up 109% year-over-year, reflecting strong operational execution across both Celsius and ALAANI.
  • Positive Sentiment: The ALAANI New brand saw 129% dollar sales growth, gained 3.2 share points to 6.3% of the RTD energy category, and is on track to deliver $50 million in run-rate cost synergies over two years.
  • Negative Sentiment: Consolidated gross margin held at 51.5% (down 50 bps), but management expects margin pressure in H2 from rising input costs and aluminum tariffs.
  • Positive Sentiment: Celsius portfolio retail sales rose 29% and volumes increased 31% in Q2, while RTD energy dollar share climbed 180 basis points to 17.3%.
AI Generated. May Contain Errors.
Earnings Conference Call
Celsius Q2 2025
00:00 / 00:00

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Operator

Good morning and welcome to the Celsius Holdings Second Quarter twenty twenty five Earnings Webcast. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Thank you. I'd now like to hand the call over to Paul Wiseman, Investor Relations. Please go ahead.

Paul Wiseman
Paul Wiseman
SVP - Communications at Celsius

Good morning, and thank you for joining Celsius Holdings second quarter twenty twenty five earnings webcast. With me today are John Fieldly, Chairman and CEO Jared Langens, 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, ir.celsiusholdingsinc.com, and on the SEC's website, sec.gov. An audio replay of this webcast will also be accessible later today.

Paul Wiseman
Paul Wiseman
SVP - Communications at Celsius

Today's discussion includes forward looking statements based on our current expectations and information. These statements involve risks and uncertainties, many beyond the company's control. Celsius Holdings disclaims any duty to update forward looking statements except as required by law. Please review our Safe Harbor statements and risk factors in today's press release and in our most recent filings with the SEC, 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'll present results on both a GAAP and non GAAP basis.

Paul Wiseman
Paul Wiseman
SVP - Communications at Celsius

Non GAAP measures like adjusted EBITDA, adjusted EBITDA margin, adjusted diluted earnings per share and their GAAP 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.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

Good morning, and thank you for joining us. Q two 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 tailwinds coming from new to category consumers drawn to functional zero sugar innovation and increasingly great value among beverage choices. Celsius Holdings delivered meaningful strength across our portfolio in the second quarter, led by standout performance from the newly acquired Aulani new brand and continued positive momentum from our core Celsius brand. For the thirteen weeks ended June 29, total Celsius holdings retail sales grew 29% and volume increased 31%, reflecting broad based consumer demand and strong execution at retail.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

Celsius Holdings reported revenue of 739,300,000.0 for the second quarter ending 06/30/2025. The 84% year over year increase in revenue was primarily driven by 301,200,000.0 in revenue from the ALAANI new brand. The Celsius brand contributed 438,100,000.0 of revenue in the quarter. Q two consolidated gross margin held relatively steady at a 51.5%, down 50 basis points year over year despite incorporating ALAANI News' lower margin profile beginning in the second quarter. Overall gross margin was supported by favorable material cost, improved production yields, leverage gains through our vertical integration initiatives, and strong product and channel mix.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

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 EBITDA was a record in excess of $200,000,000 in 2025. We are very pleased with the strong growth of Elani New and the pace of our integration with the teams and operations that Celsius Holdings acquired in the transaction, which closed on April 1. Our focus today remains on delivering excellent customer service and supporting a robust distribution growth and innovation. As we noted in our ALAANI new modeling call held in May, we expect to achieve 50,000,000 of run rate cost synergies over two years post closing, contributing to strong pro form a profitability and significant cash flow generation.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

Celsius Holdings performance through 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 continue 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.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

But first, I wanna 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 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 beverage, and Celsius Holdings is defining it. Recent industry reports pointed to 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 Aulani New are gaining share and building loyalty.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

The Celsius holdings portfolio has reached a 43% household penetration with the Celsius brand at 34% and the ALAANI New brand at 22% household penetration with repeat rates over 65%. And on the retail side, buyer surveys continue to rank Celsius Holdings portfolio among the most likely to gain share, confidence we're backing up with strong execution in the market. In tracked US channels, the Rettity 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 28.9%, nearly double the category. Unit sales increased 31.2%.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

Total points of distribution and items per store both rose roughly 23%. Velocity increased 20% quarter over quarter. For the last thirteen weeks ended June 29, Celsius Holdings achieved a 17.3% dollar share in 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 11 share for the thirteen weeks ended June 29. And the ALAANI brand had a breakout quarter.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

Dollar sales rose a 129% with 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 thirteen weeks ended June 29. The Celsius holdings portfolio also recently surpassed a key retail milestone, achieving $4,000,000,000 in the past fifty two week retail sales and track channels for the period ending 07/20/2025, a major milestone. That's more than the next eight RTD energy brands combined in the same period, a clear signal of the category momentum we're leading and the demand our brands have generated. Innovation continues to be a core driver of growth, and both brands delivered meaningful in q two. Alani New showed extraordinary strength in innovation in the second quarter led by Sherbert Swirl and cotton candy, which drove sales incrementality across the business.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

ALAANI NEW cotton candy set sales records in its debut at Walmart by orders of magnitude. And ALAANI NEW consumers are already buzzing about the recent arrival of ALAANI NEW witch's brew, which this year is accompanied by another great LTO, pumpkin cream. Importantly, growth wasn't limited to new items. Aulani New's core SKUs are sustaining strong velocity and retention, evidence that this is a brand with staying power. Brand loyalty data across the category shows Celsius and Elani brands are clear standouts, particularly among Gen z and female consumers.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

The Celsius brand delivered strong innovation in q two with the release of two great refreshing fizz free flavors, including pink lemonade and dragon fruit lime. Consumer insights guide our innovation, and the introduction of these two 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 e com, contract channels, and food service. The Celsius brand was the number one trademark in RTD energy on Amazon during the summer Prime Day event with a 18.4 share for the week ending July 12, with sales led by our variety packs and top performing flavors. Yalani new brand jumped to a 10.9% share on Amazon during the Prime Day event for the week ending July 12, up from 6.5% prior week.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

Celsius foodservice 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, invest in localized execution, and scale with discipline.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

Internally, we're building our capabilities to support this growth in systems, supply chain, analytics, and operations. In July, we welcomed John Cole, an executive vice president of technology to help us strengthen cross functional connectivity and scale our infrastructure for a multi brand omnichannel future. John's thirty year career in technology spans name brands like Fanatics, Philip Morris, and Point72 among others. We continue to invest in brand awareness, touching more people in more places more often, focusing on driving trial and loyalty. In June, we launched the next wave of our Live Fit Go marketing campaign, our most ambitious creative yet, connecting purposeful energy to real world action.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

Early results are strong with rising aided awareness and positive feedback from retailers. The Celsius brand also activated a key cultural moments like f one Miami, the CMA Fest, and the Breakaway Festival, while Alani New expanded its reach through influencer engagement and lifestyle partnerships. Looking ahead, we're excited to debut Celsius first national TV commercial during NFL broadcast this fall, a major milestone. We're also collaborating with country music star, Kelsey Bellerini, 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 in more places and more often in the second quarter and how our brands continue to lead one of the most dynamic categories in beverage.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

The Celsius and ALAANI new 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?

Jarrod Langhans
Jarrod Langhans
Chief Financial Officer at Celsius

Thanks, John, and good morning, everyone. We delivered strong financial results in the second quarter with meaningful contributions from both the Celsius and ALAANI new brands. Let's walk through the numbers. Starting with q two twenty twenty five financial highlights. For the three months ended 06/30/2025, revenue totaled $739,000,000, up 84% from the prior year period.

Jarrod Langhans
Jarrod Langhans
Chief Financial Officer at Celsius

Growth was led by 301,000,000 of revenue from Milani New, 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 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 inventory movements at our largest distributor. Gross profit increased to $381,000,000 compared to $2.00 $9,000,000 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 Elani New's structurally lower margin and the impact of $21,700,000 in purchase accounting inventory step up.

Jarrod Langhans
Jarrod Langhans
Chief Financial Officer at Celsius

That said, ALAANI knew gross margin improved sequentially driven by cost efficiencies and product mix. For both brand Celsius and ALAANI, we saw some favorable mix impacts in areas such as channel mix and product mix, but most impactful was savings across raw materials and freight. With that said, our inventory was 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.

Jarrod Langhans
Jarrod Langhans
Chief Financial Officer at Celsius

Sales and marketing expenses were $152,000,000 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 brands with increased investment relative to the second quarter, including further investments in our Lift Fit Go campaign, summer promotions, and increased retail activation. As always, we'll remain agile in managing spend. We continued to build organizational capability during the quarter with new hires in field sales, brand marketing and customer experience, all critical to executing our commercial priorities in Q2 and beyond. G and A expenses were $86,000,000 or 11.7% of revenue compared to 6% last year.

Jarrod Langhans
Jarrod Langhans
Chief Financial Officer at Celsius

The increase was primarily driven by $16,000,000 in acquisition related costs and $13,800,000 related to the contingent consideration associated with the earn out. Let me provide a little color on the contingent consideration. In connection with the acquisition of Elani New, the company recorded a liability at fair value for the contingent consideration potentially payable to the sellers of Elani New subject to achievement of certain 2025 net sales targets with a maximum payment of $25,000,000 The fair value of the liability was estimated using discounted future cash flows based on a probability weighted expected return methodology. The company evaluates the fair value of the contingent consideration quarterly and adjusts the carrying value if new information becomes available. As of 06/30/2025, the contingent consideration was remeasured to the maximum $25,000,000 payout driven by the outperformance of Elani News revenue results for the three months ended 06/30/2025 relative to the initial financial projections as of the closing date and a resulting revised upward forecast for the remainder of the calendar year.

Jarrod Langhans
Jarrod Langhans
Chief Financial Officer at Celsius

On to net income. Net income was $99,600,000 for the 2025 as compared to $79,800,000 for the 2024. Net income attributable to common shareholders for Q2 was $85,700,000 or $0.33 per diluted share compared to $66,700,000 and $0.28 per share last year. Adjusted diluted EPS was $0.47 per share compared to $0.28 per share in the prior year. Adjusted EBITDA increased 109% to two ten million dollars compared to $100,000,000 in the prior year.

Jarrod Langhans
Jarrod Langhans
Chief Financial Officer at Celsius

Now let's take a look at year to date. For the six months of 2025, revenue totaled $1,070,000,000 up 41% year over year. North American revenue reached 1,020,000,000 up 41%, and international revenue grew 33% to $48,000,000 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 Alonanu's gross margin structure and inventory step up. Sales and marketing expenses for the first half were $232,000,000 or 21.8% of revenue, down from 22% in the prior year. G and A totaled 125,800,000 or 11.8% of revenue versus 6.2% last year, with the increase primarily driven by transaction related costs and the previously mentioned earn out adjustment.

Jarrod Langhans
Jarrod Langhans
Chief Financial Officer at Celsius

Non GAAP adjusted EBITDA increased 49% to $280,000,000 compared to $188,000,000 in the 2024. GAAP net income for the first half was $144,000,000 with net income attributable to common shareholders of $119,900,000 or zero four eight dollars per diluted share versus $0.55 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 Elani new acquisition. Moving to the balance sheet and capital structure, we ended the quarter with $615,000,000 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 30, total debt outstanding consisted of the $900,000,000 term loan used to fund a portion of the Elani new acquisition, and our revolver remains undrawn.

Jarrod Langhans
Jarrod Langhans
Chief Financial Officer at Celsius

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

Operator

Thank you. Your first question comes from the line of Peter Grom with UBS. Your line is open.

Peter Grom
Peter Grom
Equity Research Analyst at UBS Group

Thanks operator and good morning everyone. So obviously the top line performance 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. 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, how it compared versus your expectations? And then just on the path forward, you mentioned the impact from tariffs was not significant in the quarter.

Peter Grom
Peter Grom
Equity Research Analyst at UBS Group

But can you maybe give us a sense for how we should be thinking about the gross margin trajectory from here given the increases in aluminum in the Midwest premium? Thanks.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

Thanks, Peter. Yeah. We had a phenomenal quarter. Top line came in extremely strong, especially on the with the Elani portfolio. And as we talked about in the prepared remarks, some of the new flavor launches, the LTOs with cotton candy and the slush just did extremely well.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

But in regards to the gross profit margin, I'll turn it over to Jared for more color on some of those drivers. Jared?

Jarrod Langhans
Jarrod Langhans
Chief Financial Officer at Celsius

Yeah. Again, to just like John said, let me re reiterate, hats off to the operations and commercial teams, you know, across Celsius, Aloni, and Congo as well with the TSA that we're working with them on. 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. In terms of how those break down for q two, let's start with Aloni.

Jarrod Langhans
Jarrod Langhans
Chief Financial Officer at Celsius

For Aloni, John did mention the LTOs. Those end up tend to be from a a COGS perspective and an overall perspective, higher margin products. So when those things take off, they do provide a a benefit to the margin. They've got longer runs, and you typically don't see promos or a lot of promos on those. So from a net perspective, they're they're accretive.

Jarrod Langhans
Jarrod Langhans
Chief Financial Officer at Celsius

We saw a good mix as well. So the RTD component of the portfolio within Alani way outweighed anything else within the portfolio, and the RTD portfolio or portion of the portfolio is a higher margin product. And then we saw from an operations perspective, we saw some freight savings and some raw material savings pacing ahead of expectations. So great job to them to really start driving those really as soon as we kinda hit the ground, so hit the ground running. So all in all, great job from Aloni's perspective.

Jarrod Langhans
Jarrod Langhans
Chief Financial Officer at Celsius

For Celsius, we saw some savings as well across raw materials. Our scrap rates are are at some of the lowest levels we've seen in years. And then we did benefit from some mix in terms of the channels that we're seeing outsized growth above that 9% that we noted in the in the script in the press release. So great quarter overall, and, you know, lots of good things happening. Also, talked about FIFO.

Jarrod Langhans
Jarrod Langhans
Chief Financial Officer at Celsius

We talked about in in the last quarter price locks we had for a good part of the year that helped with the aluminum. So all those things benefited us in the quarter. We had 51.5% margin. Obviously, if you add back the inventory step up, it's 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.

Jarrod Langhans
Jarrod Langhans
Chief Financial Officer at Celsius

Looking to q three and q four, I'll do my best to not have everyone kinda get over their skis on on the results. So let's kinda look at the FIFO and the price locks. Obviously, first in first out, we'll probably have some benefit in q three still from FIFO with some inventory coming in that wasn't significantly impacted by aluminum tariffs. So that's a you know, that'll help q three. We also have some price locks across the back half of the year that'll be helpful.

Jarrod Langhans
Jarrod Langhans
Chief Financial Officer at Celsius

But we'll we'll see some tariff, LME, and aluminum increases across raw materials. It's hard to peg it with the tariffs kinda changing weekly as well as the the LME and aluminum changing on a weekly basis. Clearly, we're we're up above the model that we showed, and above the 50% that I kinda flagged for Celsius last quarter. Where we'll land between kind of that 50 to 54 number, I think we're we're comfortable saying we're gonna be low fifties, as things are today if nothing changes. But with that said, it's up to us to do better and and to drive those cost initiatives to to be above that expectation.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

Yeah. And I I think with the systems and processes we implemented as well as the vertical integration initiatives, we're just able to take advantage of the scale, and this was another reason to, bring Elani into, Celsius Holdings. So 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, of the organization we've built. So we're gonna continue to do that. But thank you for your question.

Peter Grom
Peter Grom
Equity Research Analyst at UBS Group

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

Operator

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

Eric Serotta
Eric Serotta
Executive Director at Morgan Stanley

Great. Thanks for the questions. Congratulations. Hoping you could give some color on expectations for Elani shipments versus takeaway. Shipments were really robust in the quarter despite presumably some sell in for the first LTO before the deal closed.

Eric Serotta
Eric Serotta
Executive Director at Morgan Stanley

How first, is that correct? And then second, how should we think about that for the balance of the year? And then could you touch upon expectations for Witches Brew, which is always a big you know, LTO for Aulani, what you're doing to, grow that year on year and your kinda expectations for Witches Brew this year. Thank you.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

Yeah. Excellent. Thank you, Eric. You know, in regards to the shipping data, you know, if you look at just for the quarter, the growth we saw in Elani and the growth on the scan data, you know, it's not a perfect match, but, you know, it's relative, I guess, you could say. It is it is really hard to really anticipate the future.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

There always is going to be some deviation from sell in to sell out. And but I will tell you, you know, we are in mainly in independent network with the Aulani New, portfolio, and, you know, there's relatively a number of days on hand there. So, we expect it to be somewhat, fairly close to the scans, but something if see we any outliers, you know, we'll go ahead and highlight that. But, it it's coming in fairly close. You always are gonna have fluctuations at least as we've seen prior.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

So, you know, and the timing of LTOs and these launches will fluctuate on a quarter to quarter basis. We do have Witches Brew currently, has launched and is rolling into retail right now. So, if you can get to a retailer, please go out and try. It's amazing flavor. They've kicked it off on social with some great marketing, and hats off to the team.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

And, also, we have a variety pack this year, but it's also in conjunction with pumpkin spice, which is a new flavor. And really excited about that, on how that's gonna be perceived within the portfolio. So 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 Aloni portfolio, and we've been working very closely for February and 02/2007.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

We're gonna have a really robust portfolio of innovation not only for Celsius, but only for Ilani, but also for Celsius. And then with the Celsius portfolio, we have our first LTO, limited time offer that will be coming to market this fall that the the Celsius team is excited about.

Jarrod Langhans
Jarrod Langhans
Chief Financial Officer at Celsius

Yeah. Let me jump in. I'll I'll give some directional, data. If you kinda look back to q two twenty four, if you go back to the modeling call we did back in May, we were at a net revenue number of $1.46, and today, we're at $3.00 1. So call it roughly a 106%, quarter over quarter growth.

Jarrod Langhans
Jarrod Langhans
Chief Financial Officer at Celsius

If you look at the scanner data, and and it's not perfect, but it's directionally helpful, The scanner data for q two was around 129. So that gives us some confidence that we're not seeing that we're seeing the sell through happen as going into the distributor, the distributor going to the retailer, and the the consumer pulling the the the product off the shelf.

Eric Serotta
Eric Serotta
Executive Director at Morgan Stanley

Great. Thank you both. I'll pass it on.

Operator

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

Jeff Van Sinderen
Senior Research Analyst at B. Riley & Co

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 internationally during the second half of the year.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

Yeah. Thank you, Jeff. I'm really excited about the international opportunity. As we've seen, we're starting to see we've been building out the the really the teams and the organization. We have a variety of additional team members that will be coming on here in the back half of the year, to really further set us up for additional focus and execution and really building these brands in these new markets like The UK, Ireland, New Zealand, Australia, and Benelux.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

We're working very closely with Centauri in a lot of these markets for the quarter. We had a 27% growth rate. It is a at a run rate, getting close to a $100,000,000 business. So a lot of opportunity ahead. The same health and wellness trends we see in North America, global trends.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

And a lot of these our markets are growing at a much, growing at a great rate within energy. So, just like we're seeing energy grow here, 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 come into the category, in international markets, and health and wellness is just as strong. So we think we're well positioned. As we look for new markets, we're really focused on our existing markets right now for the back 2025.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

We're just getting started. Lots of opportunities, but we really gotta keep the teams focused at this point. It's timing and sequencing, but the opportunity presents itself for '26 and beyond for sure.

Jeff Van Sinderen
Senior Research Analyst at B. Riley & Co

Thanks for taking my question.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

Thank you, Jeff.

Operator

Your next question comes from the line of Gerald Pascarelli with Needham and Company. Your line is open.

Gerald Pascarelli
MD - Equity Research, Consumer at Needham & Company

Great. Thanks very much for the question. I know it will be out in the queue and I apologize if I missed this in your prepared remarks. But can you give us an idea of what the Costco channel revenue was in the quarter? I'm just curious if there was a benefit from from an MVM coupon program there, and then just how we should think about, that channel progression going forward. Thank you.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

Yeah. I'll just start off, Gerald. I mean, the club channel is a big portion of our our business from Costco to scams to BJ's. It is a growing segment. We did have a a a promotional activity take place, so we did see uplift list uplift at Costco, and that'll come through on our queue.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

And I think when you look up for the back half of the year, we've adjusted some of our promotions and timing. We talked about that on our last earnings call where we saw some of the timing of promotions shift. So we're optimizing there as well as the timing of innovation and new launches. So, Jared, do have any additional color you wanna add?

Jarrod Langhans
Jarrod Langhans
Chief Financial Officer at Celsius

Yeah. You'll you'll be able to back into the data. I guess, it's probably only Costco, but we're we're up from a q two perspective as a portfolio about 17% for the quarter. And that was in part driven by the the MDM that John talked about with Celsius.

Gerald Pascarelli
MD - Equity Research, Consumer at Needham & Company

Perfect. Thanks very much guys.

Jeff Van Sinderen
Senior Research Analyst at B. Riley & Co

Thank you.

Operator

Your next line come or your next question comes from the line of Filippo Faldori with Citi. Your line is open.

Filippo Falorni
Filippo Falorni
Director - Equity Research at Citi

Hi, good morning everyone. I wanted to ask on the Celsius brand. Obviously, great to see the brand return to growth. Maybe can you discuss some of the drivers of the acceleration in the brand, including your new marketing campaign, the easier comps and some of the innovation? And then specifically on innovation, you mentioned your first LTO on Celsius.

Filippo Falorni
Filippo Falorni
Director - Equity Research at Citi

Can you give maybe a little more color what we should expect for the back half of the year, in terms of innovation, in terms of growth for the brand? Thank you.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

Yeah. Excellent. Great question. You know, we've talked about this. We had a in in the q, q one call, we had a slow start with the Celsius portfolio.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

There's a lot of timing and promotion and innovation launches. And, you know, some of those changes have really we started to see the progression really month over month, and and some week over weeks where we've seen Celsius come back to growth. So, you know, we're really focused and disciplined. We've changed a lot of our strategies internally, as well as well as our channel stat strategy amongst our promotional strategies. We're really excited about, you know, where we are with the Celsius portfolio, getting it back to growth.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

We're focused on continuing that. We have embraced and launched our first really holistic campaign around Live Fit Go. If you haven't seen it, please check it out on, on some of our social, and you'll also see it on some of, TV and a variety of other mediums that are out there. And it's really about connecting with consumers in a meaningful way. Celsius is part of a lifestyle, a daily routine to help you accomplish your goals, and this is what this program really works, and delivers on.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

It's about increasing frequency and new trial, within the portfolio, and initial feedback has been extremely promising. And, we're getting a lot of excitement from retailers as well as customers. We are gonna get a lot of data and analytics back here in the next few weeks because we just recently kicked it off, but initial feedback has been positive. It really allows us to have an ownable position within the Celsius brand, Live Fit Go, and really owning that Live Fit. A lot of other brands own particular positions.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

We've done a lot of research on it. We hired Anomaly, a great creative agency, one of the top creative agencies in the world, and really putting a lot of effort beyond it. So more to come on that as we continue to progress through summer. As for innovation, we look we're really leaning into our fizz free. You haven't tried with the Celsius portfolio.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

We haven't launched a dragon fruit lime as well as a pink lemonade, which is extremely refreshing, opportunities that we're kicking off this summer. We expect to lean further into the Fizz Free as a big initiative. And our innovation, FirstLTO, I'm not gonna disclose exactly the name or what it is, but the teams are really excited about it. It's gonna, it'll be kicked off here, at the end, in in the back half of the year leading into, the winter season. So, that'll be our first one.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

We do have more planned for 2026 and beyond, and we're taking some key learnings as the teams work come together, leveraging the integration with Aloni and Celsius. We're taking the best of the best of of both brands and strategies to really deliver a 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.

Filippo Falorni
Filippo Falorni
Director - Equity Research at Citi

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

Operator

Your next question comes from the line of Michael Lavery with Piper Sandler. Your line is open.

Michael Lavery
Michael Lavery
MD & Senior Research Analyst at Piper Sandler Companies

Thank you. Good morning. I was wondering if you could just talk about your assortment optimization and what the priorities are for the shelf set? And what, if any, challenges come with having two separate distribution networks behind it? Is there a way you can still manage the portfolio as one?

Michael Lavery
Michael Lavery
MD & Senior Research Analyst at Piper Sandler Companies

Do you how do how do the brands interact as you think about who gets priority for for placement? Help us understand how how you're thinking about that.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

Yeah. Absolutely. You know, good morning as well. Thank you, Michael. Jared mentioned some price, pack size and channel mix for the quarter.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

You know, that'll fluctuate. We had a greater single serve, growth that we saw in the quarter with between the brands. And but we do still believe, and we spoke about this prior quarters, that variety packs and larger pack size is a trend of the future, especially as we're seeing growth, continue to take place and strong growth taking place in food in large format as Celsius is becoming, as the energy category is becoming more of a take home pantry purchase, part of a daily lifestyle and daily routine, moving away from, you know, think largely that in post purchase and being part a greater even further greater part of LRB. As for the logistics and the strategy on bringing these two brands together, it's really, our sales organization will own tier one and tier two accounts and account calls, and then we'll leverage the distribution. So we have we have field sales, organizations, and strategies.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

We're losing a lot of data and insights and analytics. But we're leveraging a lot of synergies as well as we integrate the organizations from finance and operations, key account management, strategy, rev man management, promotional management, and so on. So we're gonna continue to stay focused. We have great partners that are helping us. You can see what Aulani was able to deliver through their distribution network, and we're extremely pleased with the partners as well as the customers we're serving and focus to execute today, tomorrow, and beyond. Thank you.

Michael Lavery
Michael Lavery
MD & Senior Research Analyst at Piper Sandler Companies

Okay. Great. Thanks so much.

Operator

Your next question comes from the line of Jim Salera with Stephens. Your line is open.

Jim Salera
Research Analyst at Stephens Inc

Hey, good morning. Thanks for taking our question. I wanted to ask Jared, you'd mentioned the year over year growth on Avani is 106%.

Jim Salera
Research Analyst at Stephens Inc

Just how should we think about the pacing of that through the back half of the year, especially given all these exciting LTOs 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 how much of the Elani strength is coming from just increased frequency with existing households versus new consumers coming to the brand, greater awareness building?

Jarrod Langhans
Jarrod Langhans
Chief Financial Officer at Celsius

Yes. So I'll talk pacing. I think John mentioned household penetration. He can pull that up from his notes. If you look last year, we kind of went 136, 146, 166, one fifty seven as I look at kind of 2024.

Jarrod Langhans
Jarrod Langhans
Chief Financial Officer at Celsius

So the the comps are a little tougher. And, also, we had fantastic cotton candy and sherbert swirl LTOs, our top two LTOs ever with Aulani. So we've got Witches Brew coming through, and then we've got our 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. You know, beyond that, we're seeing good growth coming out of the core portfolio as well.

Jarrod Langhans
Jarrod Langhans
Chief Financial Officer at Celsius

So we do expect, to see solid growth continue, albeit with a little tougher comps as we look at the back half of the year.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

Yeah. And in regards to the household penetration question, as in prepared remarks, we talked about the Celsius holding portfolio has reached a 43% household penetration, and that is including not only Celsius 43%, but also Amani at 22%. And what we're seeing there, what what we talked about within the Celsius portfolio, and both brands have a ton of runway with household penetration, and we think this is for gonna we're focused on continuing, to progress and and and bring these brands to more people and more places. But when you look at the Celsius portfolio specifically, we saw one of the largest increases, we've seen in the shortest time period with the kickoff of this Live Fit Go pro pro campaign. So we're really pleased with that.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

We saw the increased household penetration increased at a a much greater rate than it did in the prior six months. So really promising as we continue to progress with our LIVFITGO program and strategy. And then Aloni just continues to grow there. So we have a lot of every new innovation, every limited time offer and push. We continue to attract more people into the portfolio and take advantage of their really new consumers coming in, for more function in beverage, looking for more energy and functionality.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

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

Jim Salera
Research Analyst at Stephens Inc

Great. I appreciate the thoughts. I'll hop back in queue.

Operator

Your next question comes from the line of Andrea Teixeira with JPMorgan. Your line is open.

Andrea Teixeira
Andrea Teixeira
Managing Director at JP Morgan

Thank you. Good morning. I wanted to just like maybe parse out and you commented that before in terms of like how to think of promo, but maybe give us some idea of how the third quarter is unfolding. I know you spoke about the Costco promo, but perhaps talk about Prime Day, anything we should be aware of in terms of like puts and takes of shipments and consumption? And also when you think about the easy comparisons that you probably are facing, you faced, I think about $20,000,000 in the distribution issues last year.

Andrea Teixeira
Andrea Teixeira
Managing Director at JP Morgan

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.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

Yes. Thank you. I jumped in on some of those questions, and I'll then I'll toss it over to Jared as well for further comment. But, you know, we're we we really stand hold on our our modeling call that we we conducted with, that we conducted with Aloni. You know, there's always gonna be puts and takes along the way.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

There's a lot of variability. We did optimize some of our our promotions, moving from the that we talked about on our last earnings call, moving from q one, into kind of the summer season. So you have some timing and sequencing there. Within the Aloni portfolio, they did we did move, the witch's brew forward several weeks. So if you're tracking weekly, there will be puts and takes, you know, all the time, but that has moved forward.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

And within, you know, when you're looking at q three within Celsius, it's really about some of the promotional timing there. And you saw that, just, the other question in regards to the club channel. There was a move within a promotional, activity at one of the at Costco, which moved into the third quarter. So there's timing and puts and takes there, that will take place. And, you know, regards to other details in regards to how the quarter is actually gonna turn out, just we're not gonna provide forward looking information.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

It's just, it's really difficult right now. We stand by, the modeling call with the adjust outside of the adjustment that Eric or Jared mentioned in regards to the gross profit margins, which are coming in, slightly better on the top end, than expected. So thank you.

Operator

And at this time, mister John Fieldly, I'll turn the call back over to you.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

Thanks again for joining us today. Q two was a strong quarter that reflects the power of our portfolio, the discipline of our team, and the strength of the category. Aloni New delivered breakout growth. Celsius maintained momentum across channels, and we executed with focus across innovation, operations, and retail. I wanna thank our employees and our partners and for their teamwork and dedication that enables us to deliver our growth.

John Fieldly
John Fieldly
President, CEO & Chairman at Celsius

As we look ahead, remain committed to the long term strategy, driving sustainable growth profitably, driving through lead brand leadership, disciplined 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 live fit.

Operator

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

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