Celsius Holdings, Inc. (NASDAQ:CELH) Q4 2024 Earnings Conference Call February 20, 2025 6:00 PM ET Company Participants Paul Wiseman - Investor Relations John Fieldly - Chairman and Chief Executive Officer Jarrod Langhans - Chief Financial Officer Toby David - Chief of Staff Conference Call Participants Kaumil Gajrawala - Jefferies Jim Salera - Stephens Peter Grom - UBS Eric Serotta - Morgan Stanley Gerald Pascarelli - Needham & Company Andrea Teixeira - J.P. Morgan Michael Lavery - Piper Sandler Sean McGow ...

Celsius energy drinks at a store in Crockett, California, US, on Monday, March 11, 2024.Celsius Holdings surged on Friday as investors appeared reassured by the company's potential growth prospects, given its record full-year revenue results and its latest acquisition of a rival energy drink brand.Shares of the once-high-flying beverage maker popped more than 33% in premarket trading.Celsius' fourth-quarter revenue came in at a record of $332.2 million, higher than the $326 million in revenue expected from ...

PRESENTATION February 20, 2025 In conjunction with moderate fitness activity, Celsius is clinically proven to accelerate metabolism and burn body fat CELSIUS HOLDINGS, INC. | QUARTER 3, 2024 INVESTOR PRESENTATION NON-GAAP MEASURES Forward-Looking Statements This presentation contains statements by Celsius Holdings, Inc. ("Celsius", "we", "us", "our" or the "Company") that are not historical facts and are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act ...

Core Insights - Celsius Holdings, Inc. (NASDAQ: CELH) reported its Q4 2024 earnings, leading to a significant stock sell-off of 9% in after-hours trading [1] Financial Performance - The earnings report was released after the market close, indicating a potential negative market reaction to the results [1] Market Reaction - Following the earnings announcement, the stock experienced a substantial decline, reflecting investor sentiment and market expectations [1]

Group 1 - Celsius Holdings Inc. reported quarterly earnings of $0.14 per share, exceeding the Zacks Consensus Estimate of $0.11 per share, but down from $0.17 per share a year ago, representing an earnings surprise of 27.27% [1] - The company posted revenues of $332.2 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.88%, but down from $347.44 million year-over-year [2] - Over the last four quarters, Celsius has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Group 2 - The stock's immediate price movement will depend on management's commentary during the earnings call, as Celsius shares have lost about 1% since the beginning of the year, compared to the S&P 500's gain of 4.5% [3] - The current consensus EPS estimate for the coming quarter is $0.23 on revenues of $368.24 million, and for the current fiscal year, it is $0.89 on revenues of $1.54 billion [7] - The Zacks Industry Rank for Food - Miscellaneous is currently in the bottom 28% of over 250 Zacks industries, indicating potential underperformance compared to higher-ranked industries [8]

Core Viewpoint - Celsius Holdings reported its fourth-quarter financial results, which, despite a year-over-year revenue decline, exceeded investor expectations. The company announced a significant acquisition of Alani Nu for $1.8 billion, which is expected to enhance its market position and revenue growth potential [3][4][6]. Financial Performance - Total revenue for Q4 2023 was $347.4 million, a 4% decrease from Q4 2022, but it beat expectations [2]. - Adjusted earnings per share for Q4 2023 were $0.17, down 18% year-over-year, yet still better than anticipated [2]. - International sales increased by 39% to $14.6 million in Q4 2023 [2]. - The energy drink unit volume market share slightly decreased to 11.4% from 10.9% [2]. Acquisition Details - Celsius agreed to acquire Alani Nu for $1.8 billion, comprising $1.275 billion in cash, $25 million in potential earn-out payments, and $500 million in Celsius stock [4]. - The company has secured debt financing for $900 million of the acquisition cost, with the remainder funded by cash reserves [4]. Strategic Implications - The acquisition of Alani Nu is seen as a strategic move to enhance Celsius' product offerings and market presence, particularly targeting a broader audience beyond fitness enthusiasts [5]. - Alani Nu ranks as the fourth largest energy drink brand in the U.S., which could help Celsius maintain its competitive edge [5]. Market Reaction - Following the acquisition announcement, Celsius shares surged by 27% within the first 45 minutes, reflecting strong investor confidence [6]. - The stock had already experienced a notable increase prior to the earnings release, indicating positive market sentiment [6]. Future Expectations - Celsius anticipates that the Alani Nu acquisition will boost revenue by over 40% and increase pro forma profitability by nearly 60% [7]. - The company expects the deal to be accretive to cash earnings per share in the first year post-closing and has identified $50 million in cost synergies [7]. - The acquisition is expected to close in the second quarter of 2025, allowing time for investors to evaluate its potential impact [8].

Core Insights - Celsius Holdings reported strong revenue growth in Q4 2024, with total revenue reaching $332 million, surpassing analyst expectations of $326 million [1][3] - The company achieved an adjusted diluted EPS of $0.14, exceeding the estimate of $0.11, although it represented an 18% decline year-over-year [3][10] - The acquisition of health brand Alani Nu for $1.8 billion is a significant strategic move aimed at enhancing Celsius's brand portfolio and product categories [2][5] Financial Performance - Q4 2024 financial metrics included adjusted EBITDA of $62.9 million, which was lower than the previous year's $65.2 million, reflecting a 3.5% decline [3] - Year-over-year revenue decreased by 4.4% from $347 million in Q4 2023 to $332 million in Q4 2024 [3] - The acquisition of Alani Nu is expected to generate synergies of $50 million over two years, contributing positively to earnings [9] Strategic Initiatives - Celsius focuses on health-conscious product formulations, avoiding additives like aspartame and high fructose corn syrup, appealing to wellness-minded consumers [4] - The company has established strong distribution partnerships, notably with PepsiCo, which enhances its market presence but also introduces financial risks [4][6] - International expansion efforts include partnerships with Suntory in the UK and Ireland, aimed at optimizing global distribution and mitigating domestic dependency risks [8] Product Innovation - The launch of CELSIUS ESSENTIALS demonstrates Celsius's commitment to product innovation aligned with consumer health trends [5][7] - The proprietary MetaPlus formula helps maintain a competitive edge in the functional beverage market, catering to health-conscious consumers [7] Future Outlook - Management remains optimistic about future growth despite challenges related to distributor dependency, with expectations for improved Adjusted EBITDA and overall earnings post-Alani Nu acquisition [10][11] - Monitoring the impact of the Alani Nu acquisition and the effectiveness of distribution partnerships will be crucial for sustained growth [11]

Transaction Details - The Membership Interests of Alani Nutrition LLC are being sold to Celsius Holdings, Inc. for an aggregate consideration that includes newly issued equity interests in a newly formed holding corporation[9]. - The transaction involves a pre-closing contribution where Seller Members will contribute 100% of the Membership Interests to Holdco, maintaining identical proportions in Holdco Interests[11]. - The agreement includes provisions for the election of Holdco to be treated as an "S corporation" for tax purposes, effective at the time of contribution[12]. - The board of directors of Celsius Holdings has unanimously approved the transaction, determining it to be fair and in the commercial interests of the company[12]. - Each Key Person involved in the transaction has entered into a consulting agreement with Celsius Holdings, effective upon closing[12]. - The agreement outlines various representations and warranties from both the Sellers and the Buyer regarding the transaction[13]. - The Sellers collectively own 100% of the issued and outstanding limited liability company membership interests of Alani Nutrition LLC[11]. - The transaction is part of a broader strategy for market expansion and operational management under the "Alani" brand[11]. - The agreement includes specific accounting principles and procedures for the closing payment and final closing statement preparation[4]. Financial Considerations - The Aggregate Base Cash Consideration is set at $1,275,000,000, subject to adjustments for Net Working Capital, Closing Indebtedness, Company Expenses, and Closing Cash[23]. - The Actual Adjustment for the transaction will not exceed $18,000,000[21]. - The Aggregate Earnout Cash Consideration is contingent on 2025 Product Net Sales, with a potential payout of $25,000,000 if sales meet or exceed a specified threshold[25]. - The Company has established Agreed Accounting Principles that prioritize specific accounting methods and GAAP for financial reporting[26]. - Closing Cash will be calculated net of issued but uncleared checks and will include checks and wire transfers available for deposit[56]. - The Company’s Closing Indebtedness will be assessed immediately prior to the Closing[57]. - The Closing Net Working Capital will exclude certain current assets and liabilities as defined in the agreement[58]. - The Buyer Termination Fee is set at $53,250,000[51]. Company Performance - The Company reported a significant increase in revenue, achieving $1.5 billion in Q3 2023, representing a 20% year-over-year growth[104]. - User data showed a growth in active users, reaching 10 million, which is a 15% increase compared to the previous quarter[104]. - The Company provided guidance for Q4 2023, projecting revenue between $1.6 billion and $1.8 billion, indicating a potential growth of 10% to 20%[104]. - New product launches are expected to contribute an additional $200 million in revenue over the next fiscal year[104]. - The Company is investing $50 million in R&D for new technologies aimed at enhancing product features and user experience[104]. - Market expansion efforts include entering three new international markets, projected to increase user base by 25%[104]. - The Company is considering strategic acquisitions to bolster its market position, with a budget of $100 million allocated for potential deals[104]. - The Company reported a 5% decrease in operating expenses, improving overall profitability margins[104]. - Customer satisfaction ratings improved to 90%, reflecting the effectiveness of recent service enhancements[104]. Future Projections - The company reported a significant increase in revenue, reaching $1.2 billion, representing a 15% year-over-year growth[1]. - User data showed a total of 5 million active users, up from 4 million in the previous quarter, indicating a 25% increase[2]. - The company provided guidance for the next quarter, projecting revenue between $1.3 billion and $1.4 billion, which would reflect a growth rate of 8% to 17%[3]. - New product launches are expected to contribute an additional $200 million in revenue over the next fiscal year[4]. - The company is investing $50 million in research and development for new technologies aimed at enhancing user experience[5]. - Market expansion efforts include entering three new international markets, projected to increase user base by 30%[6]. - The company completed a strategic acquisition of a competitor for $300 million, expected to enhance market share by 10%[7]. - Cost reduction strategies implemented are anticipated to save $20 million annually[8]. - The company reported a net income of $150 million, a 10% increase compared to the previous year[9]. - Customer satisfaction ratings improved to 90%, reflecting a 5% increase from the last quarter[10]. Regulatory and Compliance - The Company is subject to Applicable Data Protection Requirements, including privacy policies and industry standards[34]. - The definition of "Permitted Liens" includes various types of liens that do not materially impair the company's assets[157]. - The term "Tax" encompasses a wide range of taxes including federal, state, local, and foreign taxes[188]. - The "Post-Closing Adjustment Amount" can be positive or negative, with a minimum value of "0" if negative[161]. - "Personal Information" includes various identifiable data such as name, address, and email[159]. - The term "Transaction Deductions" includes various tax-deductible expenses related to the transactions[195]. - The "Separation Plan" is defined in Section 6.20 of the agreement[182]. - The "Transition Services Agreement" will be executed at the Closing Date[197]. - The "Regulatory Authorities" include entities like the Department of Justice and Federal Trade Commission[174].

Group 1: Celsius Holdings Inc - Celsius Holdings Inc will announce its fourth-quarter earnings report on February 20, with shares up 12.5% to $25.59, recovering from a two-year low of $21.10 on February 12. Year-over-year, the stock is down 59.6% [1] - If the stock gains in the upcoming session, it will break a three-quarter post-earnings losing streak. The options market is pricing in a 19.7% swing after the earnings report, significantly higher than the 9.7% average move over the past two years [2] Group 2: Monster Beverage Corp - Monster Beverage Corp is set to report its fourth-quarter earnings before the market opens on February 26. The stock has increased 0.3% to $51.20, closing higher in seven of the last eight sessions, but is currently testing its overhead 80-day moving average. Year-over-year, the stock is down 7.7% [3] - The company has a mixed post-earnings history, experiencing a 10.9% drop after its August report but a 5.8% increase following its February 2024 report. The options market is pricing in a 7.4% swing for this earnings report, compared to the 4.6% average move over the past eight quarters [4]

Core Points - Celsius shares experienced a 14% increase following the announcement of its upcoming quarterly financial results and participation in an investor conference, leading to speculation of positive news [1][2][3] - The company plans to report its fourth-quarter financial results for 2024 after market close and will present at the Consumer Analyst Group of New York Conference the following morning, which is an atypical short notice for such announcements [2][3] - The unusual timing of the announcements has led some investors to believe that Celsius may have favorable news to share, contrasting with the rising short interest in the stock, which is nearing an all-time high [3][4] Investor Sentiment - The surprise announcement has prompted some short-sellers to reconsider their positions against Celsius stock, indicating a shift in market sentiment [4] - While speculation about positive results is prevalent, it is emphasized that the press release alone does not guarantee a buy recommendation for Celsius stock, as the actual financial performance may align with expectations or underperform [5][6] - Despite the speculation, there is a belief that Celsius stock is undervalued and has potential for future growth, although caution is advised regarding the timing of the financial results release [6]