0001341766-26-000039
SEC filingRevenue surged 137.7% to $782.6M driven by Alani Nu and Rockstar acquisitions, but gross margin contracted to 48.3% on promotions and aluminum costs.
Revenue for Q1 2026 was $782.6 million, a 137.7% increase from $329.3 million in Q1 2025. The growth was primarily driven by the acquisitions of Alani Nu (closed April 2025) and Rockstar (closed August 2025), contributing $368.1 million and $66.6 million, respectively. Gross profit rose 119.3% to $378.1 million, but gross margin contracted 400 basis points to 48.3% from 52.3%, attributed to increased promotional activity as a percentage of revenue, higher aluminum costs, and freight disruptions from integration and tariffs. Selling, general and administrative expenses increased 95.0% to $234.6 million, reflecting the expanded three-brand portfolio, marketing investments, acquisition-related costs, and a $25.5 million charge for an ongoing legal matter, partially offset by lower deal costs versus the prior year. Net income attributable to common stockholders more than doubled to $85.1 million ($0.33 EPS) from $34.4 million ($0.15 EPS), benefiting from revenue growth but partially offset by preferred stock dividends and higher interest expense. The effective tax rate decreased to 19.9% from 27.2% due to foreign tax credit utilization and windfall tax benefits from stock compensation.
North America revenue grew 143.8% to $747.3 million, accounting for 95.5% of total revenue, driven by the Alani Nu and Rockstar acquisitions. Europe revenue increased 35.9% to $25.4 million, while Asia-Pacific surged 211.7% to $7.0 million, reflecting new market launches. Other international markets contributed $3.0 million, up 60.4%. The geographic mix shifted heavily toward North America, with international markets still nascent but showing strong growth rates.
Management highlighted macroeconomic risks including tariff impacts (U.S. and retaliatory) on raw materials and aluminum costs, and geopolitical tensions in the Middle East affecting fuel and energy. The One Big Beautiful Bill Act (OBBBA) signed July 2025 introduced tax changes including permanent 100% bonus depreciation; the impact on the 2026 annual effective tax rate is not expected to be material. No specific numerical guidance was provided, but the company emphasized continued investment in brand awareness, distribution expansion, and portfolio integration. Cash flows from operations decreased due to significant distributor termination settlements ($224.1 million), but liquidity remains strong with $549.2 million in cash and a $100 million revolving credit facility.
Cash and cash equivalents increased to $549.2M from $398.9M at year-end, with no restricted cash remaining. Total debt net of unamortized costs was $675.9M, including a $696.5M term loan (matures 2032) with an effective interest rate of 6.78%. Shareholders' equity rose to $1.25B from $1.18B, driven by net income of $110.1M. Inventory increased to $364.1M, with $106.0M in raw materials and $267.0M in finished goods. Deferred revenue (current and non-current) totaled $422.1M, primarily from the Pepsi transactions.
As of March 31, 2026, the company had $982.9M in purchase commitments to third parties, primarily related to supply agreements, due within five years. Notably, Pepsi reimbursed the full $275.0M for distributor termination fees, which are being amortized as deferred revenue over ~17 years. The company also faces ongoing litigation, including the Strong Arm Productions case where $85.0M was accrued as the best estimate within a $60.4M-$105.0M range.
During Q1 2026, Celsius repurchased 0.7M shares for $24.1M at an average price of $35.39, with $236.1M remaining under the $300M program. An additional $8.8M was used for employee tax withholdings. Dividends on preferred stock totaled $14.0M ($6.8M Series A, $7.2M Series B). Debt reduction was minimal ($1.8M repaid). Capital expenditures were $7.9M, or 1.0% of revenue, focused on property, plant, and equipment.
The company operates as a single reportable segment. Note 14 provides a segment-level P&L: revenue of $782.6M, cost of revenue (ex-freight) $348.8M, outbound freight $55.7M, gross profit $378.1M, selling/marketing $150.6M, G&A $84.1M, distributor termination fees $4.4M, and operating income $139.0M (17.8% margin). Geographically, North America contributed $747.3M (95.5%), Europe $25.4M (3.2%), Asia-Pacific $7.0M (0.9%), and other $3.0M (0.4%). Revenue growth of 137.7% YoY reflects acquisitions of Alani Nu and Rockstar.
Net income of $110.1M exceeded operating cash flow of $73.7M, indicating non-cash benefits and working capital outflows. Key adjustments: depreciation/amortization $9.1M, stock-based comp $7.6M, and deferred taxes $9.5M. Working capital consumed cash: accounts receivable increased $80.0M (including $29.3M from a related party), inventories up $28.2M, and accrued distributor termination fees paid $224.1M (offset by $93.2M increase in accrued promotional allowances). Capex of $7.9M remained low (7.2% of CFO), signaling asset-light operations. Free cash flow of $65.8M covered dividends ($14.0M) and share repurchases ($28.9M) with a surplus of $22.9M. Financing cash outflow primarily due to debt repayments ($1.8M), contingent consideration ($11.2M), and repurchases. Overall, cash generation declined year-over-year but remained solid, with ample FCF to support capital returns.