Celsius Holdings Q4 2025 Earnings Call Transcript

Celsius Holdings, Inc. (NASDAQ:CELH) reported fourth-quarter financial results before the market open on Thursday. The transcript from the company’s fourth-quarter earnings call has been provided below.

This transcript is brought to you by Benzinga APIs. For real-time access to our entire catalog, please visit https://www.benzinga.com/apis/ for a consultation.

Operator

Hello everyone. Thank you for joining us and welcome to the Celsius holdings fourth quarter 2025 earnings conference call. After today’s prepared remarks, we will host a question and answer session. If you would like to ask a question, please press Star one on your telephone keypad. To withdraw your question, press Star one again. I will now hand the call over to Paul Wiseman and Investor Relations. Please go ahead.

Paul Wiseman (Investor Relations)

Good morning and thank you for joining Celsius Holdings 2025 earnings webcast. With me today are John Fieldley, Chairman and CEO, Jared Langens, Chief Financial Officer and Toby David, Chief of Staff. We’ll take questions following the prepared remarks. Our fourth quarter and full year 2025 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. 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 will present results on both a GAAP and non GAAP basis. Non GAAP measures like adjusted EBITDA, adjusted EBITDA margin, adjusted Diluted earnings per share, adjusted SG&A and adjusted SG&A as a percentage of revenue and their GAAP reconciliations are detailed in our Q4 and full year 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 (Chairman and CEO)

Thank you Paul Good morning everyone and thank you for joining us today to discuss our fourth quarter and full year results for fiscal year 2025. As I look back on 2025, the message is clear. We continue to execute with momentum and operating discipline and we are reinforcing the scale of our platform as we build a modern energy portfolio. One of the reasons we feel good about the progress is that we delivered full year record revenue of 2.5 billion reflecting our disciplined approach to growth and the material scale we’ve accomplished. At the core, our focus is straightforward, we stay close to the consumer and we execute with consistency alongside Pepsi and our retail partners which creates the opportunity to grow in a sustainable and profitable way over time. With that as context, let me start with the portfolio. What we see across Celsius, Alani Nu and Rockstar Energy Drink across the portfolio, we continue to manage and invest in Celsius, Alani Nu and and Rockstar Energy Drink with the intent to broaden our reach. Our combined portfolio represents approximately one fifth of the US Energy market in track channels for the full year, which we believe to be very impressive both on an absolute basis and relatively. In addition, Our portfolio includes $2 billion brands validating that sustainability and scale of our portfolio. Each brand can win in its own way and our focus is to enable that to happen more and more. We operate with precision, making sure that we are present where it counts, bringing the right innovation and activating demand in a way that strengthens our core, not just the moment. When you look at the Celsius brand, the opportunity is about strengthening momentum and executing in a way that positions us to outgrow the category over time. We are focused on the fundamentals that drive that outcome, staying disciplined with skew productivity, sharpening revenue growth management and promotional efficiency, maintaining a consistent innovation cadence and elevating market execution. With Pepsi and our retail partners, particularly during key priority periods, Live Fit Go continues to be the core part of how we connect with consumers and we remain focused on the long term Runway and household penetration, expanding reach while also driving frequency and loyalty. As modern energy becomes more embedded in daily routines for Aulani, we continue to see momentum supported by the strength of our core brand and the opportunity to expand distribution. As the brand transitions into the PepsiCo system, we are focused on what is complete, what remains in motion and what improves as the transition finishes. We saw the momentum with Cherry Bomb as the first limited time offer in the PepsiCo system. We are taking those key learnings forward and with Rockstar, our integration remains on track and we expect to complete the remaining integration in the first half of 2026. Importantly, this is not just about completing one integration, it’s about strengthening our growing operations. We are building repeatable processes, executing transitions with discipline and refining a playbook that improves how we manage complexity across our growing portfolio. On that note, let me give you a quick update on the integration and transition progress across the portfolio. Starting with Alani Nu, we are making strong progress moving the business into the PepsiCo system. As of year end, we are substantially complete on the US DSDSD transition. The way we’re approaching the remaining work is intentional and methodical and is designed to make sure we set up the portfolio the right way with Pepsi and our retail partners and they are brought in on this too. We believe we are set up for success and we continue to expect the Aulani implementation and integration to be completed by the end of the first quarter of 2026. With Rockstar, we are progressing through the remaining integration steps and staying focused on the work required to fully bring the brand into our operating model. We are executing against a clear plan and remain on track to complete the integration in the first half of 2026. And when you talk about success it is very clear it is consistent execution, a more focused skew set and improving the margin structure over time as we bring the brand further into our platform. As we think about brand health and durability, our view is rooted in what drives loyalty and relevance across the portfolio. We continue to differentiate through sugar free and flavor innovation and we believe the category continues to support brands that stay closely aligned with evolving consumer preferences. Looking at 2026, our focus is on making sure that that loyalty and brand relevance remains durable. That means staying consistent on what each brand stands for, continuing to bring innovation that creates trial and drives frequency and executing with that kind of operational discipline that protects the long term value of our business. We kicked off 2026 by making our Fizz Free line available nationally and we see a meaningful opportunity as there is many consumers that prefer beverages without carbonation or like the optionality of FIS or fizz free. Across 2026 you will see a more intentional innovation and a limited time offer cadence supported by broader distribution and strong end market execution. For Aulani that also includes expanding distribution of the core SKUs. As we complete the transition into the PepsiCo system, International represents a meaningful long term growth opportunity for us to Today we are present in approximately 10 markets while international remains a smaller portion of the total business. We see a significant Runway as global consumer trends increasingly mirror what we’re seeing in the US particularly around fitness, wellness and better for you energy. Our approach to expansion is intentional. We are prioritizing focused market selection, clear entry plans and ensure the right execution model is in place before we scale. This is not about entering as many markets as possible, it’s about building our brands the right way with strong local partnerships, disciplined launch plans and sustained marketing and distribution support. To support this next phase, we brought on Garrett Quigley as President of International. Garrett brings deep experience scaling beverage brands globally and is building a dedicated international sales and marketing organization to expand our footprint in a thoughtful and profitable manner. As global consumer behaviors continue to shift towards zero sugar functional energy that fits into daily routines, we believe our portfolio is well positioned to participate in that structural growth. We will continue to prioritize strong execution and long term value creation as we build our international presence. That same focus on execution and scale also shapes how we’re evolving our marketing capabilities. On marketing, we’re continuing to sharpen how we tell our story and activate demand across the portfolio. Historically, our brands use separate creative teams across different companies, a key step forward in the creation of our new brand studio, a full service in house agency built to drive brand growth with speed, consistency and sophistication. More than a creative team, a brand studio is a strategic engine that will shape, produce and scale how our brands show up across every consumer touchpoint from packaging and campaigns to digital first content and 3D motion graphics. And importantly, this strengthens our ability to run the portfolio in a more intentional way, helping us reach more consumers and connect awareness to trial and ultimately to retail activation. The scale of our portfolio allows us to leverage the team maintain clear control of each brand’s voice. Innovation remains central to how we grow the portfolio. That includes leaning into consumer preferences like fizz-free while also deploying limited time offers in a disciplined way. For us, limited-time offers are not about chasing short term spikes. They are about expanding the funnel driving incremental trial, reinforcing the strength of the core portfolio. When executed with the right distribution and retail alignment, they can become a repeatable lever within our broader growth framework. Energy remains one of the most attractive growth areas in beverage with zero sugar offerings leading expansion. We believe our positioning allows us to help grow the category, not just participates in it by staying relevant to consumers and executing with discipline across both mature and white space markets. And that matters because it speaks to the Runway. In more mature markets the work is about consistency, innovation and driving frequency. In white space markets the focus is on building awareness, expanding distribution and scaling trial all while staying disciplined to how we execute. Our partnerships and activations are part of how we do that. We continue to leverage partnerships and others to connect awareness to trial and then the retail activation. These programs are designed to put the brands in motion, in real consumer moments and to convert that energy into band where consumers shop. Through our social media community building as well as our macro and micro influencer bases, we are building excitement, brand brand awareness and loyalty to further grow the brands. And we’re also proud to see a Lonnie new recognized by BevNet’s 2025 brand of the Year. Congratulations to all of our team members. That recognition reflects the strength of our brand and the momentum we’re building as we expand reach and execution. Finally, as we look ahead, we have a clear strategy of priorities for 2026 and believe they will support sustainable, profitable growth. Our focus on continuing the strength in the platform we have built, executing with discipline across the portfolio and staying closely aligned with consumers as the category continues to evolve across each of these priorities, our intent is the same execute consistently strengthen our operating system and create long term value. With that, I’ll turn it over to Jared to walk through our financials. He’ll begin with some context around the Rockstar accounting treatment, then cover full year and quarterly results.

Jarrod Langhans (Chief Financial Officer)

Thanks John and good morning everyone. From a financial perspective, we have a lot to cover. As John noted, I’ll begin with Rockstar given the accounting treatment during the integration, then move to Alani and brand Celsius to walk through the components of our consolidated results beginning with Rockstar. During the quarter, we were actively integrating the brand into our supply chain, back office and commercial organization, which impacted how certain sales activities reflected under generally accepted accounting principles. As a result, some components were required to be recorded in other income rather than net sales. For the quarter, $45 million was recorded within net sales and an additional $6 million was recorded in other income. As we move into the first quarter, we expect to fully transition the US Portion of the business to the finished goods model and we expect that only the Canadian portion will remain in the other income. We expect the Canadian portion to transition to the finished goods model in the first half of 2026. On a full year basis, we recorded $56 million in net sales for Rockstar and an additional $13 million in other income. And as we sit here six to eight weeks into 2026, we remain confident the brand continues to resonate with many consumers and we have a plan to stabilize the business and move it back into growth and over the next handful of years. As previously discussed. Turning to Alani New during the fourth quarter, Alani achieved record net sales of $370 million, benefiting from significant ongoing customer demand, increased distribution points and increased orders as we move the business out of its prior distribution system into the PepsiCo distribution system on a pro forma basis, that would equate to growth of 136% for the quarter compared to the prior year. In the nine months since we purchased the brand, Alani has contributed $1 billion to our net sales. During the quarter, we continued to execute against the integration plan we presented in May and we are pleased to note we remain on track, including moving the business into our supply chain, back office and commercial operations. We have also moved a substantial portion of the distribution network into the Pepsi system with only a few pieces of the DSD network remaining operations outside of Pepsi today. Moving a substantial portion of the business into Pepsi was a significant operational milestone and I want to recognize the teams across our organization, our former distribution partners and Pepsi for making that happen as seamlessly as it did. We also saw the execution show up in innovation. Cherry Bom Our first Alani LTO launched in the Pepsi system and was very successful, running out in record time with strong pull through. We saw increased orders in the last few weeks of the year above and beyond our initial projections, supporting triple digit growth in the first six to eight weeks of the year. As we look across 2026, we expect continued expansion into more locations with more SKUs and overall triple digit space gains. As expected, the transition of Alani into Pepsi drove increased orders and strong execution which in turn impacted reported results for brand Celsius and as we manage the timing and sequencing of inventory movements within the Pepsi system as we balance the Alani load in with total inventory across the network. As a result, scanner data is a healthy 12.8% for the quarter while underlying gap sales for celsius showed a 7.7% decline due to the timing activities noted when combining brand Celsius inventory movements with the Alani load in the company had a net benefit of approximately $25 million. Just a year ago we were coming off a period in which both the category and Brand Celsius experienced pressure in the back half of 2024 with some continued softness in the first quarter of 2025. As a result, we put a plan in place across our commercial organization and we are pleased by the improvement seen since then where track sales are more aligned with the upper range of the energy category growth. As a result, for the full year brand Celsius delivered $1.46 billion of net sales to growing 7.5% year over year. So combining everything for the fourth quarter consolidated revenue was approximately $722 million and full year consolidated revenue was $2.5 billion including having $2 billion brands. Taking a step down the P and l For the three months ended December 31, 2025, gross profit increased by $175.1 million to $341.8 million from $166.7 million for the prior year period. Gross profit margin was 47.4% compared to 50.2% in the prior year period reflecting dilution from Rockstar Energy, higher cost of product related to integration costs and tariffs partially offset by improved outbound freight, lower consolidation buildbacks as a percentage of revenue, and favorable product impact mix. As previously discussed, gross margin was impacted by one time integration and distribution transition costs associated with the timing and sequencing of integrating Alani New and Rockstar and transitioning Alani into the Pepsi DSD system. While operational efficiencies and revenue growth management will be ongoing initiatives, we continue to expect the Alani integration to be completed by the end of the first quarter of 2026 and we expect the Rockstar integration to be completed in the first half of 2026. As integrations progress and ongoing initiatives take hold, we expect margins to expand across 2026 and return to a more normalized profile with gross margins in the low 50s driven by savings across raw materials, scrap manufacturing, tolling fees, freight and package and brand mix offset in part by tariffs and aluminum costs. For the full year, gross profit increased by approximately $1.27 billion from $680 million in 2024. Gross profit margin increased by 20 basis points from the prior year to 50.4% in 2025. Sales and marketing expense in the fourth quarter was $249.2 million

…With that, I’ll turn the call back to the operator to open the line for questions.

Operator

We will now begin the question and answer session. Please limit yourself to one question. If you would like to ask a question, please press Star one on your telephone keypad. If you would like to withdraw your question, press Star one again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q and A roster. Your first question comes from the line of Filippo Filorni with Citi. Your line is open. Please go ahead.

Citi Analyst

About the shelf space gains that you discussed last week at the Cagney Conference for both Celsius and Alani. Can you give us a bit of an update on the spring shelf space resets and when we should start to see some of the benefits on the shelf space gains and then in particular for the brand Celsius. You explained the gap versus consumption in Q4. That was very helpful to add it to the release. So thank you for that. So could we see an improvement in Q1 as you think about on a reported sales basis given the shelf space for brand Celsius?

John Fieldly (Chairman and CEO)

Thank you, thank you morning and appreciate the questions and regards to the shelf gains, you know, historically we’ve seen them really materialize, you know, through and kind of finalize right around the end of spring has historically been when the final resets take place as everyone’s gearing up, as we call, you know, the beverage summer selling season. So we do expect those to continue to materialize through the end of spring really with the biggest gains, especially for Alani, would be inconvenience. So that’s been a big white space opportunity for the portfolio as well as with the Celsius portfolio. And you know, really excited about as we’re heading into summer especially leading off with a lot of our innovation that’s coming in regards to some of the timing and some of the differences as we look to consumption data versus the the revenue that’s recognized as we sell through to our distributor. There is timing and sequencing. Jared made some comments on that in our prepared remarks. Jared, you want to provide any color? Historically we don’t provide any forward looking information but we do anticipate, you know, there could be gaps going forward within consumption on a weekly or within a moment of time. But over the long term let’s start to see some more consistency there. But Jared, yeah, I mean if you look at it from a portfolio perspective, I think you’ll see it tighten up quicker than if you’re going specifically brand by brand because we are looking at different things across the calendar. So for instance we just launched an lto the Lime slush. It’s delicious with Alani. So you’ll see some spikes in some of the data. We also have LTOs coming out with Celsius this year. So depending upon the timing of those activities, you might see some differences within the scanner data versus load ins and those kind of things. And then as we continue to expand distribution with Alani in particular, as we continue to move across the the Pepsi system and gain shelf space, you’ll see some expansion there. And then you also see expansion within celsius with the 17 space gains that we had as well.

Citi Analyst

Excellent.

Operator

Great. Thank you. Your next question comes from the line of Peter Grom with UBS. Your line is open. Please go ahead.

UBS Analyst

Great. Thank you everyone. Good morning. I wanted to follow up on that. Obviously a lot of moving pieces as it relates to the top line growth. But when we think about the 25 million net benefit from selling Celsius versus the money, can we, can you help us unpack what that looks like from a brand perspective? And then I guess, you know Jared, maybe more specifically as you think about Alani, would you expect inventory levels to remain elevated, you know, as we move through this transition and similar to kind of what we saw when Celsius moved into the Pepsi system a couple of years ago, implying that maybe more of the unwind would be a 4Q into 27 dynamic or would you anticipate maybe kind of some under shipment to Terra car faster?

John Fieldly (Chairman and CEO)

Thanks. Thanks Peter. So as we’re looking at Q4 and into the future, I’d say John and I are committed to tightening up the peaks and the valleys of the data. With the captaincy and the more aligned partnership we have with our largest distributor, we’re definitely much tighter and working very closely. We actually had the supply chain from their team in back in January. So we’re committed to really tightening up those peaks and valleys from an operational perspective. We’ll continue to have our supply chain and commercial teams focus on what ultimately is going to drive the success of our modern modern energy portfolio, which is winning at the register as that is, you know, that’s where we’re going to win or lose. So if we have the opportunity to load an additional volume of one brand kind of out or near the end of a quarter while adjusting another brand while maintaining our service levels and the growth of those brands, you know, that’s something that we’re committed to doing so that we win. So as we look at kind of the results that you saw in the quarter, we benefited to the tune of roughly $25 million in our reported results. We were excited to see brand Celsius come out of the gate with low double digit growth and great service levels while seeing Aulani kind of rocket out of the gate with triple digit growth. And we have seen brand Celsius orders align more closely to the track data as we look at kind of the initial deliveries and orders in 2026. I will caveat that by saying there are four to five more weeks in the quarter. So we’ll continue to manage the business holistically and make adjustments along the way as we do manage the portfolio. So I think there again we’ll manage the peaks and the valleys. I think as a portfolio play in a much more scale business, we’ll be able to get those a bit tighter and manage that. So we don’t have as many kind of as much volatility as we’ve seen historically when we just had a one brand and when we were really learning each other within that supply chain. If I go back to kind of Q4 and I boil it down if, if I’m looking at our Supply chain around DSD in particular, as we approach the end of Q4, we did adjust an additional week for brand Celsius and loaded in additional. That benefited Alani and it benefited the portfolio as from a net basis as I said. So this didn’t have an impact on service levels and we continue to win at the register with both brands. And as John mentioned, as a proof point, we’re picking up roughly 17% additional space with brand Celsius and 26 really as a result of that scanner growth and obviously even more with Aulani. Triple digit space gains with Aulani.

Operator

Your next question comes from the line of Bonnie Herzog with Goldman Sachs. Your line is open. Please go ahead.

Goldman Sachs Analyst

Thanks. Good morning. I guess I had a question on gross margins. You mentioned you expect your gross margins to return to a more normalized profile in the mid 50% range across this year. So maybe first could you touch on the potential impact that the Midwest premium is having on your business near term and then second, can you give us a sense of phasing your know, gross margins this year and then I guess beyond this year, how should we think about the evolution of your margins over the next few years? You know, can you highlight maybe some of the key puts and takes that we should think about? Thank you.

John Fieldly (Chairman and CEO)

No. Excellent. Question and I will say in regards to our, you know, the, the margin profile and a lot of the infrastructure and strategies we’ve built about building out our orbit model with the Celsius portfolio, further looking at opportunities with supply chain purchase strat purchasing strategies as well as vertical integration with the acquisition of our CO packer over a year ago, really driving further leverage and scale and efficiencies through that location. We also, as we’re further integrating Aulani and Rockstar as it’s moving through orbit over the next several quarters, we’ll be able to gain additional leverage as well. Jared, you want to provide additional color in regards to some of the timing around that and also some of the opportunities we see as we’re progressing to this low to mid 50 margin profile by the end of the year.

Jarrod Langhans (Chief Financial Officer)

Yeah, so I think our target for this year is to get back to the more normalized low 50s in terms of the opportunity we do see ability to move up into the mid-50s. Like you noted. I wouldn’t necessarily call that a 26 target, but definitely in the a near term target into the next handful of years. Some of the things that are going to drive our, our benefit in order to get back, you know, call it from the, the 474 that we sat in Q4 and work our way to the low 50s are really getting the cost of sales of the, the cogs, the raw material prices in line with what you see with brand Celsius. So we are working through that with Alani and with Rockstar we’re a bit ahead on Alani. So we should have that cost structure in place by the end of Q1. For Rockstar we should have that in place by the end of Q2. Some of that has to do with integration, some of that has to do with just moving through the inventory balances and moving through some of the higher raw material costs as we have them fully integrated. So Aulani will be fully integrated by end of Q1 and Rockstar by the end of Q2. So we’ve got those costs. Some other things that are going to benefit us is our orbit model and our freight structure. Getting them fully baked into that structure will provide us with benefit. Our mix, when you kind of look at a blended mix of our price pack and promotion strategy will also be beneficial. So you kind of put those together. If you look at Q4, some of the kind of one time things we had, we did have some transition costs where we had some cogs write offs and we had some scrap and things like that that were More one time. So those will be gone after Q4 and you know, so we’ll have that benefit directly into Q1. But really the goal is once we get through that first half of the year to be in good shape to get into that low 50s as you look at the back half of the year, those do also factor in the Midwest premium that has picked up as well as tariffs. So depending upon where the Midwest premium goes, there could be some impact in terms of timing and as well as tariffs. If the tariffs kind of subside quicker, then there’s an opportunity to get to some of those numbers quicker.

Operator

Your next question comes from the line of Andrea Teixeira with JP Morgan. Your line is open. Please go ahead.

JP Morgan Analyst

Thank you. Good morning everyone. So I was hoping to see John, if we step back and think about the three brand portfolio and the opportunities of trimming at Some point the stock keeping units and or you think that this cadence of limited-time offers now is Celsius. Like how is the experience that you’ve had and how do you think velocity obviously with increasing in shelf space, obviously we’ll have a reduction in velocity at some point. But just thinking of how to position the stock keeping units, how to position the category and we all know this is a record year of innovation for everyone in the space. So hoping to see how you’re seeing that set and what you’re hearing from the retailers as far as the competitor set and what we think going forward. And just also on just a clarification on the margin. It’s very encouraging to see that you see the opportunity for synergies and improvements in the execution. I also was encouraged to hear from you guys at Cagueni in terms of the systems and visibility. So I was hoping to see if you can kind of wrap it up on how predictable your sales have been with the view from Pepsi and how you can see margins evolving as we go from a promo perspective. Thank you.

John Fieldly (Chairman and CEO)

Excellent. And the question, you’re absolutely right in regards to the overall category and what we’re seeing is driving growth. Innovation has been a key factor of that. And also innovation has been a great not only for our portfolio but the total category. It’s bringing new consumers in and we’re starting to see as incagni we were talking about the evolution of a category. Expanding day parts, expanding usage occasions. Big opportunity is social occasions with energy drinks as we’re seeing alcohol and liquor come into some challenges and headwinds. And what we’re seeing is consumers are switching to energy drinks to as a replacement and that’s A huge opportunity with our Celsius mocktails and dirty Alanis that we have out there. So that’s a big push for us as well to continue to bring excitement and new consumers, new occasions in. When you look at the SKU prioritization, that’s the beauty of a portfolio. We’re able to really maximize the value of the portfolio now with Celsius, Alani and Rockstar making sure we’re maximizing the SKUs and really for the, for the channel and also for a regional basis. So that’s going to allow us to put the fastest turning SKUs on in the coolers in the planograms. The space allocations are also that we’re seeing with resets 17 with Celsius and over 100% with Aulani is allowing us not only getting additional slots and distribution and more, more flavors and availability in retail, but also additional points of disrupt. And having that path to purchase is so important. Those cold checkouts, the impulse purchases, the expanded shelf space and the dry sets. So that’s all going to come into landing on exactly what you’re talking about. Velocity. Velocity is very important in a category. That’s when it’s going to continue to drive it. We feel confident with the innovation, we’re going to see the space gains. We’re focused on velocity with some of our marketing strategies. Jared mentioned lime slush just hitting within our LTO Strategy. And the LTOs are designed to lift up the core, to bring new consumers into the portfolio, into the franchise and then build that daily consumption, daily routine. The other big area we see a huge opportunity is with the female consumer. That’s a big opportunity. We’re seeing them expand purchase occasions. There’s a higher adoption rate that’s taking place as well. And our portfolio is really positioned to, to. To leverage that tailwind with Aulani and with Celsius. So we think we’re really well positioned there, especially as coming through, you know, the finalization of the resets at the end of spring. Really excited about great innovation from an LTO standpoint, not only for Alani, but also for Celsius. We got some great innovation coming out and it’s going to be an exciting summer for us. Talk about the synergies and some of the costs within our system. Jared touched on that in our prepared remarks and I also covered it in regards to some of the investments we’ve made, the vertical integration, the optimization of our purchasing strategies, the further investment we’ve made in revenue management. Revenue management at RGM is a really big component as we maximize the value, we’re not just a singular brand anymore going on promotion against many other brands. We’re really to maximize that value within the portfolio and gain that trial, gain that scale and compete at the highest level within the energy category. So I think when you look at all those components there, where consumers are, where our portfolio is connecting with consumers, and then also the infrastructure we built here with the organization really sets us up to continue to optimize and improve and continue to grow this category.

Operator

Your next question comes from the line of Kevin Grundy with BNP Paribas. Your line is open. Please go ahead.

BNP Paribas Analyst

Great, thanks. Morning, everyone, and great to see you. Cagney, last week, John, just to follow up on Jared for you as well, the distribution gains, again, not to beat the dead horse, but obviously super strong with the lining of triple digits. Celsius up 17. Three questions here, if I may. Number one, what can you quantify what you sort of estimate the distribution gains to be for the category, given the strength? That’d be question number one. Number two, where are the shelf space gains coming from for Lonnie and Celsius? And to the extent it’s sort of above and beyond what you’d expect with the category, which certainly would seem to be the case, where are the shelf space gains being sourced from within the category? And then just lastly, and I think Andrea was sort of touching on this with respect to velocity, when we think about holistically the innovation that’s coming on, which seems like a really strong pipeline, but you’re moving into new areas, new geographies, particularly in convenience, how should we think holistically about velocity growth for Celsius and Aulani this year sort of vis a vis the TDP gains that, that you’re going to benefit from. So thanks for all that, guys. I appreciate it.

John Fieldly (Chairman and CEO)

Now, Kevin, thank you. Great questions. You know, I spent some time on the category on, on the space gains we anticipate for Celsius. But I think to your point in regards to the category, like where’s that coming from? And you know, when you look at the energy category and it continues to grow as a larger percentage of LRB retailers are expanding more space. They’re, you know, they’re expanding half coolers and doors and, and more dry shelves and you know, like in the convenience channel, we’re hearing from a lot of retailers, they’re optimizing some of the beer coolers, you know, just they’re trying to get as much productivity out of these coolers as possible. So You’ve, you’ve heard that juice, you know, juice category as well, and high, high, you know, premium waters as well, has been under pressure. So those are areas that retailers are making those decisions. I think each retailer is a little bit different on how they’re being able to carve out more space. But there is a lot more space coming in the energy category as it’s becoming part of a daily lifestyle, daily routine and daily and expanded usage occasions. Historically, it’s been an impulse purchase and convenience has been a main driver of that, over 60% of sales. But if you look at large format, you know, when you look at the space gains we saw over the last two years, we expect anticipated space gains in large format as they can capture a larger share of that, of those energy drink sales that are continued to grow. So seeing a variety of different retailers react differently, but money and convenience are. We’re hearing cooler doors within the beer category, getting a little optimized there. And you look at where we are within velocity, you know, we’re here to grow velocity. That’s really important. That’s a major KPI within our organization, within our teams. I think, you know, with the space gains, when you look at Alani particularly, we’re going, we’re expanding that distribution, right? So it’s going into a lot of locations that are new, many retailers, many regions. Alani is going to be new. So we will likely see a lower velocity entering, you know, new segments of the, of the, of the regions within also channels and retailers that we’re going to have to, you know, build up those velocities. So, you know, each, each channel is going to be different, each market’s going to be different. But anytime, just like when we saw Celsius, as you expand out broader, we did see reduced velocities as that expansion takes place. And then you build upon that. Remember, consumers are. It’s a daily routine, it’s a daily lifestyle. We gotta get these brands into a cadence. Where consumers are purchasing on a frequency and gaining distribution just doesn’t mean the product starts flying right away. There is great momentum behind these brands. We’re really excited about it. It’s part of the LTO strategy, the innovation strategy, to get trial and awareness. But that is something we’re very keen on, is continuing to build velocity over time.

Operator

Your next question comes from the line of Gerald Pascarelli with Needham Co. LLC. Your line is open. Please go ahead.

Needham Analyst

Great, thank. Thank you very much. A couple things, just a housekeeping question. Going back to the cadence Jared, I just want to make sure I’m understanding this correctly, but are there any parts of the inventory benefit that Aulani got this quarter that should in any way be considered a pull forward in revenue? It doesn’t sound like it just based on the distribution opportunities ahead, but just wanted to confirm that. And then John, just going back to the shelf space growth that you’re expecting for Aulani this year, is there a way for you to broadly contextualize that in terms of what we saw for core celsius back in 2020 when that brand transitioned? I understand that back then, you know, Celsius had been benefiting in part from lost shelf space from Bang. But yeah, just curious if you could provide your thoughts on how we should view that 102% in the context of the prior transition. Any similarities and differences and then I guess you know how that compares in this environment with a more competitive landscape.

John Fieldley (Chairman and CEO)

Thanks. You know, I’ll jump in first. Morning, Gerald. In terms of pull through, I, I do think we saw opportunity to load in even more of a Lonni with the, the ability of the, the Pepsi distribution system and really how quickly they were able to get a Lonni out from an ACV perspective across the shelf. So I think there was, I would call that more of an opportunity than a load in that we took advantage of. And you saw coming out of the gate with the, the triple digit growth that Alanis hit pretty quickly and we continue to see that expand. And then with our cherry bomb we did that was kind of one of the pieces that was loaded in at the end of the year and that really got depleted pretty quickly, record time. So we got the lime slush going out. We’re looking for, you know, hopefully another record from an LTO perspective but that I would definitely see that as more of an opportunistic move as opposed to a pull pullback or pull forward in regards to, you know, some of the expansion. We look back on the Celsius integration expansion through the PepsiCo network and then timing of resets upon that. You know, the Celsius went in in September. Alani’s going in obviously in December. There are some similarities but there’s many differences as well. I think when you look at, you know, Celsius and Aulani when they were starting off, Celsius was at a lower ACV versus where Aulani is. I think when you look at Alani, similar opportunities and convenience on distribution gains there. And yes, you are right when you know we went into, through that process, Celsius did take a lot of space from Bang at that point in time. But I will

say when you look at Aulani and the Opportunity and you look at the category, this category has extremely strong growth. And although, you know, Alani will not likely be replacing brands, the category is expanding. We’re hearing retailers expand their shelf presence for energy. So that’s what really allowed Aulani to gain some of that, you know, the large distribution gains as well. Also, the consumer dynamics have changed as the use, as I mentioned, the usage occasions have expanded. More females are coming into the category and increasing consumption. So there’s a lot of different dynamics at play. Although there’s some similarities, there’s a variety of differences just due to the, you know, the evolution of the category and the growth we’ve seen in energy overall as well as the innovation that’s come in. And it’s an exciting time for the portfolio coming out of NAX where we presented in October. You know, we felt the energy from a lot of retailers and the excitement about Celsius and, and now with the partnership with Pepsi, being the energy captain with the Celsius holdings portfolio and having that distribution confidence and breath, a lot of retailers really want to make sure you can keep those shelves full, especially with the velocity and how quickly, you know, these products turn. So that is a really a show of confidence and really allowed our key accounts team to take advantage of those opportunities and gain that additional distribution for the total portfolio.

Needham Analyst

Perfect. Thanks very much.

Operator

There are no further questions at this time. I will now turn the call over to John Fieldley, Chairman and Chief Executive Officer for closing remarks.

John Fieldly (Chairman and CEO)

Thank you again for joining us today. 2025 was truly a defining year for Celsius Holdings. We recorded that record 2.5 billion and continue to scale a true modern energy portfolio with Celsius, Aulani New and Rockstar Energy. As we move through 2026, our priorities are clear. Execute with discipline, strengthen our operating system and stay closely aligned with consumers as the category continues to evolve. I want to thank this opportunity to thank our employees, our partners and all of our customers out there for their focus, their teamwork that makes this all possible. We appreciate your support and we look forward to updating you next quarter. Until then, grab a Celsius and live fit.

Operator

This concludes today’s call. Thank you for attending. You may now disconnect.

This transcript is to be used for informational purposes only. Though Benzinga believes the content to be substantially and directionally correct, Benzinga cannot and does not guarantee 100% accuracy of the content herein. Audio quality, accents and technical issues could impact the exactness and we advise you to refer to source audio files before making any decisions based upon the above.

Image: Shutterstock.com