An Introduction to Celsius Holdings (CELH)

Side note before I start this introductory review. THIS IS NOT A SAAS COMPANY. If you have a strict criteria of software or bust, I want to make sure that I don’t waste your time before you start reading. I was turned onto this company by Jonah Upton, from whom I also found MWK (Mohawk Group). A lot of his picks are higher speculation than my tastes but he has some gems in his portfolio. Maintains an active twitter presence much like Digized (Richard Chu) if any of you are interested in getting some ideas.

Celsius Holdings is a maker and distributor of some lines of carbonated/sparkling energy drinks. Their branding focus is on “health” and “fitness”. Their drinks are crammed with vitamins/supplements and claiming to accelerate metabolism and burn body fat. I’ve always been skeptical of the supplement industry and honestly this strikes me as no different than snake oil. However, I have also always severely underestimated the market for energy drinks/health supplements and how much consumers in general have taken to these products. For example, Monster sold $4.2 billion worth of product in 2019, which is 4x 2009’s numbers and 58x 1999’s figures. So even though it’s not a product industry I personally patronize, I maintain a healthy respect for how popular it is.

To the numbers, revenue for past 7 quarters (in millions):
14.5 → 16.1 → 20.4 → 24.1 → 28.2 → 30.0 → 36.8
QoQ growth for the three quarters in 2020:
Q1 - 17%, Q2 - 7%, Q3 - 23%
YoY growth for the three quarters in 2020:
Q1 - 95%, Q2 - 86%, Q3 - 80%

Margins are in the mid 40s and they expressed on the latest earnings call that they expect that to continue. They have been GAAP profitable and free cash flow positive since early 2019. Valuation at 4.5B market cap is around 37 P/S which seems fair given growth rates and gross margins. With the global energy drink market at 60B in 2020 and continuing to grow, it seems there’s a lot of room to grow still.

Q3 call highlights:

  • Domestic sales grew 60% YoY (16.8m → 26.9m)
  • Europe sales grew 182% YoY off a small base (3.4m → 9.5m)
  • Added 19,000 additional retail outlet to distribution (32% YoY growth vs 60,000 in Q3 2019), due to partnerships with Walmart, Target, CVS and 7-Eleven, their network covers 75% of major US metropolitan markets, so still room to grow
  • Same store growth of 30%, remainder of YoY growth has come from new distribution
  • Mentioned that their health segment is expected to rebound in 2021 once gyms start opening back up and selling their product in vending and at the front desk. The segment was down 23% in Q3 2020.
  • 22% of revenue comes from direct to consumer channels, such as Amazon orders

Overall, I see a lot of growth and opportunity ahead for the company. I’ve taken a 6% position, and I intend to keep it around that size unless unexpected reacceleration occurs. CELH will report 2020 annual earnings around March 11th.


I can just agree with above. It is also really popular world wide. I live in Sweden and see this drink EVERYWHERE.