Revenue 326m, up 112% YoY, and 25% QoQ (this matters a little less since there’s seasonality in how retailers stock up on inventory)
GM up to 48.8% from 38.5% prior year
Net income 40.9m vs 9.2m, EPS 0.52 vs 0.12
Nielsen US retail data seems to indicate Celsius is actually accelerating its growth in Q3, below numbers from Jonah Lupton on twitter, can’t verify as I don’t have access to the data, but seems to jive with CELH results being reported so far this year (reminder retail is just one sales channel for the company)
Last 4 weeks ending 7/29 = 164.5% YoY
Last 4 weeks ending 7/15 = 161.8% YoY
Last 4 weeks ending 7/1 = 153.2% YoY
Last 4 weeks ending 6/17 = 149.4% YoY
Last 12 weeks ending 7/29 = 155.6% YoY
Last 12 weeks ending 7/15 = 152.1% YoY
Last 12 weeks ending 7/1 = 147.6% YoY
Last 12 weeks ending 6/17 = 143.0% YoY
Haven’t listened to the call yet, but apparently they announced some more international expansion. International is currently less than 5% of revenue, so more of a future state growth story, if they can execute
Up 14% after hours
Very impressive overall, still number 1 in my portfolio (although I haven’t added since 2020 - it just hasn’t gone down like most of the other holdings from that period)
Nothing bad in the earnings call as far as I could tell. Yes, CELH is still growing like a weed as its distribution deal with Pepsi gets implemented. A portion of the sales could be attributed to filling the channel, and this got asked about again on the earnings call. Last quarter, it was asked about as well. The answer was the same: velocity is still increasing. Velocity is basically how quickly the retail locations sell out/replace their inventory. So inventory doesn’t seem to be piling up but rather is being bought by end users as inferred by reorders of product by the retail locations. CELH is continuing to implement their distribution partnership with Pepsi which will continue to provide growth in Q3 at least. In 2024, CELH plans to expand internationally where the energy drink category is already established. In 2025, they will continue the international expansion. Yes, the Nielsen numbers point to a very strong Q3 and we can continue to monitor these numbers every 2 weeks to continue to see how CELH is growing.
Gross margins were 48.8% up from 38.5% a year ago. In Q1, margins were 43.8%. By comparison, MNST has gross margins of 52% so perhaps CELh can get that once the Company has matured in the market.
Opex runs at about 30% of revenue which we can expect going forward so the net margin could be in the 18-22% range. Also, CELH has hardly any stock based comp which is unusual if one is accustomed to investing in technology companies.
After the stock price bump from Q2 earnings, CELH will be a $12.5B company with run rate sales of $1.3B. So it has a 9.6x multiple of run rate sales. By comparison MNST has a market cap of about $60B and sales of $7.4B (run rate) so a P/S of 8.1. MNST is only growing sales at 12.1% though. If CELH continues to grow sales at a rapid pace then its share price will probably keep rising.
CELH is currently my largest holding at about 13.5% allocation. After this report, I won’t be trimming but will instead look forward to another great quarter in 3 months.
Hey @GauchoRico and @Aphalite thanks and agreed. Maybe for some of the fence-sitters, the following. It’s an easy company to follow. They sell drinks which consumers (repeat) purchase. They don’t have meaningful sbc. And they are bottom, bottom-line profitable. It’s all about execution.
All margins improved this q. And this is what the yoy growth of the top-line revenue, gross margin line and net profit line (yes, gaap net profit - look it up if you’ve forgotten how it’s defined looked like:
Revenue up 112%
Gross profit up 168%
EBITDA up 357%
Net profit up 345%
They don’t show any signs of slowing down, and the nature of how customers are consuming the product is changing for the better, as per the CEO (and speaking as a regular coffee drinker):
“We are expanding the energy category with expanding consumer base and usage occasions. The Celsius consumer making it a daily part of their active lifestyle with consumption patterns that are similar to coffee than traditional impulse purchases with legacy energy drink brands.”
Have a look here for the company’s overview of results.
What do you guys make of the appr 25% short interest? I have a 7% position in CELH and am very happy with this ER, and the company in general. I just can’t fathom how a company with such interesting prospects, growing so fast, making money, with the Pepsi partnership that’s showing its fruits, AND trading at 8x annualized last Q revenues can have such a high short interest.
I’d appreciate your thoughts on this, if any.
Thank you.
Silvio
Agreed with Gaucho - there are some stakeholders with very large holdings and the stated short interest could be hedging products that they have purchased
This doesn’t add up to me, somehow. Short Interest is the amount of shares sold short, I’m not sure it’s also other types of hedging products. Also, can you hedge a large ownership in a stock by shorting the same stock? I mean, would you do that if you were a large shareholder? Isn’t this a contradictory signal? I’m genuinely trying to understand, as I’m not into these things. There are currently 10.5m shares that have been sold short, or 24.96% of shares outstanding.
To start, because of the large stakeholders, the float is only ~55% of total shares, the short interest is calculated on the float, but against total shares outstanding is around 14%. As far as your question on hedging, imagine that you’re a owner who wants to protect the printed investment performance for the year. You have a 45% gain but do not want to trigger short term taxes. To do this you buy puts which will expire worthless if CELH goes up but will protect your 45% gain if it goes down, while you wait for long term tax treatment. That’s just one reason why you would hedge - we’re not really playing the same game as those guys tho
@GauchoRico, where can we get these Nielsen numbers you referenced?
On page 3 of the earnings report, the company referenced IRI MULO+C data. I tried searching but it doesn’t seem easily available. Probably a subscription service.
Celsius Holdings shares outstanding history from 2010 to 2023. Shares outstanding can be defined as the number of shares held by shareholders (including insiders) assuming conversion of all convertible debt, securities, warrants and options. This metric excludes the company’s treasury shares.
CELH is trading at around $170. Suppose you short the stock while holding convertible debt, warrants or options convertible at $100. If the stock goes down you make money. If it goes up you are secured by the convertible debt, warrants and options you own.
Does Celsius Holdings have convertible debt, warrants and options and at what price?
I’m not sure. I’ve been seeing them posted my Jonah Lupton on Twitter ( @JonahLupton ). He holds a big position and has been posting the Nielsen numbers so I haven’t bothered trying to find them myself.
Could be. I consider shorting a losing strategy, limited upside and unlimited downside. The scenario I illustrated caps the downside risk.
My point was not to debate language but to show that shorting is a complex strategy. When I invest I don’t try to get into the mind of the party on the other side of the trade. My only interest is my side of the trade. When you buy stocks, do you ponder why the seller is selling? When you sell, do you ponder why the buyer is buying? The ‘other side’ is the whole market.
looked like: