Celsius Holdings, Inc. (CELH)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

When used in this Quarterly Report, unless otherwise indicated, the terms the “Company,” “Celsius,” “we,” “us” and “our” refer to Celsius Holdings, Inc. and its consolidated subsidiaries. Definitions of key terms can be found in the Master Glossary. Unless otherwise noted, tabular dollars are presented in thousands, except per share amounts.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report contains forward-looking statements that are based on the current expectations of our Company about future events within the meaning of the Private Securities Litigation Reform Act of 1995. While we have specifically identified certain information as being forward-looking in the context of its presentation, we caution you that all statements contained in this Quarterly Report that are not clearly historical in nature are forward-looking.

These forward-looking statements can be identified by words such as “expects,” “intends,” “will,” “anticipates,” “believes,” “confident,” “continue,” “propose,” “seeks,” “could,” “may,” “should,” “estimates,” “forecasts,” “might,” “goals,” “objectives,” “targets,” “planned,” “projects,” and their negative or other variations or comparable terminology. Through the use of such words and similar expressions, we intend to clearly express that the information deals with possible future events and is forward-looking in nature. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Particular uncertainties that could cause our actual results to be materially different from those expressed in our forward-looking statements include, without limitation:

•Our ability to successfully integrate businesses that we may acquire, achieve the expected benefits of such acquisitions and to manage multiple brands across our product portfolio;

•Our ability to maintain a strong relationship with Pepsi or any of our other distributors, including our ability to successfully execute our responsibilities under the Captaincy and the A&R Distribution Agreements;

•The increased ownership stake and additional Board representation by Pepsi may allow it to exert greater influence over our strategic and governance decisions;

•The impact of the consolidation of retailers, wholesalers and distributors in the industry;

•Our reliance on key distributor partnerships;

•The potential impact of terminating distributor relationships, including exposure to contractual, statutory or regulatory claims, increased costs, litigation risk and intensified competitive pressures;

•Our ability to maintain strong relationships with our customers and with co-packers to manufacture our products;

•Our failure to accurately estimate demand for our products;

•The impact of changes in inventory management practices by our customers or distributors, including inventory reductions or other inventory optimization initiatives;

•The impact of increases in cost or shortages of raw materials or increases in costs of co-packing;

•Our ability to successfully estimate demand and/or generate demand through the use of third parties, including celebrities and social media influencers, and the risk of negative publicity, litigation or regulatory enforcement action arising from such relationships;

•Our ability to successfully develop, commercialize and time the introduction of new products and innovations, and the impact of any failure to do so on our competitive position, net sales and results of operations;

•The impact of additional labeling or warning requirements or limitations on the marketing or sale of our products;

•Our ability to successfully expand outside of the U.S., execute management’s plans and objectives for future international operations and the impact of U.S. and international laws, including export and import controls and other risk exposure;

•Our ability to successfully complete or manage strategic transactions, successfully integrate and manage our acquired businesses, brands or bottling operations or successfully realize a significant portion of the anticipated benefits of our strategic transactions;

•The potential negative impact that we could realize as a result of businesses that we may acquire;

•Liabilities of businesses that we may acquire that are not known to us;

•Our ability to protect our brand, trademarks, proprietary rights and our other intellectual property, and the impact of third parties attempting to create products that attempt to replicate our product attributes;

•The impact of internal and external cyber-security threats and breaches, including risks arising from emerging artificial intelligence-enabled threats;

•Our ability to comply with data privacy and personal data protection laws;

•Our ability to effectively manage future growth;

•The impact of global or regional catastrophic events on our operations and ability to grow;

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•The impact of any actions by the U.S. Food and Drug Administration regarding the manufacture, composition/ingredients, packaging, marketing/labeling, storage, transportation and/or distribution of our products, or any required or elective recall of our products from distribution;

•The outcomes of regulatory investigations, proceedings or actions by U.S. or foreign governmental authorities, including the Federal Trade Commission, state attorneys general and international regulatory bodies, and the impact of any adverse outcomes on our business, brand, results of operations and cash flows;

•The impact of any actions by any regulatory bodies on our advertising;

•The impact of current and potential litigation matters, whether or not successful, on our brand, reputation, results of operations, and cash flows;

•The impact of changes in U.S. and international tax laws and regulations on our results of operations, cash flows, and financial condition;

•Our ability to effectively compete in the functional beverage product industry and the strength of such industry;

•The impact of changes in economic conditions in the domestic and international markets in which we operate;

•The impact of changes in consumer product and shopping preferences;

•The impact of changes in government regulation and our ability to comply with existing and emerging regulation concerning energy drinks, including climate-disclosure and environmental-reporting requirements;

•The potential effects of tariffs, macroeconomic instability or inflationary pressures on our supply chain, operating costs and consumer demand;

•Our ability to execute any share repurchase program, including the timing, amount and funding of any repurchases and the potential impact of such repurchases on our liquidity and the trading price of our Common Stock;

•Our ability to meet market expectations for our financial performance, including any financial outlook or guidance we may provide, and the impact of any failure to do so on our stock price, reputation, results of operations, and cash flows;

•Other statements regarding our future operations, financial condition, prospects and business strategies; and

•Those factors contained in this Quarterly Report under the heading, "Risk Factors".

Forward-looking statements and information involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied in or reasonably inferred from, such statements, including without limitation, the risks and uncertainties disclosed or referenced in Part I, Item 1A Risk Factors and Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report. Therefore, caution should be taken not to place undue reliance on any such forward-looking statements. Much of the information in this Quarterly Report that looks toward future performance is based on various factors and important assumptions about future events that may or may not actually occur. As a result, our operations and financial results in the future could differ materially and substantially from those we have discussed in the forward-looking statements included in this Quarterly Report. We assume no obligation (and specifically disclaim any such obligation) to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

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Our Business

Executive-Level Overview

Celsius is a functional energy drink company operating in the U.S. and internationally. Our portfolio consists of three brands: CELSIUS®, our core functional energy brand; Alani Nu®, a wellness-focused energy and nutrition brand acquired in April 2025; and Rockstar®, an established energy brand with a strong heritage, acquired in August 2025. Together, these brands form a differentiated, multi-brand platform designed to serve distinct consumers, occasions and energy needs, supporting functional performance, better-for-you formulations and active lifestyles.

CELSIUS® is a functional energy brand offering products across a range of formats, including ready-to-drink, on-the-go powder and hydration, designed to support active and wellness-oriented lifestyles for consumers who are 18 years and older. Our products are widely available throughout the U.S. and in select Canadian territories across a broad range of retail outlets, including grocery stores, natural product stores, convenience stores, fitness centers, mass retailers, vitamin specialty stores and through e-commerce platforms. Moreover, our products are offered in select markets in Europe, the Middle East and the Asia-Pacific region as we have continued to expand our global presence.

Alani Nu expands our portfolio further into wellness and nutrition, broadening our reach across consumers, occasions and product formats, with a product range spanning energy drinks, pre-workout formulas, protein beverages and supplements. With a strong following among Gen Z and female consumers, who are 18 years and older, Alani Nu enhances our ability to connect with key consumer segments, strengthens our innovation pipeline and supports continued expansion.

Rockstar Energy strengthens our total energy portfolio by adding both full-sugar and zero-sugar offerings that complement our existing brands. With established brand equity, Rockstar enhances our ability to serve core energy consumers who are 18 years and older.

Together, our brands enable a portfolio-led approach to serving diverse consumer preferences across performance, lifestyle and traditional energy occasions.

We engage in developing, manufacturing, processing, marketing, selling and distributing Celsius, Alani Nu and Rockstar products. Our operational model strategically relies primarily on co-packers for the manufacture and supply of our products, leveraging their specialized expertise and scalable production capabilities. Additionally, we utilize our in-house manufacturing facility to complement our strategic use of co-packers. This approach allows us to maintain flexibility in responding to market demands and to focus our resources on innovation, marketing and expanding our distribution channels. We continuously assess and work to optimize our supply chain to ensure quality, consistency and timely delivery to our customers.

Building on the long-term distribution arrangement that we originally established with Pepsi in August 2022, we entered into a series of transactions on the Closing Date of the Pepsi Transactions that expanded our strategic partnership. These included (i) the Rockstar Acquisition, (ii) the issuance of Series B Preferred Stock and amendment of the existing Series A Preferred Stock and (iii) the execution of the A&R Distribution Agreements, which designate Pepsi as the primary distributor of our Alani Nu and Rockstar products in the U.S. and Canada. Under the enhanced commercial arrangement

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our Consolidated Financial Statements and the accompanying notes included elsewhere in this Report. This Report contains forward-looking statements within the meaning of the PSLRA, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act, about our expectations, beliefs, plans and intentions regarding our product development efforts, business, financial condition, results of operations, strategies and prospects. Readers can identify forward-looking statements by the fact that these statements do not relate to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied through forward-looking statements. Please refer to Item 1A. Risk Factors for a detailed discussion of these uncertainties and risks. Forward-looking statements reflect our views as of the date they are made. Except as required by law, we are not obligated to revise or publicly release any updates to these forward-looking statements. This includes not updating the statements to reflect events or circumstances occurring after they were made, or to address any differences between anticipated and actual results. We intend for all forward-looking statements to be subject to the safe harbor provisions of PSLRA.

The Management's Discussion and Analysis section aims to help the reader understand the Company's financial status and operational performance, guiding readers through our current business landscape and operational environment. Our analysis includes our results of operations and financial condition for the years ended December 31, 2025 and 2024 and year-over-year comparisons between 2025 and 2024. For a detailed discussion of our results of operations and financial condition for the year ended December 31, 2024 and year-over-year comparisons between 2024 and 2023, please refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024.

Definitions of key terms can be found in the Master Glossary. Unless otherwise noted, tabular dollars are presented in thousands, except per share amounts.

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Our Business

Executive-Level Overview

Celsius is a functional energy drink company operating in the U.S. and internationally. We currently market three brands within our portfolio: CELSIUS®, our flagship functional energy brand; Alani Nu, a wellness-focused energy and nutritional product brand that we acquired in April 2025; and Rockstar, an energy drink with a rich brand heritage that we acquired in August 2025. Together, these brands position us to serve a broad and growing base of consumers seeking functional performance, better-for-you formulations and active lifestyle support.

Celsius is available in two convenient forms: ready-to-drink and an on-the-go powder. Additionally, we offer our CELSIUS ESSENTIALS™ line, featuring 16-ounce cans enriched with aminos. In 2025, we introduced CELSIUS® Hydration, a line of non-caffeinated, zero-sugar hydration powders, featuring electrolytes in a variety of fruit-forward flavors. Our product range is widely available across the U.S. and in select territories in Canada in various retail outlets, including grocery stores, natural product stores, convenience stores, fitness centers, mass retailers, vitamin specialty stores and through e-commerce platforms. Moreover, our products are offered in select markets in Europe, the Middle East and the Asia-Pacific region as we have continued to expand our global presence.

Alani Nu expands our reach beyond energy into wellness and nutrition with a product range spanning energy drinks, pre-workout formulas, protein beverages and supplements. With a strong following among Gen Z and female consumers, Alani Nu adds depth to our innovation pipeline and provides meaningful opportunities for domestic and global expansion.

Through our addition of Rockstar, we offer beverages in both full-sugar and zero-sugar formats. Rockstar complements our portfolio with its established brand equity and appeal to traditional energy drink consumers. Collectively, our brands position Celsius to meet the diverse preferences of consumers seeking functional performance, wellness benefits and better-for-you energy options.

We engage in developing, manufacturing, processing, marketing, selling and distributing Celsius, Alani Nu and Rockstar products. Our operational model strategically relies primarily on co-packers for the manufacture and supply of our products, leveraging their specialized expertise and scalable production capabilities. Additionally, we utilize our in-house manufacturing facility to complement our strategic use of co-packers. This approach allows us to maintain flexibility in responding to market demands and to focus our resources on innovation, marketing and expanding our distribution channels. We continuously assess and work to optimize our supply chain to ensure quality, consistency and timely delivery to our customers.

Building on the long-term distribution agreement we originally established with Pepsi in August 2022, on the Closing Date of the Pepsi Transactions, we entered into a series of transactions that expanded our strategic partnership. These included (i) the Rockstar Acquisition, (ii) the issuance of Series B Preferred Stock and amendment of the existing Series A Preferred Stock and (iii) the execution of the A&R Distribution Agreements, which designate Pepsi as the primary distributor of our Alani Nu and Rockstar products in the U.S. and Canada. Under the enhanced commercial arrangement, Pepsi has agreed to use its commercially reasonable efforts to sell and distribute our full portfolio of products in the U.S. in accordance with the Captaincy.

Company and Industry-Wide Factors

Energy Drink Market Trends - The energy drink industry continues to expand, driven by sustained consumer demand for functional beverages that offer benefits beyond those offered by the larger carbonated soft drink market such as various health benefits, energy boosts, or other fitness-related advantages. While industry growth has moderated over the past year, the category remains supported by longer-term trends such as increasing consumer focus on healthier lifestyles, greater interest in lower-calorie and reduced-sugar options, and a preference for products formulated with more natural ingredients. These trends have contributed to the continued evolution and resilience of the energy drink category.

Consumer Behavior Changes - We continue to observe a rising trend of consumers seeking products that align with personal wellness and fitness goals. While Celsius has historically resonated with fitness-oriented consumers, we are increasingly seeing adoption across a broader range of consumption occasions, reflecting consumer interest in functional beverages beyond exercise-adjacent use. Our product portfolio is positioned to address this evolving demand, appealing to health-conscious consumers across a range of lifestyles and daily routines. In addition, female consumers represent a growing demographic for the brand, reflecting increased engagement from a segment that has historically represented a smaller portion of the consumer base.

Technological Advancements and Digital Trends - The integration of technology, including AI, in marketing and sales strategies is becoming increasingly important to our business. Leveraging digital marketing channels, e-commerce platforms, AI enabled tools and data analytics are essential for reaching and understanding modern consumers. Adapting to these technological trends is vital for staying competitive and meeting evolving consumer expectations.

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Pepsi Partnership - Our partnership with Pepsi continues to be a significant component of our commercial strategy and operating model. During 2025, we expanded this relationship beyond distribution to include additional strategic and commercial arrangements which further integrated Pepsi into our sales and marketing execution across key markets in the U.S.

Through this partnership, we benefit from Pepsi’s scale, operational capabilities and established distribution infrastructure which supports product availability, retail execution and market penetration across multiple channels in the U.S. and Canada. The expanded scope of our relationship with Pepsi, including enhanced coordination around sales, placement and promotional priorities, is intended to support execution consistency and improve speed to market as we scale our brand portfolio.

The expanded Pepsi partnership also played a role in supporting the integration and distribution of acquired brands, including Alani Nu and Rockstar and is expected to continue influencing our go to market strategy, cost structure and operational leverage over time. We expect the partnership to remain an important factor in our ability to execute against growth initiatives and adapt to evolving consumer and retail dynamics. For more information refer to Item 1. Business, and Note 14. Mezzanine Equity to our Consolidated Financial Statements contained elsewhere in this Report.

Key Drivers of our Financial Success and Market Presence - Much of our financial success is dependent on our ability to market and connect with a diverse consumer base, including wellness-focused consumers, fitness enthusiasts and consumers looking for more functionality in their beverage consumption. We believe that our strategic marketing initiatives, aimed at different demographics and lifestyle segments, contribute to revenue growth and market share expansion. We continually adapt our marketing mix to align with changing consumer preferences, leveraging digital and social media channels for broader reach and engagement. Furthermore, we have designed our focus on product innovation to meet the evolving demands of health-conscious consumers, while maintaining appeal to a general consumer base seeking quality and convenience, thereby enhancing our competitive position and financial performance. Our approach is to create a brand experience that is both inclusive and appealing to a wide range of consumers, fostering loyalty and driving sustainable growth. We believe that our multifaceted approach is crucial for driving enduring revenue growth and maintaining a strong market presence in the energy drink industry.

Our Business Risks

Our management has identified certain material opportunities, challenges and risks applicable to our business.

Brand Reputation and Consumer Trust Risks - Our success relies on maintaining a strong brand reputation and consumer trust. In the fast-paced consumer packaged goods industry, public perception can shift rapidly due to various factors, including product quality issues, negative publicity, social media trends and changing consumer preferences. A tarnished brand image, whether through real or perceived issues, can result in decreased customer loyalty, reduced sales and ultimately, a negative impact on our financial performance.

To mitigate these risks, we have committed to maintaining high standards in product quality, engaging in responsible marketing practices and actively managing public relations. We continuously monitor consumer feedback and respond swiftly to any concerns. Our management team is equipped to handle potential public relations challenges proactively to safeguard our brand image. However, despite these efforts,

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