Celsius is showing no signs of stopping its upward trajectory as it reported nearly triple-digit gains in its Q4 2023 earnings this morning.
The Boca Raton, Florida-based energy drink company posted revenue of $347.4 million, a 95% increase compared to Q4 2022. For the first time, Celsius topped the billion dollar mark with FY2023 revenue of $1.32 billion, up 102% versus the previous year.
The “stellar” performance to close out the year, CEO John Fieldly said, was backed by its strategic distribution partnership with PepsiCo, a focus on refrigerated placements and a “methodical approach” to international expansion.
“The energy drink category is now a three-team race,” Fieldly said in prepared remarks referring to Red Bull and Monster as the top two category leaders.
Celsius held about 9.3% of dollar share revenue with unit sales up 119%, according to Circana data for the last 52-week period ending December 31.
Company leadership was bullish on the opportunity in its Celsius Essentials line which launched late last year. The new amino acid laden, performance energy drink reported a record 49% ACV (All Commodities Volume) year-to-date on February 18.
Gross margin was about 48% in both the Q4 and full-year results and its non-GAAP adjusted EBITDA was up 316% to about $296 million for FY2023, compared to $71 million in the prior year.
Net income attributable to common stockholders was $39 million for Q4, compared to a -$28 million loss in the same quarter the previous year.
The energy brand touted its growing footprint in foodservice where 12.5% of its Pepsi distribution sales come from the channel. The company also has also been prioritizing its branded cooler program where it currently has over 10,000 refrigerated cases across the U.S. representing over 300% gain year-over-year.
With an eye towards increasing its placements and velocities in the convenience channel, cold placement has been a “big initiative” in order to drive impulse purchases, Fieldly said in the question-and-answer section. “We do see uplift if you’re by the register and you’re cold. If it’s cold it’s sold.”
In ecommerce, Celsius announced it was the highest selling energy drink with 19.7% share of the category, edging out Monster Energy which clocked in at 19.6%.
It has also made gains in its Club channel sales. Club sales were $77.1 million in Q4, up 64% year-over-year.
One of the pillars of its continued growth revolves around its international distribution where last year it moved into two key markets. Utilizing its partnership with PepsiCo, the brand began distributing in Canada in mid-January and is “pleased” with sales in the country in the limited timeframe.
Also last month, the energy brand announced Suntory Beverage & Food would be Celsius’ sales and distribution partner in the United Kingdom and Ireland.
In looking for the best partners to align with internationally, Fieldly noted that Suntory’s access to the gym community was “very attractive” but Celsius needs to “build a loyal foundation” before it scales too quickly.
CFO Jarrod Langhans did caution that there will be some “costs and investments” in building awareness and production in both of these international markets.
Celsius already had a co-packer in Canada that it used as a backup for its U.S. business but in the UK, the company is “launching from zero,” Langhans said. “We won’t have the same scale and leverage advantages within manufacturing as we do in the US. But it’s not going to be a significant component of either our growth or our cost infrastructure this year.”
Despite launching the Essentials line and new flavors throughout the portfolio in 2023, Celsius continues to “monitor its SKUs” looking for areas where it can “cut its tail” on slower moving varieties, Fieldly said.
Celsius stock was up about 17%, trading at $79.40 per share at the time of publication.