Celsius (CELH) Q1’26 Recap
From hypergrowth to margin expansion
Celsius published Q1 figures that comfortably exceeded my internal projections, with both top-line and bottom-line growth accelerating faster than anticipated.
Source: company reports
While gross margins expanded sequentially, the path back to the low 50s will depend on macroeconomic factors (specifically elevated aluminum and freight costs). We may see the first signs of that recovery toward the end of the year.
Key Financial Highlights:
Revenues: Reached $782.6m (+138% YoY). By brand: Alani Nu grew ~60%, core Celsius grew ~6%, and Rockstar declined by 13%.
Market Share: U.S. market share expanded to 20.9% (up from 20.0% in Q4’25).
Gross Margin: Dropped YoY to 48.3% (down from 52.3%), but improved by roughly 90 bps sequentially (up from 47.4% in Q4’25).
Adjusted EBITDA: Margin expanded significantly by 370 bps to 24.9%.
Net Income: Surged 148% YoY, growing from $44.4m in Q1’25 to $110.1m in Q1’26.
EPS: Reported EPS increased from $0.15 last year to $0.33. Adjusting for one-time settlement costs, normalized EPS jumped 173% to $0.41.
International: Revenues grew a solid 55% YoY. Management also noted upcoming expansion into Portugal.
Operational & Integration Updates
Management expects massive shelf reset gains this spring (taking effect this month and next): ~17% expansion for core Celsius and >100% expansion for Alani Nu. The Alani Nu integration into the PepsiCo network is essentially complete, successfully capturing about $50m in synergies. The Rockstar integration will be finalized by the end of 1H’26.
Margin Outlook
Management indicated that we should not expect major gross margin improvements in Q2, but to look for acceleration in the back half of the year.
“I think one more thing just for modeling purposes while we’re at it, probably as we look at 2026 in particular, Q2 is probably more of a side-step-type activity and then Q3 and Q4, where you’re going to see the stair step and then continue on to 2027 with further stair steps.” (Jarrod Langhans, CFO)
Portfolio Dynamics
Rockstar generated $67m in Q1 revenue but declined 13% YoY. Management views 2026 as a “stabilization year” for the brand. However, Rockstar is highly strategic: it helps Celsius negotiate better aggregate shelf space blocks (and I expect it will help internationally, as Rockstar already has a presence in major European supermarket chains).
Management emphasized that Q1 and Q2 are transition periods. By Q3, we should start seeing deeper operational leverage. Note: This quarter still included some leftover termination charges (~$5m) related to transitioning Alani Nu into the PepsiCo distribution network.
The Alani Nu Success Story
We can definitively conclude that the Alani Nu acquisition has been a massive success. The fact that Celsius already had a deeply established relationship with PepsiCo was highly beneficial, allowing them to rapidly scale Alani Nu’s distribution.
A little over a year ago, Celsius traded at roughly this same price. Back then, it was a single-brand portfolio with a 10% to 11% market share. While it grew quickly, the gap between it and the legacy giants (#1 Red Bull, #2 Monster) was still vast (>20%). The Alani Nu acquisition—and later the Rockstar deal—transformed Celsius into a highly stable contender. Coming out of this quarter, they command nearly 21% of the U.S. market and have effectively captured the majority of the female-led growth in the energy space. With a balanced, multi-brand portfolio, it will be much easier for them to protect and incrementally grow their market share.
International Expansion
Historically, international expansion has been a bit disappointing. It is comforting to see growth re-accelerate from +9% in Q4’25 to +55% in Q1’26, but there is still a long road ahead. Celsius cannot simply “copy and paste” their U.S. playbook into Europe. They need to localize the organization country by country. Every region has entrenched local competitors, and Red Bull and Monster have an iron grip on European retailers. Gaining physical shelf space will be a grind.
However, Celsius’s approach—expanding methodically and investing in grassroots, boots-on-the-ground marketing (see the London pop-up picture below)—is the right long-term strategy.
Celsius pop-up in London (Mar’26)
Is Celsius Attractively Valued?
The hyper-growth phase is behind us; this was likely the last quarter we will see triple-digit consolidated revenue growth. From Q2’26 onwards, top-line growth will decelerate into the high-teens or low-20s as YoY comparables get much tougher.
The real upside story now is the margin profile. There is immense operational leverage left in this business. Every bit of gross margin expansion will flow straight to the bottom line. Management was cautiously optimistic regarding this margin expansion, and I believe returning to the low-50% range by year-end is highly feasible. Beyond 2026, margins should continue to scale.
I am estimating a net profit of at least $500m for 2026. At the current market cap, that equates to a forward ’26 P/E multiple of just 17x to 18x. This makes the stock highly attractive at current levels.
Full details can be found in the model below
Model: [link]
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