Celsius (CELH) Q3 2025: Energy Portfolio Share Doubles to 20%, Alani Integration Sets 2026 Growth Platform

November 6, 2025 | By EarningsIQ Research

Celsius Holdings’ Q3 marked a step-change in scale and control, as the company’s expanded energy drink portfolio now commands over 20% U.S. market share and sets up a new phase of distribution leverage through PepsiCo. The integration of Alani New and Rockstar, alongside ongoing international expansion, is reshaping the business model and near-term margin profile. Investors should expect a noisy Q4 as distribution transitions, but the groundwork for 2026 category leadership is now being laid.

Summary

• Distribution Leverage Expands: Celsius’ enhanced partnership with PepsiCo consolidates energy category captaincy and unlocks broader retail execution.
• Portfolio Diversification Accelerates: Alani New and Rockstar integration is driving reach into new consumer segments and fueling double-digit growth.
• Margin Pressure Near-Term, Scale Benefits Ahead: Q4 faces integration and tariff headwinds, but 2026 should see synergies and operational upside materialize.

Performance Analysis

Celsius Holdings posted a transformative quarter, with consolidated revenue surging on the back of organic growth, the Alani New acquisition, and the addition of Rockstar Energy. The company’s combined U.S. energy drink portfolio now exceeds 20% market share in tracked channels, up from just 10% two years ago, reflecting both robust brand momentum and inorganic expansion. The Celsius brand posted double-digit scanner growth, while Alani New delivered triple-digit gains, driven by successful limited-time offerings (LTOs) like Witch’s Brew.

Gross margin expanded to over 51%, supported by scale, favorable mix, and disciplined cost control, despite incremental pressure from tariffs and lower-margin new brands. Operating expenses ticked higher as Celsius invested in marketing and integration activities. The company incurred a significant, but cash-neutral, distributor termination expense related to Alani New’s transition into the PepsiCo network, with reimbursement amortized over the distribution agreement.

• Portfolio Share Gains: Celsius’ U.S. energy drink share doubled to 20% through organic and acquisition-driven growth.
• Brand Mix Drives Top-Line: Alani New’s 99% revenue growth and Rockstar’s initial contribution diversified the revenue base.
• Margin Profile in Flux: Integration costs, tariffs, and promotional activity weighed on Q4 margin outlook, but scale and sourcing synergies are expected to emerge in 2026.

Near-term results reflect both the benefits and complexity of rapid portfolio expansion and distribution transition, with investors advised to look through Q4 noise to the long-term platform being built.

Executive Commentary

Strategic Positioning

1. Energy Category Captaincy

Celsius’ designation as PepsiCo’s U.S. Strategic Energy Drink Captain gives the company unprecedented influence over energy category execution in retail. This role enables Celsius to shape planograms (in-store shelf layouts), prioritize SKUs (stock keeping units, or product variations), and coordinate promotional periods across its brands. The arrangement provides Celsius with greater control over distribution, shelf presence, and execution—key levers for driving share gains and retailer alignment.

2. Portfolio Diversification and Brand Segmentation

The acquisition of Alani New and Rockstar Energy extends Celsius’ reach into new consumer segments, from fitness-focused to lifestyle and music-oriented energy drinkers. Alani New, positioned as a female-focused lifestyle energy brand, has shown strong velocity through LTOs and core SKU growth. Rockstar’s integration, still in its early stages, is expected to stabilize and expand over time, with operational improvements targeted for 2026. This multi-brand approach is redefining Celsius as a total energy platform, not just a single-brand story.

3. Distribution Transition and Integration Playbook

Alani New’s transition into the PepsiCo DSD (direct store delivery) network is a near-term catalyst, expected to unlock distribution scale and new retail doors. Management emphasized learnings from the prior Celsius integration, with a phased rollout planned to minimize inventory disruption. The expanded PepsiCo partnership also brings enhanced category management, dedicated field resources, and improved access to foodservice channels.

4. Margin Management and Operational Synergies

While Q4 will see margin headwinds from integration costs, tariffs, and promotional activity, Celsius is positioned to realize sourcing, production, and freight efficiencies as Alani New and Rockstar are fully integrated. The company is leveraging its co-packing assets and scale for raw material savings and expects to improve Rockstar margins beginning in 2026. General and administrative expenses have already declined as a percentage of sales, reflecting early efficiency wins.

5. International Expansion Foundation

International markets are emerging as a long-term growth lever, with Australia highlighted as an early success and foundational efforts underway in the UK, Nordics, and other regions. The company is investing in local sales and marketing teams, leveraging health and wellness trends, and deploying ambassador programs to build brand equity abroad. Alani New and Celsius are expected to benefit from these efforts over the coming years.

Key Considerations

This quarter’s results highlight the complexity and opportunity of scaling a multi-brand, multi-channel energy platform. Investors should weigh both the near-term margin volatility and the long-term competitive positioning Celsius is building.

Key Considerations:

• Distribution Transition Complexity: The phased rollout of Alani New in PepsiCo’s DSD system will create inventory and margin noise in Q4, with benefits back-end loaded into 2026.
• Brand Innovation Velocity: LTOs such as Witch’s Brew and Spritz 5 are driving excitement and velocity, but introduce quarterly lumpiness in sales and inventory.
• Margin Headwinds vs. Synergy Opportunity: Tariffs, integration costs, and lower Rockstar margins pressure Q4, but sourcing and scale benefits are expected to emerge next year.
• International Execution: Early wins in Australia and ongoing foundation-building in Europe set the stage for non-U.S. growth, though timing and scale remain uncertain.

Risks

Short-term margin pressure is likely as integration and distribution transitions create inventory and cost volatility, and tariffs remain an overhang. The success of Rockstar’s turnaround and the pace of Alani New’s distribution ramp are not guaranteed. International expansion, while promising, is still in its early stages and subject to execution risk and local market dynamics. Management’s ability to manage inventory, optimize promotions, and capture synergy will be critical to delivering on the 2026 growth narrative.

Forward Outlook

For Q4 2025, Celsius expects:

• Continued revenue growth in Celsius and Alani New, but with “noisy” results due to integration, inventory transitions, and promotional timing.
• Gross margin pressure from tariffs, higher scrap, and freight costs related to Alani New’s PepsiCo transition.
• Sales and marketing expenses elevated to 23-25% of sales as brand campaigns and integration investments peak.

For full-year 2025, management maintained a focus on:

• Balancing investment in brand building and integration with profitability.
• Capturing operational synergies and improving margin profile in 2026, particularly as Rockstar integration matures and Alani New scales in PepsiCo’s network.

Management highlighted that Q4 will remain volatile, but the platform for 2026 growth and margin expansion is being established now.

Takeaways

Celsius is transitioning from a single-brand disruptor to a scaled, multi-brand energy platform with strategic distribution leverage.

• Energy Category Influence: The PepsiCo partnership and captaincy position Celsius to shape the energy drink landscape and drive retailer alignment.
• Integration Execution: Q4 will be messy as Alani New transitions, but management’s prior integration experience and enhanced operational playbook reduce risk of major disruption.
• 2026 Platform in Focus: Investors should monitor the realization of synergy, margin stabilization, and international traction as the next phase of growth unfolds.

Conclusion

Celsius Holdings’ Q3 2025 results underscore a new era of scale, control, and portfolio breadth. While short-term volatility is likely as integration and distribution transitions play out, the company is well positioned to lead category growth and margin expansion in 2026 and beyond.

Industry Read-Through

Celsius’ rapid ascent to over 20% U.S. energy drink share demonstrates the power of portfolio breadth, distribution leverage, and targeted innovation in the functional beverage space. The company’s ability to accelerate growth through both brand acquisition and organic innovation sets a blueprint for other beverage players seeking to diversify and scale. Retailers’ willingness to expand shelf space and embrace new brands underscores the ongoing disruption in the energy category and signals continued opportunity for differentiated, health-forward offerings. Competitors will need to respond with both portfolio and channel strategies as Celsius and PepsiCo deepen their partnership and influence.

CELH Consumer Staples Beverages Distribution Energy Drinks PepsiCo Integration Portfolio Expansion