Company: CELH
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001341766-25-000080
Chunk: 10

Company: Celsius Holdings, Inc.
Filing Date: 2025-05-06
Form: 10-Q
Item: Item 8
Chunk 10
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 are recognized in the period such differences are determined.Promotional allowances are recorded as reductions to revenue and primarily include consideration given to the Company’s distributors or retail customers including, but not limited to the following:•discounts from list prices to support price promotions to end-consumers by retailers;•reimbursements given to distributors for agreed portions of their promotional spend with retailers, including slotting, shelf space allowances and other fees for both new and existing products;•the Company’s agreed share of fees given to distributors and/or directly to retailers for certain advertising, in-store marketing and promotional activities;•the Company’s agreed share of slotting, shelf space allowances and other fees given directly to retailers, club stores and/or wholesalers;•incentives provided to distributors and/or retailers for achieving or exceeding certain predetermined volume goals or other incentive targets;•discounted products; and•contractual fees given to distributors for items sold below defined pricing targets.For the three months ended March 31, 2025 and March 31, 2024, promotional allowances included as a reduction of revenue were $110.2 million and $95.0 million, respectively.

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Celsius Holdings, Inc.Notes to the Condensed Consolidated Financial Statements (Unaudited)March 31, 2025(Tabular dollars in thousands, except per share amounts)

Accrued promotional allowances were $151.3 million and $135.9 million as of March 31, 2025 and December 31, 2024, respectively.Agreements with PepsiThe Company executed multiple agreements with Pepsi on August 1, 2022, including the Distribution Agreement relating to the sale and distribution of certain of the Company’s beverage products in existing channels and distribution methods in the U.S., excluding certain existing customer accounts and sales channels, and the U.S. Virgin Islands (collectively, the “Territory”). Under the Distribution Agreement, the Company granted Pepsi the right to sell and distribute its existing beverage products in existing channels and distribution methods and future beverage products that are added from time to time as licensed products under the Distribution Agreement in the Territory. The Distribution Agreement represents a master service agreement and can be canceled by either party without cause in the nineteenth year of the term (i.e., 2041), the twenty-ninth year of the term (i.e., 2051) and in each 10th year thereafter (i.e., 2061, 2071, etc.) by providing 12 months’ written notice