Company: CELH
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0001341766-25-000104
Chunk: 138

Company: Celsius Holdings, Inc.
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 2
Chunk 138
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 as we have continued to expand our global presence.

Alani Nu complements and extends our category presence within and beyond energy into adjacent areas of wellness and nutrition. The brand’s portfolio includes energy drinks, pre-workout products, ready-to-drink protein beverages, and dietary supplements. Alani Nu has developed strong appeal among Gen Z and female consumers and provides additional opportunities for innovation and distribution expansion in the U.S. and global markets.

We engage in various aspects of developing, manufacturing, processing, marketing, selling, and distributing both CELSIUS and Alani Nu branded 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.

On August 1, 2022, we entered into a long-term distribution agreement with Pepsi, making them our primary distributor in the U.S. for Celsius branded products and leveraging the right of first offer to facilitate our expansion into Canada. This agreement also helps to enable our potential entry into additional international markets and new distribution channels with Pepsi. In connection with our relationship with Pepsi, we terminated certain previous distributor agreements and shifted certain distribution rights to Pepsi.

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Impact of Tariffs and Macroeconomic Trends

The imposition of tariffs including U.S. tariffs imposed or threatened to be imposed on other countries and any tariffs imposed by such countries have impacted and could continue to impact our supply chain, including the cost of certain raw materials and packaging. In addition, any supply chain constraints, inflationary impacts or reduced consumer demand for our products as a result of such tariffs or ongoing macroeconomic uncertainty could impact our results. While tariffs increased certain costs, the aggregate impact was not a key driver of our cost of revenue. As our second quarter benefited from timing of tariff implementation, we currently expect that tariffs may have greater impact in future quarters; however, the rapidly changing landscape around tariffs does not allow us to estimate that impact with reasonable certainty.

Impact of One Big Beautiful Bill Act 

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the United States. The legislation introduced a wide array of changes to the U.S. corporate tax