Company: CELH
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001341766-25-000080
Chunk: 9

Company: Celsius Holdings, Inc.
Filing Date: 2025-05-06
Form: 10-Q
Item: Item 8
Chunk 9
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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)

4.    REVENUE

The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied. The primary performance obligation is the promise to sell finished products to customers, including distributors, wholesalers, and retailers. Performance obligations are typically satisfied once control or title is transferred based on the commercial terms of the applicable agreements with customers, and traditionally such agreements do not allow for a right of return. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. Revenue is recorded net of variable consideration, such as provisions for returns, discounts and allowances. Such provisions are calculated using historical averages and adjusted for any expected changes due to current business conditions. Consideration given to customers for cooperative advertising is recognized as a reduction of revenue except to the extent that there is a distinct good or service, in which case the expense is classified as selling, general and administrative expenses, in the Company's condensed consolidated statements of operations and comprehensive income. The amount of consideration the Company receives and revenue the Company recognizes varies with changes in incentives the Company offers to its customers and their customers.Information about the Company’s revenues by geographical location for the three months ended March 31, 2025 and 2024 is as follows:Three Months Ended March 31,20252024North America$306,534 $339,512 Europe18,659 14,142 Asia-Pacific2,244 675 Other1,839 1,379 Revenue$329,276 $355,708 All of the Company’s North American revenue was derived from the United States and Canada. Revenue from Puerto Rico is included in the 'Other' category.Promotional (Billback) AllowancesThe Company’s promotional allowance programs with its distributors or retailers are executed through separate agreements in the ordinary course of business (variable consideration). These agreements provide for one or more of the arrangements described below and are of varying duration. The Company’s billbacks are calculated based on various programs with distributors and retail customers, and accruals are established for the Company’s anticipated liabilities. These accruals are based on agreed upon terms as well as the Company’s historical experience with similar programs and require management’s judgment with respect to estimating consumer participation and distributor and retail customer performance levels. Differences between estimated and actual promotional and other allowances