Company: CELH
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0001341766-25-000104
Chunk: 50

Company: Celsius Holdings, Inc.
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 1
Chunk 50
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 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 system, including permanent extensions of certain provisions of the Tax Cuts and Jobs Act of 2017 and substantial modifications to the international tax regime applicable to U.S. multinational corporations. Key international provisions include changes to the Global Intangible Low-Taxed Income regime, the treatment of foreign tax credits, and interest expense limitations under Section 163(j). While certain provisions take effect in 2025, others are phased in over subsequent years. We are currently evaluating the potential impacts of the OBBBA on our consolidated financial statements. As the legislation was signed into law after the close of our second quarter, no impacts are included in our operating results for either the three or six months ended June 30, 2025.

Interest Rate Risk

Fluctuations in market interest rates may cause future cash flows to vary. Interest rates are highly sensitive to many factors, including fiscal and monetary policies and domestic and international economic and political considerations, as well as other factors beyond our control. This can affect both our borrowing costs and the fair value of our debt obligations. We are subject to interest rate risk in connection with the term loan facility, which bears interest at