Celsius Holdings Inc. (CELH) is making waves in the stock market following the release of its fourth-quarter earnings and the announcement of its major acquisition of Alani Nutrition, the maker of the popular Alani Nu energy drink brand. The company’s stock price surged more than 30% in premarket trading, a sign of investor confidence in its future growth prospects.
Record Earnings and Strong Revenue Performance
Celsius reported a record-setting Q4 revenue of $332.2 million, surpassing analyst expectations of $326 million. In addition to the impressive revenue, the company posted adjusted earnings of 14 cents per share, outpacing the 11 cents per share forecast by analysts.
This robust performance demonstrates Celsius’s ability to generate revenue and growth even in a highly competitive market. The Celsius earnings report also revealed strong growth in its North American market, which accounted for $1.28 billion in sales.
International revenue also saw a notable increase, growing 37% to $74.7 million. While profits declined—adjusted EBITDA fell 13%, and net profit dropped 36%—the company’s top-line performance reflects its significant potential for future growth.
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The $1.8 Billion Acquisition of Alani Nu
A key driver behind the stock’s upward movement is Celsius’s announcement of a $1.8 billion acquisition of Alani Nu. The deal is expected to further strengthen Celsius’s position in the U.S. energy drink market by adding a brand with a loyal following among Gen Z and millennial consumers.
Alani Nu, which specializes in female-focused functional drinks and wellness products, has quickly gained popularity, particularly among social media influencers.
The acquisition, which is set to be finalized by mid-2025, will combine two growing brands in the U.S. energy drink category, with Celsius aiming to capitalize on the increasing consumer demand for zero-sugar, better-for-you beverages.
The deal includes a net purchase price of $1.65 billion, along with $150 million in tax assets. Celsius’s CEO, John Fieldly, emphasized the potential for the acquisition to drive innovation and broaden distribution.
The combined platform, he said, would enable both companies to enhance brand awareness, expand their consumer base, and accelerate global expansion. The integration of Alani Nu is expected to boost sales to approximately $2 billion across both brands and provide a significant earnings-per-share (EPS) contribution in the first full year.
Strategic Implications for Celsius and Alani Nu
The acquisition is also expected to bring operational synergies, with an estimated $50 million in cost savings projected over the next two years. As Celsius and Alani Nu integrate their operations, the new partnership will be well-positioned to drive growth in adjacent markets, making further strides in the better-for-you energy drink segment.
Celsius, which already holds an 11.8% market share in the U.S. energy drink market, ranked third in 2024 behind Red Bull and Monster Beverage.
However, the company has been responsible for 30.3% of all energy drink category growth over the past year, signaling its rising prominence in the space. The acquisition of Alani Nu will likely help Celsius continue to challenge the dominance of larger players like Monster and Red Bull, potentially securing a larger slice of the market.
Market Reaction and Future Outlook
The Celsius stock surged in premarket trading by 33%, reflecting strong market optimism following the acquisition announcement.
The increase in share price signals that investors are confident in the company’s ability to deliver significant growth in the coming years, particularly as the energy drink sector continues to evolve with changing consumer preferences.
Despite challenges such as declining profits in 2024, Celsius’s growth trajectory, combined with the strategic acquisition of Alani Nu, places the company in a favorable position for future expansion.
By continuing to innovate and capture new market segments, Celsius is poised to build on its recent successes and further establish itself as a leader in the energy drink industry.
With both Celsius earnings surpassing expectations and a promising acquisition strategy in play, the company’s future looks increasingly bright, and investors are eager to see how these moves will pay off.
