Celsius Holdings, Inc. (CELH) Business

Item 1. Business.

When used in this Report, unless otherwise indicated, the terms the "Company,” “Celsius,” “we,” “us” and “our” refer to Celsius Holdings, Inc. and its subsidiaries. Definitions of certain capitalized terms used in this Report are included within the Master Glossary.

We were incorporated in the State of Nevada on April 26, 2005. Our Common Stock is listed on the Nasdaq Capital Market under the symbol "CELH".

Overview

Celsius operates as a functional energy drink and wellness beverage company in the U.S. and internationally. We develop, process, market, sell, manufacture and distribute a portfolio of differentiated products with innovative formulas meant to positively impact the lives of our consumers. Our products are positioned as premium lifestyle beverages designed to support active, wellness-oriented, modern energy drink consumers. Our portfolio primarily consists of energy drinks offered under the CELSIUS®, Alani Nu® and Rockstar® brands, with CELSIUS® and Alani Nu® also offering a range of additional wellness products. Through these brands, we serve a broad range of consumers across the functional energy and adjacent wellness categories.

Our products are available in the U.S., Canada, Europe, the Middle East and the Asia-Pacific regions. They are sold through multiple channels, including conventional grocery, natural-food and convenience stores, fitness centers, mass-market and vitamin specialty retailers and e-commerce platforms.

On the Closing Date of the Pepsi Transactions, we entered into a series of related transactions and agreements with Pepsi, which included the following:

•Securities Purchase Agreement - We issued and sold 390,000 shares of Series B Preferred Stock to Pepsi and modified certain terms of the outstanding shares of Series A Preferred Stock to align key terms, such as conversion and redemption dates, with those of the newly issued Series B Preferred Stock, all of which are currently held by Pepsi. These issuances and modifications formed part of the overall consideration exchanged in connection with the Pepsi Transactions. As part of these arrangements, Pepsi received the right to designate an additional member to our Board, giving Pepsi a total of two Board seats.

•Rockstar Acquisition - Pursuant to the Transaction Agreement, we acquired certain assets and assumed certain liabilities comprising Rockstar in the U.S. and Canada. The consideration for this acquisition included the consideration described above and other commercial commitments set forth in the Transaction Agreement.

•Captaincy - Also pursuant to the Transaction Agreement, we and Pepsi commenced the Captaincy, an enhanced long-term commercial arrangement under which Pepsi has agreed to use commercially reasonable efforts to sell and distribute our products in the U.S. in accordance with jointly developed sales, placement and promotional priorities. The Captaincy commenced on the Closing Date of the Pepsi Transactions and is expected to continue for the term of the A&R U.S. Distribution Agreement.

•A&R Distribution Agreements - We entered into the A&R Distribution Agreements, under which Pepsi continues to serve as our primary distributor for Celsius products in the U.S. and Canada and has become the primary distributor of Alani Nu and Rockstar products in these markets. All other material provisions of each of the Original U.S. Distribution Agreement and Original Canadian Distribution Agreement remain in effect.

On the Closing Date of Alani Nu, we completed the Alani Nu Acquisition for a total consideration comprising (i) $1,275.0 million in cash, subject to adjustment as set forth in the purchase agreement, (ii) an aggregate of 22,451,224 shares of our Common Stock and (iii) up to $25.0 million in additional cash consideration, which we determined to be fully payable to the Sellers based on Alani Nu’s revenue meeting an agreed upon target for calendar year 2025 and which we expect to pay in the first quarter of 2026.

On the Closing Date of Alani Nu, Celsius and certain of its subsidiaries, the lenders and issuing banks from time to time party thereto and UBS AG, Stamford Branch, as administrative agent and collateral agent, entered into a Credit Agreement, which provided for a term loan facility in an aggregate principal amount of up to $900.0 million, which was fully drawn on the Closing Date of Alani Nu to fund a portion of the cash consideration paid to the Sellers (the remaining cash consideration was funded with existing cash on hand), and the Revolving Credit Facility in an aggregate principal amount of up to $100.0 million, which remained undrawn as of December 31, 2025.

On October 2, 2025, we entered into the First Refinancing Amendment, which amended the Credit Agreement and reduced the applicable interest rates on both the Term Loan Facility and the Revolving Credit Facility by 75 basis points. In connection with the amendment, we repaid the remaining balance of the $900.0 million term loan with a new $700.0 million term loan and approximately $197.8 million of cash on hand. No prepayment penalties were incurred. All other material terms of the Credit Agreement remained unchanged.

1

Our Products

We introduced our first CELSIUS® functional energy drink in 2005 and our portfolio has expanded significantly as we have broadened our brand platform. Today we offer a range of product lines under the CELSIUS®, Alani Nu® and Rockstar® brands. Each brand features unique flavor profiles, formulations and consumer positioning, allowing us to serve a broad and diverse consumer base within the functional energy category.

We offer a unified portfolio of functional energy and wellness beverages across multiple brands, providing consumers with a variety of formats, flavor profiles and functional benefits. Certain products within our portfolio are formulated with ingredients such as caffeine, green tea extract (EGCG), ginger root extract, amino acids, vitamins, electrolytes and other performance-oriented components. Many products contain zero sugar, are low in calories and are designed to support energy, focus, hydration and overall wellness. Our portfolio includes the following primary product types:

•Ready-to-Drink Energy Beverages – Carbonated and non-carbonated caffeinated energy drinks available primarily in 12-ounce and 16-ounce cans. These products include original formulations, zero-sugar variations and fruit-forward flavors designed to meet a wide range of consumer taste preferences.

•On-the-Go Powder and Hydration Sticks – Single-serve powder sticks designed for portability and mixed with water. These products provide functional benefits similar to ready-to-drink energy beverages and hydration products, offering consumers a convenient and travel-friendly format.

•Nutrition and Wellness Products – Select wellness-focused items offered across the portfolio, including protein and nutrition products, amino blends and other functional supplements that broaden our reach beyond traditional energy beverages.

Across our portfolio, our packaging emphasizes bold graphics and vibrant color palettes to create strong shelf presence and reinforce our brand positioning to reach a broad range of new and existing energy drink consumers. Our products are sold through multiple channels including conventional grocery, natural-food and convenience stores, fitness centers, mass-market and vitamin specialty retailers and e-commerce platforms, allowing us to serve a diverse base of consumers within the functional energy and wellness categories.

Manufacture and Supply of Our Products

Our functional energy drinks, on-the-go powders and other wellness products are primarily produced by well-established beverage co-packers. Additionally, we leverage our in-house manufacturing facility. Utilizing these strategically located resources enables us to efficiently produce and distribute our products. We procure most ingredients and all packaging materials, while both our co-packers and internal operations handle assembly. Our co-packers charge us a fee on a per-case basis. The shelf life of the majority of our products ranges from 15 to 24 months.

We, and our co-packers, purchase raw materials from domestic and international suppliers. The principal raw materials used in our products include aluminum cans, packaging components, natural flavors, sweeteners and functional ingredients such as caffeine, vitamins, minerals and botanical extracts. The cost and availability of these materials are subject to market fluctuations. Packaging materials and most other ingredients are sourced from multiple suppliers, and we are not currently dependent on any single supplier for our overall raw material or packaging needs. We believe that our co-packing arrangements and supply sources sufficiently meet our present requirements.

Distribution

Pepsi Distribution Agreement

On the Closing Date of the Pepsi Transactions, we entered into the A&R Distribution Agreements, which amended and restated in their entirety the Original U.S. Distribution Agreement and Original Canadian Distribution Agreement. Under the A&R Distribution Agreements, Pepsi continues to serve as our primary distributor for Celsius products in the U.S. and Canada and has also become the primary distributor of our Alani Nu and Rockstar products in these markets. All other material terms and covenants contained in the original agreements remain in effect.

In connection with expanding Pepsi’s distribution responsibilities to include Alani Nu, we terminated certain former Alani Nu distributors and transitioned territory rights to Pepsi. Pepsi agreed to reimburse us for distributor termination fees up to $275.0 million, to facilitate this transition. Cash received for these reimbursements is contractually restricted and must be used to settle such obligations, and any unspent amounts must be returned to Pepsi. These reimbursements are recognized as deferred revenue and amortized on a straight-line basis over the approximately 17-year term of the A&R U.S. Distribution Agreement.

2

The A&R Distribution Agreements continue to provide Pepsi with certain rights contained in the original agreements, including rights of first offer with respect to distribution in select additional territories or future channels. Except for termination by either party “with cause,” the agreement may be terminated by either party upon 12 months’ written notice in the 19th year of the term (i.e., 2041), the 29th year of the term (i.e., 2051) and in each 10th year thereafter (i.e., 2061, 2071, etc.). Termination provisions, including compensation due upon a termination for cause, remain materially consistent with those contained in the original agreements.

Domestic

In the U.S. and Canada, we market and sell our products across a diverse range of retail channels, including supermarkets, convenience stores, drugstores, nutritional stores, food service providers and mass merchants. Our products are widely available in major retail segments, including conventional grocery, natural food stores, convenience stores, fitness centers, mass market retailers, vitamin specialty stores and e-commerce platforms.

Domestically, we distribute our products through a combination of DSD networks, independent distributors and direct sales to retailers. Additionally, our products are available online through leading e-commerce platforms, including Amazon, Shopify, Instacart and Walmart.com, ensuring broad accessibility for consumers.

International

We are continuing to make significant strides internationally for our flagship product CELSIUS® in key global markets. We distribute certain of our products in various foreign regions through regional and country-specific distribution partners, leveraging local market expertise to optimize distribution and brand visibility. With partnerships spanning Europe and the Asia-Pacific region, we have strategically positioned the brand to meet growing global demand. To further support these initiatives, we recently appointed a president to oversee our international operations and drive strategic expansion across key global markets. These efforts demonstrate our commitment to leveraging partnerships, such as those within the Suntory Group, to drive product availability and brand visibility in both established and emerging markets, while utilizing local market expertise to optimize our global expansion strategies.

Customers

Our customer base primarily consists of distributors, e-commerce retailers and various brick-and-mortar outlets, including grocery and convenience stores, club stores and health-focused locations such as gyms and nutrition stores. To support and incentivize the distribution, sales and marketing of our products, we rely on and provide various financial incentives. These incentives include but are not limited to volume-based rebates and promotions, placement fees, listing fees and other discounts.

In 2025, sales to Pepsi constituted 43.2% of our total revenue. As of December 31, 2025, receivables from Pepsi represented 46.2% of our total receivables. The loss of Pepsi or Pepsi's affiliates as our customers could significantly impact our operations, potentially resulting in a material adverse effect on our financial results.

Sales and Marketing

In our sales and marketing approach, we prioritize differentiation, ensuring our brands and products stand out visually and distinctively from other beverages on the shelves of retailers. We continuously review and refresh our products and packaging to maintain uniqueness and appeal. In addition to maximizing product visibility in stores, we focus on developing brand awareness through targeted marketing initiatives, such as sporting events, print (e.g., print displays), radio, digital and streaming platforms, online and social media, television advertising, direct sponsorships, endorsements and in-store displays to promote our brands. Additionally, our branded vehicles are deployed at events for product sampling and to enhance consumer engagement.

Seasonality

As is common in the functional energy drink industry, product sales tend to be seasonal, with the highest volumes typically occurring during the second and third calendar quarters, aligning with the warmer months in our key markets. However, over the course of a full year, these seasonal fluctuations have not had a material impact on our financial results.

Competition

Our products compete broadly with not only functional energy drinks, but all categories of non-alcoholic liquid refreshments. The functional energy drink and liquid refreshment sectors are highly competitive and include international, national, regional and local producers and distributors. Our direct competitors in the functional energy drink sector include but are not limited to Monster Beverage Corporation, Red Bull GmbH, The Coca-Cola Company, Pepsi, Keurig Dr Pepper Inc., Nestlé S.A., BlueTriton Brands, Starbucks Corporation, Congo Brands and Molson Coors.

3

Intellectual Property Rights

We have registered, or have filed applications to register the CELSIUS® , ALANI NU® and ROCKSTAR® trademarks, among others, with the U.S. Patent and Trademark Office, as well as a number of trademarks in other countries where our products are distributed and sold. Our trademarks are of considerable value and importance to our business and we actively maintain and renew these registrations to ensure their continued validity.

To protect the proprietary nature of our product formulas, we employ measures such as confidentiality agreements with our contract packers and ingredient suppliers. We maintain these formulas as trade secrets, which we believe is the preferable method of protection, as patenting would require disclosure.

In addition, we assert copyright ownership of the statements, graphics, and content on our product packaging and marketing materials. We actively pursue legal action against unauthorized use of our trademarks, trade dress and copyrights. For simplicity, trademarks, service marks, logos and trade names in this Report may appear without the ® and ™ symbols, but this does not imply a waiver of our rights or those of applicable licensors under the law.

Government Regulation

The production, distribution and sale of our products in the U.S. are subject to numerous federal, state and local statutes and regulations, including, without limitation the Federal Food, Drug and Cosmetic Act, the Federal Trade Commission Act and the Occupational Safety and Health Act. Additionally, various environmental statutes and regulations apply to the production, transportation, sale, safety, advertising, labeling, packaging and ingredients of our products. This includes adhering to data privacy and personal data protection laws and regulations, such as the CCPA, in applicable jurisdictions.

We are also subject to various state laws, including California's Proposition 65, which requires that a specific warning appears on any product that contains a component listed by California as having been found to cause cancer or birth defects. Currently, none of our products are required to display warnings under this law.

Internationally, we rely on outsourced manufacturing and distribution channels, which are subject to compliance with the laws and regulations in the foreign countries where our products are sold. Certain international markets, including countries in the European Union, have specific energy drink standards and ingredient restrictions that we closely monitor and with which we must comply.

Compliance with Environmental Laws

Our co-packers and internal manufacturing facilities in the U.S. are subject to federal, state and local environmental laws and regulations, including those relating to air emissions, the use of water resources and recycling. Similarly, our operations in other countries are governed by respective environmental laws. Changes in environmental compliance mandates and any expenditures necessary to comply with such requirements, have not to date had a material adverse effect on our capital expenditures, financial results, competitive position or future growth.

We also monitor emerging climate-related regulations, including California’s SB 253 and SB 261, which require detailed greenhouse gas emissions disclosures and climate-related financial risk reporting. These requirements and associated deadlines continue to evolve and we actively track updates to ensure timely compliance.

Container Deposits

Measures have been enacted in various localities and states that require that a deposit be charged for certain non-refillable beverage containers. The precise requirements imposed by these measures vary by jurisdiction. For certain localities and states, we are required to collect deposits from our customers and to remit such deposits to the respective jurisdictions based upon the number of cans and bottles of certain carbonated and non-carbonated products sold in such states. In many instances, we rely on third party providers and distribution partners to help ensure compliance with these regulatory requirements.

Other deposit, recycling or product stewardship proposals have been introduced in certain states, localities and in Congress. We anticipate that similar legislation or regulations may be proposed in the future at the local, state and federal levels, both in the U.S. and internationally.

Human Capital Resources

As of December 31, 2025, the Company employed 1,497 people globally, including both direct employees and those engaged through professional employer organizations. This total includes 1,335 in North America (comprising 1,322 in the U.S. and 13 in Canada), 158 in the EMEA region and 4 in the Asia-Pacific region.

4

Employees

We believe people are our most important assets and we strive to attract and retain high-performing talent. Through comprehensive and competitive compensation and benefits, ongoing education and development opportunities and a focus on health and well-being, we strive to support our employees in all aspects of their lives.

We believe we have a talented, motivated and dedicated team and work to create an inclusive, safe and supportive environment for all team members. Our workforce management practices are designed to align with applicable employment laws and regulations and to support the Company’s strategic objectives.

As a global organization, we recognize and respect the diverse cultural, economic and regulatory landscapes in which we operate. We aim to adapt our talent management strategies to ensure that we equitably support the members of our global workforce, including tailoring our strategies on a regional basis, whether through localized compensation packages, regional professional development opportunities or culturally inclusive benefits.

As of December 31, 2025, none of our domestic employees and only a limited number of our employees located in Europe, were represented by a labor union or have terms of employment that are subject to a collective bargaining agreement. We consider our relationships with our employees to be strong and have not experienced any work stoppages.

Use of Technology & AI in Workforce Management

We use technology, including data analytics tools and limited AI-enabled applications, to support certain human capital management activities such as workforce planning, recruiting process efficiencies, learning and development administration and internal reporting. These tools are intended to assist, rather than replace, human judgment and decision-making. We do not rely on AI as the sole basis for any employment-related decisions, including hiring, compensation, performance evaluation or termination.

Our use of AI is subject to internal governance, policies and oversight designed to promote responsible use, data privacy, security and compliance with applicable laws and regulations, including our Responsible AI Framework, which guides the safe, secure and purpose-aligned adoption of AI technologies. Human review and oversight are incorporated into relevant processes to mitigate the risk of bias, errors or unintended outcomes. We periodically review our practices as technology, regulatory expectations and business needs evolve.

Diversity

We believe that our culture celebrates diverse talent, individual identity and different points of view, which includes empowering our employees to contribute new ideas that may contribute to our success. Women and racial and ethnic minorities collectively constitute a meaningful part of our overall workforce across various levels of our organization.

Culture and Engagement

We believe empowering employees at all levels is essential to the ongoing improvement of our organization. Open and honest communication among team members, managers and leaders helps create an open, collaborative work environment. Team members are encouraged to raise questions, provide feedback and share concerns through established management channels.

We regularly seek employee feedback through surveys, focus groups and one-on-one meetings. This feedback is reviewed by management and, where appropriate, informs updates to policies, practices and engagement initiatives.

Leadership, Training and Development

We invest in learning and development opportunities intended to enhance leadership capabilities, functional skills and overall effectiveness. Our training programs include a mix of formal and informal learning opportunities, which may vary by role, function and region. These programs are designed to support employee development, engagement and retention.

Our leadership development efforts focus on identifying and developing future leaders and supporting succession planning. Programs emphasize skills such as strategic thinking, decision-making and people management. Participation in leadership and development programs is subject to business needs, role requirements and individual performance considerations.

Compensation and Benefits

We seek to provide competitive and equitable compensation programs designed to attract and retain talent and align employee contributions with Company performance. Our compensation programs are structured based on factors such as role, skills, experience, geographic location and market data. We conduct periodic pay equity analyses to help assess our compensation practices and, where appropriate, make adjustments. As permitted by local law, we may also perform adverse impact analyses related to compensation elements. These analyses are intended to inform management and do not guarantee specific outcomes. We offer a range of benefits that vary by country and region, which may include health and welfare benefits, retirement savings plans, paid time off, incentive programs and equity-based awards for eligible employees.

5

Oversight

The Compensation Committee of our Board provides oversight of our human capital management strategies, including compensation philosophies and programs, leadership development and succession planning, and diversity, equity and inclusion initiatives. Management is responsible for the day to-day execution of these programs and regularly reports to the Compensation Committee on relevant matters.

We believe our approach to human capital resources supports our business strategy and long-term growth objectives.

Available Information and Use of Our Company Website to Disseminate Information

This Report, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements on schedule 14A and all amendments to those reports are made available free of charge through the Company’s website, at www.celsiusholdingsinc.com, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act. Additionally, the foregoing reports and amendments thereto are available on the SEC's website at www.sec.gov.

We inform our investors and the public of material corporate information through various channels, including SEC filings, press releases, public conference calls, webcasts and our official corporate website at www.celsiusholdingsinc.com. We have used and expect to continue to use, our website as a means of disclosing material information to the public in a broad, non-exclusionary manner, including for purposes of the SEC's Regulation Fair Disclosure. This information may include, without limitation, updates on our financial performance, significant personnel changes, brand developments and other pertinent matters. We regard the content posted on our corporate website as potentially material to our investors. Therefore, we encourage our investors, the media, customers, consumers, business partners and other stakeholders to regularly review the materials we disseminate through these platforms. Periodically, we may modify the list of communication channels for disseminating material information. Any such changes will be communicated and updated on our website. Information contained on, or accessible through, our website is not a part of and is not incorporated by reference into, this Report or any other filings we make with the SEC.