Celsius Holdings, Inc. (NASDAQ: CELH) reported mixed second-quarter 2026 results, with revenue rising 11% year over year while profitability declined under pressure from higher promotional costs and shifting sales channels. The results come as the energy beverage category—where Celsius competes against established players like Monster Beverage and Red Bull—faces intensifying competition for shelf space and consumer attention. The stock traded at $24.42, down $4.73, following the earnings release.

Revenue Growth Driven by Portfolio Expansion

Celsius generated $817.9 million in second-quarter revenue, up from $739.3 million during the same period in 2025, representing approximately 10.6% year-over-year growth. North American revenue reached $790.7 million, while international revenue increased to $27.2 million.

First-half revenue totaled $1.6 billion, a 50% increase from the prior year. North American sales climbed 51% during the six-month period, and international revenue advanced 32%, reflecting continued expansion across multiple overseas markets.

Alani Nu remained the largest growth driver during the quarter, generating approximately $364.4 million in sales on sustained consumer demand. The brand, which Celsius acquired to broaden its appeal beyond the fitness-oriented CELSIUS flagship, now contributes roughly 45% of quarterly revenue. Higher customer orders and the PepsiCo distribution transition also contributed to revenue growth. Rockstar Energy added approximately $66.5 million in quarterly revenue after joining the company's portfolio.

The core CELSIUS brand, however, recorded an 11.7% revenue decline from the previous year. Increased promotional spending, inventory adjustments, and softer club channel demand weighed on the brand's performance. The decline underscores the challenge of revitalizing the flagship brand while simultaneously integrating newly acquired labels.

Margins and Earnings Under Pressure

Gross profit rose to $393.7 million from $380.9 million one year earlier, but gross margin contracted to 48.1% from 51.5%. Management attributed the decline to increased trade spending, promotional investments, a higher mix of direct store delivery sales—which reduced reported net revenue—and changes in sales channels. The shift toward direct store delivery, part of the PepsiCo distribution transition, typically lowers recognized revenue because distribution costs are netted against the top line. Integration benefits from acquired businesses partially offset these pressures.

Net income fell to $55.3 million, compared with $99.9 million in the second quarter of 2025. Net income attributable to common shareholders dropped to $36.4 million. Diluted earnings per share decreased to $0.14 from $0.33.

Adjusted diluted earnings per share reached $0.36, down from $0.47 one year earlier. Adjusted EBITDA declined 12% to $184.2 million. First-half adjusted EBITDA increased 36% to $379.6 million, reflecting stronger cumulative performance over the six-month period.

Brand Strategy and Integration

The company completed the Rockstar integration during the second quarter and continued optimizing product assortments across its portfolio. Celsius is now positioning itself around three core brands: CELSIUS, Alani Nu, and Rockstar Energy. The three-brand structure spans fitness-oriented, lifestyle, and mainstream energy segments, marking a significant shift from the company's origins as a single-label fitness drink maker.

Management stated: "We delivered a double-digit increase in second quarter revenue, completed the Rockstar integration, and maintained gross margin near first-quarter levels despite a challenging commodity environment."

Executives noted that optimization efforts remain focused on improving product productivity and strengthening retail execution. The company expects these initiatives to support sustainable growth for the CELSIUS brand, while the broader portfolio provides additional opportunities across the energy drink category.

Celsius now operates with two billion-dollar brands and an expanded distribution network. Key metrics investors and industry analysts are likely to monitor in coming quarters include whether promotional spending on the core CELSIUS brand stabilizes, how Rockstar contributes to profitability following its integration, and whether the PepsiCo distribution transition delivers the scale efficiencies management has targeted. The company continues to strengthen its position within the energy beverage market across multiple consumer segments and consumption occasions.