How Celsius Makes its Money: Revenue Breakdown

How Does Celsius Make its Money?

Celsius Holdings is a fitness-oriented energy drink company that has disrupted the beverage industry. Marketed as a healthier alternative to traditional energy drinks, Celsius products are known for their functional ingredients including green tea extract, ginger, guarana, and vitamins. The company positions itself in the “better-for-you” energy drink category — no artificial preservatives, no high fructose corn syrup, and no aspartame.

What was once a niche fitness brand has grown into the third-largest energy drink in the United States, behind only Monster and Red Bull. A pivotal moment came in 2022 when PepsiCo made a $550 million investment in Celsius and became its exclusive distribution partner in the US. This gave Celsius access to PepsiCo’s massive distribution network, placing the brand in hundreds of thousands of retail locations nationwide.

Revenue Breakdown

Celsius generated $1.36 billion in revenue in 2024, a modest 2.9% increase from $1.32 billion in 2023. Revenue growth decelerated significantly after explosive growth in prior years.

All values in millions USD.

North America — The Core Market

North America accounts for 94.8% of Celsius’ revenue. The company sells its products primarily through retail channels:

• Major retailers: Celsius is available in Walmart, Target, Costco, Kroger, and most major grocery and convenience store chains
• Club and mass merchants: Bulk formats drive significant volume
• Convenience and gas: A critical channel for energy drinks, where impulse purchases drive revenue
• E-commerce: Amazon and direct online sales represent a growing portion

The 2022 PepsiCo distribution deal was transformative. PepsiCo’s network more than doubled Celsius’ retail footprint and dramatically improved shelf placement. However, after the initial distribution gain, revenue growth naturally decelerated as the one-time shelf-space expansion was lapped.

International — The Growth Frontier

International revenue is small at $70 million but growing rapidly at 55.6%. Celsius has been expanding into markets including the UK, Ireland, Australia, New Zealand, and Scandinavia. The global energy drink market is massive, and Celsius has barely begun to tap international demand for healthier functional beverages.

Income Statement Breakdown

All values in millions USD.

Gross Margin Compression

One notable trend in 2024 is that gross profit actually declined slightly despite revenue growth — from $776 million to $763 million. Gross margin contracted from 58.9% to 56.3%. This was driven by:

• Promotional spending: Higher trade promotions and slotting fees to maintain and expand shelf space
• Product mix: Changes in channel and product mix impacting average selling prices
• Input costs: Ingredient and packaging cost fluctuations

Profitability — Still Strong, But Moderating

Celsius remains highly profitable with operating income of $311 million and net income of $258 million. However, both metrics declined from 2023 levels, reflecting the gross margin compression and increased operating expenses. This is a common pattern for CPG companies transitioning from hyper-growth to maturity: profitability can temporarily moderate as the company invests to sustain growth.

Key Financial Metrics

Gross Margin: 56.3% — Down from 58.9% in 2023. For comparison, Monster Beverage maintains gross margins around 53%, so Celsius is still above its closest comparable.

Operating Margin: 22.9% — Down from 27.1% but still very healthy for a consumer beverage company. Monster’s operating margin is approximately 28%.

Revenue Growth: 2.9% — A sharp deceleration from the 95%+ growth rates Celsius experienced in 2022-2023. The question for investors is whether growth reaccelerates.

The PepsiCo Partnership

The PepsiCo relationship is central to Celsius’ business. Key aspects:

• $550M investment: PepsiCo purchased convertible preferred stock in August 2022
• Exclusive distribution: PepsiCo handles warehousing, distribution, and delivery to retailers across the US
• Marketing support: Joint marketing efforts and placement in PepsiCo’s broader portfolio discussions with retailers
• Long-term commitment: The distribution agreement runs for an extended term, giving both parties stability

While the partnership provides enormous distribution advantages, it also means Celsius’ growth is partly dependent on PepsiCo’s execution and prioritization.

What to Watch Going Forward

• Revenue reacceleration: Can Celsius return to double-digit growth through new products, international expansion, and continued market share gains?
• Gross margin trajectory: Investors will watch whether promotional spending moderates and margins stabilize or continue compressing.
• International scale: The 55.6% international growth rate is encouraging, but Celsius needs to meaningfully scale outside North America to drive the next leg of growth.
• Market share trends: Celsius’ share of the US energy drink market is a key metric. Any loss of share to competitors (Monster, Red Bull, Ghost, Alani Nu) would be concerning.
• Innovation pipeline: New flavors, formats, and product lines (like Celsius Essentials with higher caffeine) are important for maintaining consumer interest.