Celsius Holdings Stock (CELH) Q2 2026 Earnings: The Margin Fell Twice As Far

Celsius Holdings, Inc. (CELH) Q2 2026 — Q2 2026 (3 months ended June 30, 2026): revenue $817.9M, UP 10.6%, vs a $870.1M consensus - a 6.0% MISS. Adjusted diluted EPS $0.36 vs a $0.4139 bar - a 13.0% MISS (GAAP diluted EPS was $0.14; the bridge is $0.01 of acquisition costs plus $0.21 of distributor termination fees). Gross margin 48.1% vs 51.5%. But last year's cost of revenue contained a $21.7M Alani Nu inventory step-up: clean the base and the margin decline is 632bps, not 340. Adjusted EBITDA $184.2M, DOWN 12.4%. Stock -18.46% on the print day, then +16.83% the next session on an activist headline. Celsius Holdings missed on both lines, fell 18.46% to a 52-week low set on the print day, and then rallied 16.83% the very next session - its best day in a year. Nothing about the quarter changed overnight. What changed was a governance headline: Russ Savage, who founded Rockstar Energy and sold it to PepsiCo for over $4 billion, disclosed a 4.7% stake and demanded the CEO's job. Meanwhile the number nobody looked at got worse. Celsius reported a 340 basis point gross margin decline. Last year's cost of revenue contained a $21.7M purchase-accounting inventory step-up - a charge the company itself adds back. Put it back and the base was 54.4%, not 51.5%. The real decline is 632 basis points, nearly double the headline. THE CALL: HOLD (3/5, FAIR VALUE $31.50 vs THE $27.77 CLOSE - 25% BELOW WALL STREET, AND ONLY 13% ABOVE THE PRICE) — base-case value ~$31.5 vs ~$27.77 today. KEY METRICS: - CALL: HOLD 3/5, fair value $31.50 vs the $27.77 Aug 7 close = 13.4% upside. Bull $41, bear $21. Buy under $25. EV $8.83B = 2.9x TTM revenue of $3.05B and 12.3x TTM adjusted EBITDA of $719M (13.9x charging the terminations). - Street: Buy. 23 analysts, average target $42.22, low $26, high $57. Six cuts in two days: Needham $55 to $35, Stifel $45 to $37, Deutsche Bank $44 to $39, Morgan Stanley $48 to $42, UBS $50 to $44, B. Riley $85 to $56. We are 25% BELOW them. What to watch: UP: US tracked retail sales for the portfolio +31.0% with a 20.1% dollar share of RTD energy, supplying ~30% of the zero-sugar category's $640M of quarterly growth; Alani Nu revenue $364.4M, +21.0%, with retail sales +55.7% and an 8.7% share sixteen months after acquisition; CELSIUS brand dollars per point of distribution +16% quarter on quarter on ~7% FEWER points; first-half operating cash flow $296.3M vs $147.1M and free cash flow $271.3M vs $131.9M - more than double, AFTER paying $255.3M of distributor terminations in cash; cash $631.2M against $667.9M of long-term debt, so net debt is just $34.7M; $101.4M of stock repurchased in the quarter; and an activist with 4.7% now forcing the board to defend itself. DOWN: revenue missed by 6.0% and adjusted EPS by 13.0%; clean gross margin -632bps against the reported -340; management's own February promise of 'gross margin percentages in the low 50s' for 2026 is two quarters unmet at ~48%; adjusted EBITDA -12.4% on +10.6% revenue with the margin down 590bps to 22.5%; adjusted SG&A ROSE from 28.1% to 28.6% of revenue even as reported SG&A 'improved'; $80.9M of distributor termination fees added back to adjusted; the CELSIUS brand shipped -11.7% and Rockstar retail is -13%; and $1.76B of PepsiCo convertible preferred takes 34% of net income before the common, with its as-converted overhang up from 22.0M to 33.4M shares in twelve months. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.