Celsius Holdings, Inc.

I'd like to hand over the conference call to Paul Weissman. You may now begin.

Thank you and good morning, everyone. We appreciate you joining us today for Celsius Holdings' first quarter 2024 earnings conference call. Joining me on the call today are John Fieldley, Chairman and Chief Executive Officer, Jared Langens, Chief Financial Officer, and Toby David, Chief of Staff. The call will open to questions following the prepared remarks. The company released its first quarter earnings press release earlier this morning and all materials are available on the company's website Celsius holdings inc.com as well as on the SEC website sec.gov. As a reminder, an audio replay of this call will be available later today and can be accessed with the same live webcast link used to join today's call. Please be aware that this call may contain forward looking statements which are based on forecasts, expectations, and other information available to management at this time. These statements involve numerous risks and uncertainties, including many that are beyond the company's control. Except to the extent as required by law, Celsius Holdings undertakes no obligations and disclaims any duty to update any of these forward looking statements. We encourage you to review in full our safe harbor statements contained in today's press release and in our quarterly filings with the SEC for additional information. Additionally, management will share operating results on both a GAAP and non-GAAP basis. Descriptions of the non-GAAP financial measures that we use, such as non-GAAP adjusted EBITDA, and reconciliations of these measures to our results as reported in accordance with GAAP are detailed in our earnings release for the first quarter of 2024. With that, I'd like to turn the call over to Chairman and Chief Executive Officer John Fieldley for his prepared remarks.

Thank you, Paul. Good morning, everyone. Thank you for joining us today. This morning, Celsius reported a 37% year-over-year increase in revenue for the first quarter of 2024, totaling $355.7 million for the period, a new first quarter revenue record for the company. Celsius alone was responsible for approximately 47% of the entire energy drink category growth year over year in the first quarter. And as we reported in this morning's press release, Celsius now holds an 11.5 share in Moolah for the four weeks period ending April 14th, according to Zircona. This is a full point higher than the Q4 2023 and four points higher than one year ago. These results on their own are very strong, especially after growing at a triple digit for the past three consecutive years. Even so, our first quarter revenue would have been higher, except that it was adversely affected due to inventory movements by our largest customer, which is beyond our control. The year-over-year inventory variation is attributed to elevated first quarter 2023 restocking, which we believe was meant to compensate for the fourth quarter 2022 destocking and to prepare for a robust spring recess that were planned in 2023. However, no such first quarter restocking and spring reload in was observed this year. Absent these effects, we would have seen a higher growth rate. Ongoing inventory fluctuations may be expected in subsequent quarters because our largest distributor constitutes approximately 62% of our total North America business during the first quarter of 2024. While these inventory fluctuations cause noise in our sequential quarterly revenue figures, what's important to focus on here is that Celsius is constantly on shelves, stock cold, stock high, with a 98.4% ACV. and our category across all tract channels and on tract channels continues to grow. We introduced several new flavor innovations since the beginning of this year, including Galaxy Vibe, which may be our most refreshing and delicious flavor yet, as well as the Celsius Essentials line, which began its national distribution in January and has now achieved a 54.5% ACV and a 5.5 point share increase since we last reported in February. We estimate that retailer spring resets were approximately one-third complete at the end of the quarter and once concluded, we're expecting our best shelf space gains in the company history. The importance of these space gain increases and placements and improvements cannot be overstated. The visual impact of multiple full shelves of cold Celsius in convenience stores and coolers and in the grocery shelves is a powerful in-store billboard and showcases our portfolio. The full effect of these shelf resets is expected to be reflected in the scanner data beginning in July. In March, we launched a new incentive program with Pepsi that further aligns our shared interests within the energy category, including alignment around priorities and delivering a program that will contribute to our long-term goal of becoming the number one energy drink brand in the world. As we prepare for our 100 Days of Summer campaign, we are well positioned with the best in-store presence in company history. the most refreshing products, and some great marketing initiatives, which I'll discuss later in the call. And as just noted, a strong aligned partnership with our North America distribution partner. Celsia's share in MULOC in the most recent four-week data as of April 14th, as stated, was an 11.5 share, an increase of approximately four points compared to the year-ago period. We're pleased with our continued share growth across all track channels. As we shared on our last earnings call, there are 12 major U.S. markets where Celsius maintains a 15-point share or greater. And we are within just a few points of 15 share in several additional markets. With our growth and expansion, we're adding more talented people. And already this year, we've increased our sales and key accounts team by approximately 85%. By the end of this year, we're expecting to have three times as many sales staff compared to this time last year, supporting our growth and the opportunities we see ahead. Our world-class operation teams continue to drive efficiencies to reduce freight and raw material cost savings this quarter, contributing to our highest gross margin to date at 51.2%. Turning to pricing, we have generally maintained flat pricing on a per volume basis across our portfolio, while strategically promoting our new 16 ounce line of Celsius Essentials to drive trial. And a reduced pricing and scanner data reflects Celsius Essentials promotions and the increased mix of variety packs into our overall sales, which come with a lower per ounce cost. We continue to consider strategic pricing and promotional opportunities that allow us to maintain our premium position in the category while maintaining velocity. With that said, we continue to review and monitor both our distribution infrastructure and the commodity environment across the back half of 2024 and into 2025. Celsius new product innovation this year is the best tasting and most refreshing beverages we've ever created. A new favorite here is Celsius Galaxy Vibe, which joins other excellent 2024 additions in our 12-ounce line, including Blue Raspberry Lemonade, Sparkling Raspberry Peach, and Astro Vibe. We are very pleased with the strong retailers supporting our initiatives rolling out our 16-ounce line of Celsius Essentials, which now has reached approximately 54.5% ACV as of mid-April, with availability increasing across the country. Celsius On-The-Go Powders continues to perform well with our recent innovation with a refreshing strawberry coconut and blueberry lemonade being our top two performers. We have more Celsius on the go powder innovation plan for this year and continue to see great opportunities with this line. Non-track channels, including club, e-comm, and food service continue to be tailwinds to our overall growth. Club sales in the first quarter increased 36% to 63 million compared to 46.5 million in the same period in 2023. Sales on Amazon increased 30% year over year to 28 million in the first quarter, up from 21.8 million in the prior period. celsius ended the first quarter with a 20.2 share compared to monster with a 20 share and red bull with a 12.3 share according to stackline 12-week data ending march 30 2024 approximately 12 of celsius sales through pepsi in the quarter was to the food service channel with especially strong sales in restaurants recreation lodging and gaming locations international sales which do not include Canada, increased 42% in the quarter to $16.2 million. Celsius launched in Canada, which began in January, continues to exceed expectations, and we recently achieved a 5.5 share through the first two periods of 2024, according to Nielsen. In the first quarter, Celsius announced plans to expand in Australia, France, Ireland, New Zealand, and United Kingdom, executing our stated strategy to pursue measured international growth, balancing investment levels in new markets. I'm excited to say that as of April, Celsius is now officially available in select gyms and retailers across the United Kingdom and Ireland. Sales in Australia and New Zealand, as well as France, are planned to gradually begin in the fourth quarter of 2024 with phased expansion across the countries in 2025. Finally, we've produced some fantastic marketing activations recently, including Celsius Cosmic Desert event in Coachella, which hosted celebrities and influencers as well as performers by leading artists. Celsius was also featured in a recent Saturday Night Live opening skit, making clear that Celsius is the top of mind functional energy brand in pop culture. And just last weekend, we activated our global partnership with Ferrari at the Formula One Miami Grand Prix. Congratulations to the Ferrari team for their podium finish. I'll now turn the call over to Celsius Chief Financial Officer, Jared Langens, to discuss our first quarter financial results. Jared?