Celsius Holdings, Inc.

Thank you for standing by. My name is JL and I will be your conference operator today. At this time, I would like to welcome everyone to the Celsius Holdings Third Quarter 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, simply press star one again. I would now like to turn the conference over to Paul Wiseman, Senior Vice President of Investor Relations. Please go ahead, sir.

Good morning, and thank you for joining Celsius Holdings' third quarter 2024 earnings webcast. With me today are John Fieldley, Chairman and CEO, Jared Langens, Chief Financial Officer, and Toby David, Chief of Staff. We'll take questions following the prepared remarks. Our Q3 earnings press release was issued this morning with all materials available on our website, ir.seltysholdingsinc.com, and on the SEC's site, sec.gov. An audio replay of this webcast will also be accessible later today. Today's discussion includes forward-looking statements based on current expectations and information. These statements involve risks and uncertainties, many beyond the company's control. Celsius Holdings disclaims any duty to update forward-looking statements except as required by law. Please review our safe harbor statements and risk factors in today's press release and in our quarterly filings with the SEC for additional information, which contain a description of risks that may result in actual results differing materially from those contemplated by our forward-looking statements. We will present results on both the GAAP and non-GAAP basis. Non-GAAP measures like adjusted EBITDA and adjusted EBITDA margin and their GAAP reconciliations are detailed in our Q3 earnings release, and non-GAAP financial measures should not be used as a substitute for our results reported in accordance with GAAP. With that, I'll turn it over to our CEO, John Fieldley.

Thank you, Paul. Good morning, everyone. Celsius reported its third quarter financial results today, revealing continued consumer demand growth and revenue, which was broadly in line with expectations we set during the quarter. Celsius retail sales in the quarter ended September 30th, increased 7.1% year-over-year on unit sales increase of 7.3%. Celsius resilient growth at retail overcame softness in the category, which grew at 2% in the same period. Once again, Celsius was a significant driver of the overall energy category, contributing more than 16% of all growth. Total revenue for the third quarter was $265.7 million, a decrease from last year, primarily attributed to distributor inventory optimization, which Jared will discuss in greater detail on this call. Year-to-date revenue through September 30th was $1.02 billion, an increase of 5% from last year. The sell-through data we are seeing continues to be supportive of us being the largest driver of the energy category. I want to reiterate our three key growth drivers that we are focused on for the rest of the year and beyond. Attracting new consumers into the energy category, expanding a product availability, and increasing consumption frequency. We believe that we're making progress across each of these initiatives will help us pursue our vision of becoming the leading energy drink brand. Let me share more details on how we're thinking about each. First, we are continuing to bring new consumers into the energy drink category through premium marketing and innovation around better-for-you, great-tasting energy. Celsius continues to deliver innovative flavors that resonate with consumers, such as our new on-the-go powders in our Vibe line and RTDs, like sparkling watermelon, lemonade, and cherry cola, which we're taking nationwide due to strong consumer demand. Two recently announced Celsius essential flavors, grape, slush, and watermelon ice, alongside our new 2025 vibe and core line innovation previewed at the convenience store trade show next, keeping consumer excitement and category trial high. We believe that Celsius continues to outperform on taste, function, and our brand association with the live fit lifestyle. That brings new consumers into the energy drink category through our marketing. Second, in terms of expanding product availability, based on recent industry surveys, we expect energy will continue to gain shelf space in the beverage coolers and aisles, with Celsius being a strong beneficiary of these gains. This validates positive customer conversations we had last month at NACS. Domestically, Celsius market share has been resilient with our share in MULO Plus with convenience in the last four weeks ending October 6th rising to 11.6%, an increase of 10 basis points from this time last year. We are focused on re-accelerating our share growth. We believe that our incentive program with Pepsi, featuring priority periods and aligned resources, should provide additional tailwinds for us going forward. Turning to other channels that are expanding our availability, approximately 12.3% of Celsius total North America sales to PepsiCo in the quarter was to the food service channel, with strong results in workplace, restaurant, recreational, lodging, and gaming sales. Lodging and restaurant points of distribution were up 46% and 27% respectively compared to last year. Celsius sales to Amazon increased 21% year over year to $27 million, up from $22.2 million in the prior year period. Celsius ended Q3 with a 20.4% share on Amazon. According to Stackline, last 14-week read ending October 5th, 2024. Ecom continues to be a great opportunity for us building brand awareness and making our product accessible to consumers whenever and wherever they want it. Sales to Costco in the third quarter of 2024 increased 15%. However, sales to Sam's Club, BJ's were negatively affected due to timing of promotions and innovation load-in and the year ago period. The total club channel sales decreased 4% to 60.5 million in the third quarter 2024 from 63.2 million for the prior year period. Our expansion is broader than just North America. In October, we launched in Australia and New Zealand. Our third growth driver is increasing consumption frequency. Celsius expanded energy drink consumption occasions with refreshing flavors and our aspirational live fit lifestyle. Celsius continues to grow our presence in incremental consumption occasions like mealtime through our partnerships with leading convenience stores and quick serve restaurants like Jersey Mike's. We're supporting our growth drivers by investing behind the brand, but also in our organizational excellence, scaling operations, advancing technology, and developing our people. Last week, we acquired Big Beverage, a long-term Celsius co-packer, which is intended to give us new innovation capabilities, greater control of our supply chain, in addition to financial benefits that we believe will be achieved in the near and long term. We believe that vertical integration, like this co-packer acquisition, is a capital-efficient growth driver and another way we are investing in our long-term vision to become the leading energy drink brand in the United States. We've also recently established a new center of excellence in Ireland intended to drive our innovation global procurement supply chain and global marketing forward as we expand further across the US and into new global markets. Our field sales key accounts team have begun using AI assisted selling tools, as well as a new mobile technology that optimizes vehicle routes for further efficient selling and relationship management. We are also investing in new technologies to improve efficiencies in our orbit model and reduce our freight lane costs. Importantly, we welcome two new additions to our already strong board of directors, Hans Mellet and Israel Konarvalsky. These professionals bring extended global experience in consumer goods than our prior and present leadership roles at Starbucks, Johnson & Johnson, and PepsiCo. Israel replaces Jim Lee, who departed our board in conjunction with his move from Pepsi to Target. We thank Jim for his service and we wish him best of luck in his new CFO role. Our customers continue to believe as we do that Celsius is a winning brand with a long growth pathway ahead of us. We are investing for long-term sustainable growth with strategies to energize our customers in more places more often. These three growth drivers are underpinned by our focus on organizational excellence across people, technology, and scale. With that, I'll turn the call over to our Chief Financial Officer, Jared Langens, to discuss our third quarter results. Jared?