8-K/A: Celsius Amends Filing, Reveals Rockstar Brand Impairment

Celsius Holdings, Inc. filed an amendment to its 8-K, disclosing detailed financial statements for the Rockstar Energy acquisition, including a significant impairment charge on the brand.

Summary

• Celsius Holdings, Inc. filed an 8-K/A to include the consolidated financial statements of Rockstar Energy Drink Assets in the U.S. and Canada, and pro forma financial information related to its acquisition.
• The acquisition of Rockstar Energy Drink assets was completed on August 28, 2025, with PepsiCo, Inc. continuing as the primary distributor.
• Rockstar Energy Drink Assets reported net revenue of $373 million for the fiscal year ended December 28, 2024, a decrease from $380 million in 2023.
• For the 24 weeks ended June 14, 2025, Rockstar's net revenue was $172 million, down from $182 million in the comparable period of 2024.
• A pre-tax impairment charge of $1,539 million was recognized for the Rockstar brand through October 31, 2025, primarily due to lower expectations of future business performance.
• The carrying value of the indefinite-lived intangible asset (Rockstar brand) decreased from $2,076 million as of December 28, 2024, to $547 million as of June 14, 2025, following the impairment.
• Unaudited pro forma combined revenue for Celsius, including Alani Nu and Rockstar, was $1,462,728 thousand for the six months ended June 30, 2025, and $2,316,228 thousand for the year ended December 31, 2024.
• Pro forma combined net income attributable to common stockholders was $174,869 thousand for the six months ended June 30, 2025, and $71,571 thousand for the year ended December 31, 2024.
• The Rockstar acquisition consideration included non-cash elements (Series B Preferred Stock and amended Series A Preferred Stock) and cash from Pepsi related to net working capital adjustments, totaling $307,844 thousand.

Sentiment

Score: 4

Explanation: The sentiment is moderately negative due to the significant impairment charge on the Rockstar brand, indicating underperformance and reduced future expectations for this acquired asset. While the overall pro forma combined financials show growth from the acquisitions, the specific issues with Rockstar are a notable concern. The strategic expansion is positive, but the immediate financial hit on one of the acquired brands weighs heavily.

Positives

• The acquisition of Rockstar Energy Drink assets expands Celsius's brand portfolio and distribution capabilities through PepsiCo.
• Pro forma combined revenue for Celsius, including Alani Nu and Rockstar, shows significant scale at $1,462,728 thousand for the six months ended June 30, 2025, and $2,316,228 thousand for the year ended December 31, 2024.
• Rockstar's Net Revenue less Direct Expenses increased to $58 million in 2024 from $18 million in 2023, driven by lower direct expenses.

Negatives

• Rockstar Energy Drink Assets experienced a decline in net revenue, from $380 million in 2023 to $373 million in 2024, and from $182 million to $172 million for the 24 weeks ended June 15, 2024, and June 14, 2025, respectively.
• A substantial pre-tax impairment charge of $1,539 million was recognized for the Rockstar brand, indicating a significant reduction in its estimated fair value.
• The impairment charge resulted in a net loss of $(1,491) million for Rockstar's Net Revenue less Direct Expenses for the 24 weeks ended June 14, 2025, compared to a positive $34 million in the prior year period.
• The impairment was driven by lower expectations of future business performance for Rockstar compared to previous projections, and the transaction itself.

Risks

• Lower expectations of future business performance for the Rockstar brand could continue to impact its value and contribution to Celsius's results.
• Macroeconomic conditions, including volatile geopolitical conditions, high interest rates, and inflationary cost environments, could adversely affect future sales and operating profit.
• Industry and competitive conditions in the energy drink market pose ongoing challenges to brand performance and market share.
• Significant management judgment is required to estimate future sales, operating profit, and cash flows, and a deterioration in these assumptions could adversely impact results.
• The preliminary nature of purchase accounting estimates means that final valuations of acquired assets and liabilities may differ materially, potentially impacting goodwill and amortization expenses.

Future Outlook

The pro forma financial information is presented for informational purposes only and is based on various adjustments and assumptions. It is not necessarily indicative of what Celsius's consolidated statement of operations or balance sheet would have been had the acquisitions been completed as of the dates indicated, nor is it necessarily indicative of future results. Preliminary purchase accounting estimates are subject to change, and the final allocation of purchase price, goodwill, and amortization may differ materially.

Industry Context

The acquisition of Rockstar Energy Drink assets by Celsius, following its acquisition of Alani Nu, signifies Celsius's aggressive expansion strategy within the highly competitive energy drink market. The significant impairment charge on the Rockstar brand, however, suggests that the brand's performance and future prospects, as assessed by PepsiCo prior to the acquisition, were below initial expectations or deteriorated rapidly, highlighting the challenges of integrating and revitalizing established brands in a dynamic consumer landscape. The continued distribution partnership with PepsiCo is a key strategic element, leveraging an established network.

Related Party Transactions

• Rockstar manufactured finished goods for sale to PepsiCo Beverages North America's (PBNA) direct-store-delivery distribution function.
• Related party sales to PepsiCo were $236 million for the year ended December 28, 2024, and $245 million for the year ended December 30, 2023.
• Related party sales to PepsiCo were $105 million for the 24 weeks ended June 14, 2025, and $117 million for the 24 weeks ended June 15, 2024.

Stakeholder Impact

• Shareholders: The significant impairment charge on the Rockstar brand could raise concerns about the valuation and integration success of recent acquisitions, potentially impacting investor confidence. However, the overall pro forma growth from the combined acquisitions may offer a long-term positive outlook.
• Customers: The acquisition and continued distribution by PepsiCo aim to ensure continued availability and potentially expanded reach for Rockstar products.
• Employees: The acquisition included certain marketing employees from Rockstar, indicating integration into Celsius's workforce.

Next Steps

• Celsius will continue to finalize and review the estimated useful lives of intangible assets and the estimated fair values of assets acquired and liabilities assumed for both the Alani Nu and Rockstar acquisitions.
• The company will integrate the operations of Celsius, Alani Nu, and Rockstar, aiming to achieve anticipated synergies, operating efficiencies, and cost savings.

Key Dates

Keywords

Celsius Holdings, Rockstar Energy, Acquisition, SEC Filing, 8-K/A, Financial Statements, Impairment Charge, Energy Drink Market, Pro Forma Financials, Intangible Assets, Corporate Governance, PepsiCo, Alani Nu