Celsius Holdings, Inc.

Previous wording

•The increased ownership stake and additional Board representation by Pepsi may allow it to exert greater influence over our strategic and governance decisions;

Current wording

•The ownership stake and Board representation by Pepsi may allow it to exert influence over our strategic and governance decisions;

Previous wording

Forward-looking statements and information involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied in or reasonably inferred from, such statements, including without limitation, the risks and uncertainties disclosed or referenced in Part I, Item 1A Risk Factorsand Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operationsof our Annual Report. Therefore, caution should be taken not to place undue reliance on any such forward-looking statements. Much of the information in this Quarterly Report that looks toward future performance is based on various factors and important assumptions about future events that may or may not actually occur. As a result, our operations and financial results in the future could differ materially and substantially from those we have discussed in the forward-looking statements included in this Quarterly Report. We assume no obligation (and specifically disclaim any such obligation) to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

Current wording

Forward-looking statements and information involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied in or reasonably inferred from, such statements, including without limitation, the risks and uncertainties disclosed or referenced in Part I, Item 1A Risk Factorsand Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operationsof our Annual Report. Therefore, caution should be taken not to place undue reliance on any such forward-looking statements. Forward-looking statements may be based on various factors and important assumptions about future events that may or may not actually occur. As a result, our operations and financial results in the future could differ materially and substantially from those we have discussed in the forward-looking statements included in this Quarterly Report. We assume no obligation (and specifically disclaim any such obligation) to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

Previous wording

Celsius is a functional energy drink company operating in the U.S. and internationally. Our portfolio consists of three brands: CELSIUS®, our core functional energy brand; Alani Nu®, a wellness-focused energy and nutrition brand acquired in April 2025; and Rockstar®, an established energy brand with a strong heritage, acquired in August 2025. Together, these brands form a differentiated, multi-brand platform designed to serve distinct consumers, occasions and energy needs, supporting functional performance, better-for-you formulations and active lifestyles.

Current wording

Celsius is a functional energy drink company operating in the U.S. and internationally. Our portfolio consists of three brands: CELSIUS®, our core functional energy brand; Alani Nu®, a wellness-focused energy and nutrition brand, acquired in April 2025; and Rockstar Energy®, an established energy brand with a strong heritage, acquired in August 2025. Together, these brands form a differentiated, multi-brand platform designed to serve distinct consumers, occasions and energy needs, supporting functional performance and active lifestyles.

Previous wording

CELSIUS® is a functional energy brand offering products across a range of formats, including ready-to-drink, on-the-go powder and hydration, designed to support active and wellness-oriented lifestyles for consumers who are 18 years and older. Our products are widely available throughout the U.S. and in select Canadian territories across a broad range of retail outlets, including grocery stores, natural product stores, convenience stores, fitness centers, mass retailers, vitamin specialty stores and through e-commerce platforms. Moreover, our products are offered in select markets in Europe, the Middle East and the Asia-Pacific region as we have continued to expand our global presence.

Current wording

CELSIUS® is a functional energy brand offering products across a range of formats, including ready-to-drink, on-the-go powder and hydration, designed to support active and wellness-oriented lifestyles for consumers who are 18 years and older. Our products are widely available throughout the U.S. and Canada across a broad range of retail outlets, including grocery stores, natural product stores, convenience stores, fitness centers, mass retailers, vitamin specialty stores and e-commerce platforms. Additionally, our products are offered in select markets in Europe, the Middle East and the Asia-Pacific region as we have continued to expand our global presence.

Previous wording

Rockstar Energy strengthens our total energy portfolio by adding both full-sugar and zero-sugar offerings that complement our existing brands. With established brand equity, Rockstar enhances our ability to serve core energy consumers who are 18 years and older.

Current wording

Rockstar strengthens our total energy portfolio by adding both full-sugar and zero-sugar offerings that complement our existing brands. With established brand equity, Rockstar enhances our ability to serve core energy consumers who are 18 years and older.

Previous wording

We engage in developing, manufacturing, processing, marketing, selling and distributing Celsius, Alani Nu and Rockstar products. Our operational model strategically relies primarily on co-packers for the manufacture and supply of our products, leveraging their specialized expertise and scalable production capabilities. Additionally, we utilize our in-house manufacturing facility to complement our strategic use of co-packers. This approach allows us to maintain flexibility in responding to market demands and to focus our resources on innovation, marketing and expanding our distribution channels. We continuously assess and work to optimize our supply chain to ensure quality, consistency and timely delivery to our customers.

Current wording

We engage in developing, manufacturing, processing, marketing, selling and distributing Celsius, Alani Nu and Rockstar products. Our operational model strategically relies primarily on co-packers for the manufacture and supply of our products, leveraging their specialized expertise and scalable production capabilities. Additionally, we utilize our in-house manufacturing facility to complement our strategic use of co-packers. This approach allows us to maintain flexibility in responding to market demands and to focus our resources on innovation, marketing and expanding our distribution channels. We continuously assess and optimize our supply chain to support product quality, consistency and timely delivery to our customers.

Previous wording

On May 21, 2026, the Company entered into the Channel Transition Amendment, which transferred additional territory rights of certain former Alani Nu distributors to Pepsi. Pepsi agreed to reimburse the Company for related distributor termination fees of $81.1 million, with amounts received by the Company from Pepsi contractually restricted for use solely to satisfy the related termination obligations. The additional territories being distributed by Pepsi are subject to the terms and conditions of the A&R Distribution Agreements. As of June 30, 2026, the Company had received the entire $81.1 million from Pepsi and had utilized substantially all of it under the Channel Transition Amendment.

Current wording

On May 21, 2026, the Company entered into the Channel Transition Amendment, which transferred additional territory rights of certain former Alani Nu distributors to Pepsi. Pepsi agreed to reimburse the Company for related distributor termination fees of $81.1 million, with amounts received by the Company from Pepsi contractually restricted for use solely to satisfy the related termination obligations. The additional territories being distributed by Pepsi are subject to the terms and conditions of the A&R Distribution Agreements. As of September 30, 2026, the Company had received and utilized the entire $81.1 million from Pepsi under the Channel Transition Amendment.

Previous wording

The imposition of tariffs, including U.S. tariffs imposed or threatened to be imposed on other countries and any tariffs imposed by such countries, have impacted and could continue to impact our supply chain, including the cost of certain raw materials and packaging, including aluminum. In February 2026, the U.S. Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act were unlawful, and those duties were subsequently terminated. While this may present a potential refund opportunity, the pathway and timing of any such refunds remain uncertain. The current administration has since imposed alternative tariffs under other statutory authority, and we continue to monitor developments. Any supply chain constraints, inflationary impacts, or reduced consumer demand as a result of such tariffs or ongoing macroeconomic uncertainty could impact our results.

Current wording

The imposition of tariffs, including U.S. tariffs imposed or threatened to be imposed on other countries and any tariffs imposed by such countries, have impacted and could continue to impact our supply chain, including the cost of certain raw materials and packaging, including aluminum. In February 2026, the U.S. Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act were unlawful, and those duties were subsequently terminated. As a result, we have begun to receive refunds of previously paid duties; the ultimate amount and timing of additional refunds, if any, remain uncertain and subject to ongoing legal, regulatory, and administrative developments. The current administration has since imposed alternative tariffs under other statutory authority, and we continue to monitor developments. Any supply chain constraints, inflationary impacts or reduced consumer demand as a result of such tariffs or ongoing macroeconomic uncertainty could impact our results.

Previous wording

For the three months ended June 30, 2026, revenue was approximately $817.9 million, an increase of $78.6 million or 10.6%, from $739.3 million for the three months ended June 30, 2025. Revenue in North America was approximately $790.7 million, representing 96.7% of total revenue for the three months ended June 30, 2026. International revenue was $27.2 million, an increase of 9.8% from the prior year period. Our international markets have continued to expand, driven by new market launches and continued investment in distribution, marketing and strategic partnerships to support long-term growth.

Current wording

For the three months ended September 30, 2026, revenue was approximately $847.2 million, an increase of $122.1 million or 16.8%, from $725.1 million for the three months ended September 30, 2025. Revenue in North America was approximately $806.2 million, representing 95.2% of total revenue for the three months ended September 30, 2026. International revenue was $41.0 million, an increase of 77.5% from the prior year period. Our international markets have continued to expand, driven by new market launches and continued investment in distribution, marketing and strategic partnerships to support long-term growth.

Previous wording

For the three months ended June 30, 2026, revenue attributable to the Alani Nu brand was approximately $364.4 million, compared to $301.2 million for the three months ended June 30, 2025, an increase of $63.2 million, or 21.0%. This increase was primarily driven by strong demand, successful innovation and distribution expansion, partially offset by discontinued non-core SKUs and an increase in promotional activity as a percentage of revenue.

Current wording

For the three months ended September 30, 2026, revenue attributable to the Alani Nu brand was approximately $410.1 million, compared to $332.0 million for the three months ended September 30, 2025, an increase of $78.1 million, or 23.5%. This increase was primarily driven by strong consumer demand, successful innovation and distribution expansion, partially offset by an increase in promotional activity as a percentage of revenue.

Previous wording

For the six months ended June 30, 2026, gross profit increased by $218.5 million to $771.8 million, an increase of 39.5%, from $553.2 million for the six months ended June 30, 2025. Gross profit margin decreased to 48.2% for the six months ended June 30, 2026 from 51.8% for the six months ended June 30, 2025. The decrease in gross profit margin was primarily driven by higher promotional and incentive activity as a percentage of revenue and channel mix. This decrease was partially offset by ongoing improvements from our integration of acquired businesses and the absence of inventory step-up expense in 2026 related to the Alani Nu Acquisition.

Current wording

For the three months ended September 30, 2026, gross profit increased by $24.0 million to $396.3 million, an increase of 6.4%, from $372.3 million for the three months ended September 30, 2025. Gross profit margin decreased to 46.8% for the three months ended September 30, 2026 from 51.3% for the three months ended September 30, 2025. The decrease in gross profit margin was primarily driven by channel mix, including a higher mix of DSD sales, and increased commodity costs, primarily aluminum and fuel.

Previous wording

For the three months ended June 30, 2026, we recorded $80.9 million of distributor termination fees related to the termination of certain former Alani Nu distributors primarily in connection with the Channel Transition Amendment. There were no comparable expenses during the three months ended June 30, 2025.

Current wording

For the three months ended September 30, 2026, we recorded $3.5 million of distributor termination fees related to the termination of certain former Alani Nu distributors primarily in connection with the Channel Transition Amendment. This compares to $246.7 million recorded for the three months ended September 30, 2025, related to the termination of certain former Alani Nu distributors under the A&R U.S. Distribution Agreement.

Previous wording

Total other expense was $7.2 million for the six months ended June 30, 2026, compared to total other expense of $4.5 million for the six months ended June 30, 2025, reflecting an expense increase of $2.6 million. The changes in total other expense were primarily driven by an increase in interest expense related to our outstanding debt, reflecting a full six months of interest expense for the current-year period whereas the prior year period included material outstanding debt only in the second quarter of 2025, as well as a decrease in interest income as a result of lower average cash balances. These changes were partially offset by a $7.8 million increase in other income, net, primarily reflecting sales of Rockstar products for which we acted as an agent under a transition services agreement during the six months ended June 30, 2026. This arrangement is transitional in nature, with no comparable activity in the prior-year period.

Current wording

Total other expense, net was $9.0 million for the three months ended September 30, 2026, compared to total other expense, net of $8.0 million for the three months ended September 30, 2025, reflecting an increase in other expense of $1.0 million. This increase was primarily driven by lower other income from sales of Rockstar products for which we acted as an agent under a transition services agreement immediately following the Pepsi Transactions as well as a loss on debt extinguishment in connection with our refinancing of the Term Loan Facility. This increase in expense was partially offset by a decrease in interest expense due to a lower interest rate and our partial debt repayment in 2025.

Previous wording

The effective income tax rate for the six months ended June 30, 2026 was 20.1% compared to 24.2% in the comparable prior year period. The decrease in the effective tax rate was due primarily to increased income in tax jurisdictions with lower tax rates than the U.S. and permanent differences related to stock compensation. The effective tax rate for the six months ended June 30, 2026 varied from the U.S. statutory rate due primarily to the jurisdictional mix of earnings and permanent tax differences related to stock compensation.

Current wording

Income tax expense was $36.1 million on pre-tax income of $163.1 million for the three months ended September 30, 2026, as compared to income tax benefit of $27.0 million on pre-tax loss of $88.0 million in the comparable prior year period. The effective income tax rate for the three months ended September 30, 2026 was 22.1% compared to 30.7% in the comparable prior year period. The higher effective tax rate in the prior period was due primarily to a pre-tax loss in 2025 related to U.S. distributor termination expenses despite positive income in lower-taxed foreign jurisdictions. The effective tax rate for the three months ended September 30, 2026 varied from the U.S. statutory rate due primarily to the jurisdictional mix of earnings and permanent tax differences related to stock compensation.

Previous wording

Net income attributable to common stockholders for the six months ended June 30, 2026 was $121.4 million, representing basic EPS of $0.47 based on a basic weighted average of 255.9 million shares outstanding. In comparison, for the six months ended June 30, 2025, net income attributable to common stockholders was $119.9 million, representing basic EPS of $0.49 based on a weighted average of 246.5 million shares outstanding. Diluted EPS was $0.47 and $0.48 for the six months ended June 30, 2026 and 2025, respectively.

Current wording

Net income (loss) attributable to common stockholders for the three months ended September 30, 2026, was $99.5 million, representing basic EPS of $0.39 based on a weighted average of 252.7 million shares outstanding. In comparison, for the three months ended September 30, 2025, net loss attributable to common stockholders was $70.7 million, representing basic loss per share of $(0.27) based on a weighted average of 257.8 million shares outstanding. Diluted earnings (loss) per share was $0.39 and $(0.27) for the three months ended September 30, 2026 and 2025, respectively.

Previous wording

The decrease in net income attributable to common stockholders for the three months ended June 30, 2026 was primarily driven by distributor termination fees related to the termination of certain former Alani Nu distributors and by dividends on our Series B Preferred Stock, which was not outstanding in the prior year period. This impact was partially offset by the increase in revenue and gross profit. Other factors contributing to the trends driving net income and EPS are discussed earlier in this section.

Current wording

The change in net income (loss) attributable to common stockholders for the three months ended September 30, 2026, compared to the prior year period, was primarily driven by the significant decrease in distributor termination fees related to certain former Alani Nu distributors. This favorable impact was partially offset by higher income tax expense and higher dividends on Series B Preferred Stock as well as income allocated to Preferred Stock. Other factors contributing to the trends driving net income and EPS are discussed above.

Previous wording

For the six months ended June 30, 2026, revenue was approximately $1,600.5 million, an increase of $532.0 million, or 49.8%, from $1,068.5 million for the six months ended June 30, 2025. Revenue in North America was approximately $1,538.0 million, representing 96.1% of total revenue for the six months ended June 30, 2026. International revenue was $62.5 million an increase of 31.5% from the prior year period. Our international markets have continued to expand, driven by new market launches and continued investment in distribution, marketing and strategic partnerships to support long-term growth.

Current wording

For the nine months ended September 30, 2026, revenue was approximately $2,447.8 million, an increase of $654.2 million, or 36.5%, from $1,793.6 million for the nine months ended September 30, 2025. Revenue in North America was approximately $2,344.2 million, representing 95.8% of total revenue for the nine months ended September 30, 2026. International revenue was $103.6 million, an increase of 46.6% from the prior year period. Our international markets have continued to expand, driven by new market launches and continued investment in distribution, marketing and strategic partnerships to support long-term growth.

Previous wording

For the three months ended June 30, 2026, revenue attributable to the Celsius brand was approximately $387.0 million, compared to $438.1 million for the three months ended June 30, 2025, a decrease of $51.1 million, or 11.7%. This decrease was primarily driven by increased trade and promotional investment as a percentage of revenue, shipment timing related to inventory rebalancing, softness in the club channel and a planned moderation in innovation activity, as well as SKU optimization initiatives implemented in conjunction with the integration of our acquisitions and Alani Nu’s distribution transition. The optimization actions resulted in an initial reduction in average SKUs ahead of anticipated space gains.

Current wording

For the nine months ended September 30, 2026, revenue attributable to the Celsius brand was approximately $1,091.7 million, compared to $1,148.3 million for the nine months ended September 30, 2025, a decrease of $56.6 million, or 4.9%. The revenue decrease is primarily related to a planned moderation in innovation activity as well as SKU optimization initiatives implemented in conjunction with the integration of our acquisitions and Alani Nu’s distribution transition. The decrease was further driven by a decline in order volume from our largest distributor related to inventory rebalancing, increased trade and promotional investment as a percentage of revenue and softness in the club channel.

Previous wording

For the six months ended June 30, 2026, revenue attributable to the Alani Nu brand was approximately$732.4 million, compared to $301.2 million for the six months ended June 30, 2025, an increase of $431.3 million, or 143.2%. This increase was primarily attributable to the inclusion of a full six months of Alani Nu revenue in the current-year period, as compared to one quarter of revenue in the prior-year period following the Alani Nu Acquisition on April 1, 2025. Alani Nu benefited from strong demand and successful innovation as well as distribution expansion, partially offset by discontinued non-core SKUs, and an increase in promotional activity as a percentage of revenue.

Current wording

For the nine months ended September 30, 2026, revenue attributable to the Alani Nu brand was approximately $1,142.6 million, compared to $633.2 million for the nine months ended September 30, 2025, an increase of $509.4 million, or 80.4%. This increase was primarily attributable to the inclusion of a full nine months of Alani Nu revenue in the current year period, as compared to two quarters of revenue in the prior year period following our completion of the Alani Nu Acquisition on April 1, 2025. Alani Nu further benefited from strong consumer demand and successful innovation as well as distribution expansion, partially offset by discontinued non-core SKUs and channel mix, including a higher mix of DSD sales.

Previous wording

For the three months ended June 30, 2026, gross profit increased by $12.8 million to $393.7 million, an increase of 3.4%, from $380.9 million for the three months ended June 30, 2025. Gross profit margin decreased to 48.1% for the three months ended June 30, 2026 from 51.5% for the three months ended June 30, 2025. The decrease in gross profit margin was primarily driven by higher promotional and incentive activity as a percentage of revenue and channel mix. This decrease was partially offset by ongoing improvements from our integration of acquired businesses and the absence of inventory step-up expense in 2026 related to the Alani Nu Acquisition.

Current wording

For the nine months ended September 30, 2026, gross profit increased by $242.5 million to $1,168.0 million, an increase of 26.2%, from $925.5 million for the nine months ended September 30, 2025. Gross profit margin decreased to 47.7% for the nine months ended September 30, 2026, from 51.6% for the nine months ended September 30, 2025. The decrease in gross profit margin was primarily driven by higher promotional and incentive activity as a percentage of revenue, channel mix, including a higher mix of DSD sales, and increased commodity costs, primarily aluminum and fuel. This decrease was partially offset by ongoing improvements from our integration of acquired businesses and other raw material savings.

Previous wording

Selling, general and administrative expenses for the six months ended June 30, 2026 were $472.2 million, an increase of $114.0 million, or 31.8%, from $358.2 million for the six months ended June 30, 2025. The increase was primarily driven by incremental costs associated with the expansion of our portfolio from one brand to three brands, including increased investment in brand awareness and marketing initiatives, higher employee and professional service costs and other expenses associated with supporting and marketing three brands. The current period also reflected charges of $25.5 million related to an ongoing legal matter. These increases were partially offset by a decrease in deal and transaction costs that were higher in the prior year in connection with completing the Alani Nu Acquisition and the prior year remeasurement of contingent consideration related to the Alani Nu Acquisition.

Current wording

Selling, general and administrative expenses for the nine months ended September 30, 2026, were $692.9 million, an increase of $129.1 million, or 22.9%, from $563.8 million for the nine months ended September 30, 2025. The increase was primarily driven by incremental costs associated with the expansion of our portfolio from one brand to three brands, including increased investment in brand awareness and marketing initiatives, higher employee and professional service costs and other expenses associated with supporting and marketing three brands. The current period also reflected charges of $25.5 million related to the Strong Arm Productions legal matter, which has since been settled. These increases were partially offset by a decrease in deal, transaction and integration costs that were higher in the prior year in connection with completing the Alani Nu Acquisition and the Pepsi Transactions.

Previous wording

The effective income tax rate for the three months ended June 30, 2026 was 20.5% compared to 22.9% in the comparable prior year period. The decrease in the effective tax rate was due primarily to increased income in tax jurisdictions with lower tax rates than the U.S. and permanent differences related to stock compensation. The effective tax rate for the three months ended June 30, 2026 varied from the U.S. statutory rate due primarily to the jurisdictional mix of earnings and permanent tax differences related to stock compensation.

Current wording

Income tax expense was $77.8 million on pre-tax income of $370.1 million for the nine months ended September 30, 2026, as compared to income tax expense of $19.2 million on pre-tax income of $102.4 million in the comparable prior year period. The effective income tax rate for the nine months ended September 30, 2026 was 21.0% compared to 18.7% in the comparable prior year period. The lower effective tax rate for the prior period was due primarily to a favorable earnings mix in 2025 related to U.S. distributor termination expenses and permanent differences related to stock compensation. The effective tax rate for the nine months ended September 30, 2026 varied from the U.S. statutory rate due primarily to the jurisdictional mix of earnings and permanent tax differences related to stock compensation.

Previous wording

Net income attributable to common stockholders for the three months ended June 30, 2026 was $36.4 million, representing basic EPS of $0.14 based on a basic weighted average of 254.8 million shares outstanding. In comparison, for the three months ended June 30, 2025, net income attributable to common stockholders was $85.7 million, representing basic EPS of $0.33 based on a weighted average of 257.8 million shares outstanding. Diluted EPS was $0.14 and $0.33 for the three months ended June 30, 2026 and 2025, respectively.

Current wording

Net income (loss) attributable to common stockholders for the nine months ended September 30, 2026, was $221.0 million, representing basic EPS of $0.87 based on a weighted average of 254.8 million shares outstanding. In comparison, for the nine months ended September 30, 2025, net income attributable to common stockholders was $54.7 million, representing basic EPS of $0.22 based on a weighted average of 250.3 million shares outstanding. Diluted EPS was $0.86 and $0.22 for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

The increase in net income attributable to common stockholders for the six months ended June 30, 2026 was primarily driven by higher revenue and gross profit resulting from the inclusion of a full six months of operations for all three brands, compared with the prior-year period, which included only one quarter of Alani Nu and no Rockstar operations. This increase was partially offset by distributor termination fees related to the termination of certain former Alani Nu distributors, increased costs related to an ongoing legal matter and by dividends on our Series B Preferred Stock, which was not outstanding in the prior year period. Other factors contributing to the trends driving net income and EPS are discussed earlier in this section.

Current wording

The increase in net income (loss) attributable to common stockholders for the nine months ended September 30, 2026, was primarily driven by lower distributor termination fees compared to the prior-year period and by higher revenue and gross profit resulting from the inclusion of a full nine months of operations for all three brands, as compared to the prior year period, which included only two quarters of Alani Nu and a partial quarter of Rockstar operations. This increase in net income (loss) attributable to common stockholders was partially offset by increased costs related to the Strong Arm Productions legal matter, which has now been settled, and by dividends on our Series B Preferred Stock, which was not outstanding for the majority of the prior-year period. Other factors contributing to the trends driving net income and EPS are discussed above.

Previous wording

As of June 30, 2026, we had unrestricted cash and cash equivalents of approximately $631.2 million and net working capital of $832.3 million.

Current wording

As of September 30, 2026, we had unrestricted cash and cash equivalents of approximately $700.6 million and net working capital of $928.6 million.

Previous wording

Our primary sources of liquidity are cash flows from operations, our existing cash balances and, if needed, our $100.0 million Revolving Credit Facility. Our principal uses of cash are expected to include purchases of inventories, funding increases in accounts receivable and other assets, capital expenditures, payments of accounts payable, income taxes, dividends paid on our Preferred Stock and required debt service costs. We may also use cash for stock repurchases and other strategic or contractual obligations.

Current wording

Our primary sources of liquidity are cash flows from operations, our existing cash balances and, if needed, our $100.0 million Revolving Credit Facility. Our principal uses of cash are expected to include purchases of inventory, capital expenditures, payments of accounts payable, income taxes, dividends paid on our Preferred Stock, required debt service costs and stock repurchases. We may also use cash for other strategic or contractual obligations.

Previous wording

On July 15, 2026, subsequent to the end of the reporting period, we entered into the Second Refinancing Amendment, which amended the Credit Agreement to reduce the applicable interest rate under the Term Loan Facility by 0.25%, with a potential additional reduction of 0.25% should the Company achieve certain public corporate or corporate family ratings on an ongoing basis. All other material terms of the Credit Agreement, including the applicable interest rate with respect to the Revolving Credit Facility, remain unchanged. In connection with the Second Refinancing Amendment, the Company repaid the remaining outstanding balance of the $694.8 million Term Loan Facility using all of the proceeds from a new $694.8 million term loan under the Term Loan Facility, which bears interest at the reduced interest rate provided by the Second Refinancing Amendment. No prepayment penalties were incurred in connection with the refinancing. The refinancing is expected to reduce the Company’s borrowing costs and further enhance its financial flexibility.

Current wording

On July 15, 2026, we entered into the Second Refinancing Amendment, which amended the Credit Agreement to reduce the applicable interest rate under the Term Loan Facility by 0.25%, with a potential additional reduction of 0.25% should the Company achieve certain public corporate or corporate family ratings on an ongoing basis. All other material terms of the Credit Agreement, including the applicable interest rate with respect to the Revolving Credit Facility, remained unchanged. The refinancing was structured as a new term loan with a principal amount of $694.8 million, equal to the remaining outstanding balance of the term loan prior to the refinancing, bearing interest at the reduced rate provided under the Second Refinancing Amendment. No prepayment penalties were incurred in connection with the refinancing. The refinancing is expected to reduce the Company’s borrowing costs and further enhance its financial flexibility.

Previous wording

Cash flows for the six months ended June 30, 2026 and 2025

Current wording

Cash flows for the nine months ended September 30, 2026 and 2025

Previous wording

Cash provided by operating activities totaled $296.3 million for the six months ended June 30, 2026 compared to $147.1 million cash provided by operating activities for the six months ended June 30, 2025. The $149.2 million increase in operating cash flows primarily reflects higher revenue and gross profit resulting from the inclusion of a full six months of operations for all three brands, compared with the prior-year period, which included only one quarter of Alani Nu and no Rockstar operations. Operating cash flows also benefited from improved customer collections following the completion of the Alani Nu and Rockstar integrations and the resulting reduction in accounts receivables, net, as well as higher accrued promotional allowance and accounts payable, primarily reflecting the timing of payments. These increases were partially offset by the net cash effects of distributor termination activity under the A&R Distribution Agreement. The Company received $64.2 million from Pepsi during the six months ended June 30, 2026 related to a receivable recognized as of December 31, 2025, and utilized this amount together with $141.1 million of restricted cash on hand from Pepsi since December 31, 2025 along with the Company's own cash, to fund the settlement of accrued distributor termination fees. Additionally, an $81.9 million increase in inventory, reflecting increased investment to support anticipated demand, including for limited-time offerings, negatively impacted cash flows for the period.

Current wording

Cash provided by operating activities totaled $450.2 million for the nine months ended September 30, 2026 compared to $478.9 million cash provided by operating activities for the nine months ended September 30, 2025, a $28.7 million decrease. The decrease was primarily due to the net cash effects of distributor termination activity under the A&R U.S. Distribution Agreement. During the nine months ended September 30, 2026, the Company received $64.2 million in cash from Pepsi related to a receivable recognized as of December 31, 2025. The Company used this amount, together with $141.1 million of restricted cash held since December 31, 2025 and its own cash, to fund the settlement of accrued distributor termination fees. The decrease in cash provided by operating activities also reflects the $60.0 million payment made during the third quarter of 2026 for the initial installment under the Strong Arm Productions litigation settlement (see Note 15. Commitments and Contingencies in the notes to our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report), as well as investments in increased inventory levels to support anticipated demand, including demand for limited-time offerings. These increased cash outflows were partially offset by cash inflows from higher revenue resulting from the inclusion of a full nine months of operations for all three brands, as compared to the prior year period, which included two quarters of Alani Nu operations and only a partial quarter of Rockstar operations. The decrease in cash provided by operating activities was also partially offset by improved customer collections and an increase in accrued promotional allowances.

Previous wording

Cash used in investing activities totaled $24.7 million for the six months ended June 30, 2026, compared to cash used in investing activities of $1,276.5 million for the six months ended June 30, 2025, a decrease of $1,251.8 million. The decrease was primarily attributable to the absence of acquisition activity in the current-year period. Cash used in investing activities during the current-year period primarily related to purchases of property, plant and equipment.

Current wording

Cash used in investing activities totaled $51.0 million for the nine months ended September 30, 2026, compared to cash used in investing activities of $1,278.7 million for the nine months ended September 30, 2025, a decrease of $1,227.7 million. The decrease was primarily attributable to the absence of acquisition activity in the current-year period. Cash used in investing activities during the current year period primarily related to purchases of property, plant and equipment.

Previous wording

Cash used in financing activities totaled $176.4 million for the six months ended June 30, 2026, compared to $852.3 million cash provided by financing activities for the same period in 2025, representing a $1,028.7 million decrease. The decrease was primarily attributable to $900.0 million of proceeds from the Term Loan Facility received during the six months ended June 30, 2025 in connection with the Alani Nu Acquisition, with no comparable proceeds in the current-year period. The decrease was further driven by Common Stock repurchases under our share repurchase program of $124.4 million, as well as $14.5 million of dividends paid on Series B Preferred Stock and an $11.2 million payment for the portion of contingent consideration up to the acquisition-date fair value, each of which had no comparable activity in the prior year period.

Current wording

Cash used in financing activities totaled $236.3 million for the nine months ended September 30, 2026, compared to $839.9 million cash provided by financing activities for the same period in 2025, representing a $1,076.2 million decrease. The decrease was primarily attributable to $900.0 million of proceeds from the Term Loan Facility received during the nine months ended September 30, 2025, in connection with the Alani Nu Acquisition, with no comparable proceeds in the current year period. The decrease was further driven by Common Stock repurchases under our share repurchase program of $167.5 million, and an $11.2 million payment for the portion of contingent consideration up to the acquisition-date fair value, neither of which had comparable activity in the prior year period. The decrease was also driven by higher dividends paid on Series B Preferred Stock of $19.1 million, reflecting a full nine months of dividend activity in the current period compared to only a partial quarter in the prior-year period.