Celsius Holdings, Inc.CELH
Celsius Holdings, Inc. Income Taxes Disclosure
INCOME TAXES
The domestic and foreign components of the Company's income before provision for income taxes were as follows:
| For the years ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Domestic | $ | (109,277) | $ | 266,060 | $ | 291,203 | |||||||||||
| Foreign | 234,310 | (71,010) | 546 | ||||||||||||||
| Net income before provision for income taxes | $ | 125,033 | $ | 195,050 | $ | 291,749 | |||||||||||
The provision for income tax expense consisted of the following:
| For the years ended December 31, | ||||||||||||||||||||
| Current | 2025 | 2024 | 2023 | |||||||||||||||||
| Federal | $ | 37,213 | $ | 43,321 | $ | 79,840 | ||||||||||||||
State and local | 18,388 | 15,536 | 27,596 | |||||||||||||||||
| Foreign | 18,769 | 294 | 192 | |||||||||||||||||
| Current tax expense | $ | 74,370 | $ | 59,151 | $ | 107,628 | ||||||||||||||
| Deferred | ||||||||||||||||||||
| Federal | $ | (54,267) | $ | 1,000 | $ | (34,535) | ||||||||||||||
| State and local | (11,351) | (178) | (8,261) | |||||||||||||||||
| Foreign | 8,282 | (9,997) | 116 | |||||||||||||||||
| Deferred tax expense | $ | (57,336) | $ | (9,175) | $ | (42,680) | ||||||||||||||
| Provision for income taxes | $ | 17,034 | $ | 49,976 | $ | 64,948 | ||||||||||||||
The reconciliation of the 2025 U.S. federal statutory rate to the effective rate and corresponding tax expense on income before provision for income taxes was as follows:
For the year ended December 31, 2025 | |||||||||||
Amount | Tax Rate | ||||||||||
| U.S. federal statutory tax rate | $ | 26,245 | 21.0 | % | |||||||
State and local income tax, net of federal (national) income tax effect [1] | 4,169 | 3.3 | % | ||||||||
| Foreign tax effects | |||||||||||
| Ireland | |||||||||||
| Statutory income tax rate differential | (23,757) | (19.0) | % | ||||||||
| Other | 1,628 | 1.3 | % | ||||||||
| Other foreign jurisdictions | 567 | 0.4 | % | ||||||||
Effect of cross-border tax laws [2] | |||||||||||
| Global intangible low-taxed income | 1,341 | 1.1 | % | ||||||||
| Foreign-derived intangible income | (1,532) | (1.2) | % | ||||||||
| Other | 603 | 0.5 | % | ||||||||
| Nontaxable or nondeductible items | |||||||||||
| Executive compensation | 2,168 | 1.7 | % | ||||||||
| Other, net | 507 | 0.4 | % | ||||||||
| Changes in unrecognized tax benefits | 5,235 | 4.2 | % | ||||||||
| Other adjustments | (140) | (0.1) | % | ||||||||
| Reported tax | $ | 17,034 | 13.6 | % | |||||||
[1] State taxes in California, Florida, Minnesota and Pennsylvania made up the majority (greater than 50 percent) of the tax effect in this category.
[2] Includes the impact of any tax credits
A reconciliation of the U.S. Federal statutory tax rate to our 2024 and 2023 annual tax rate is as follows:
| For the years ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| U.S. Statutory federal rate | 21.0 | % | 21.0 | % | |||||||
| State taxes, net of federal benefit | 6.2 | % | 4.7 | % | |||||||
| Earnings in jurisdictions with tax rates differing from U.S. federal rate | 3.3 | % | 0.1 | % | |||||||
| Tax effect of Pepsi valuation premium | — | % | — | % | |||||||
| Stock based compensation | (5.2) | % | (3.4) | % | |||||||
| Change in valuation allowance | (0.7) | % | (0.3) | % | |||||||
| Change in deferred balances | 0.2 | % | 0.3 | % | |||||||
| Other | 0.9 | % | (0.2) | % | |||||||
| Effective tax rate | 25.7 | % | 22.2 | % | |||||||
The Tax Cuts and Jobs Act introduced a provision to tax GILTI of foreign subsidiaries and a measure to tax certain intercompany payments under the BEAT regime. For each of the years ended December 31, 2025, 2024 and 2023, the Company did not generate intercompany transactions that met the BEAT threshold but had to include GILTI relating to the Company’s foreign subsidiaries. The Company elected to account for GILTI as a current period cost.
Impact of One Big Beautiful Bill Act
On July 4, 2025, the OBBBA was signed into law in the U.S. The legislation introduced a wide array of changes to the U.S. corporate tax system, including permanent extensions of certain provisions of the Tax Cuts and Jobs Act of 2017 and substantial modifications to the international tax regime applicable to U.S. multinational corporations. Key international provisions include changes to the GILTI regime, the treatment of foreign tax credits and interest expense limitations under Section 163(j). While certain provisions took effect in 2025, others are phased in over subsequent years. The OBBBA did not materially impact the Company's estimated annual effective tax rate as of December 31, 2025.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts for income tax purposes. Deferred tax assets and liabilities consisted of the following:
| December 31, 2025 | December 31, 2024 | ||||||||||
| Net operating loss carryforwards | $ | 2,349 | $ | 10,869 | |||||||
| Foreign disallowed interest carryforwards | 836 | 739 | |||||||||
Deferred revenue | 40,115 | 43,289 | |||||||||
| Fixed assets | (12,667) | (7,742) | |||||||||
| Pepsi valuation premium | (59,573) | (64,356) | |||||||||
| Right of use liability | 3,504 | 3,566 | |||||||||
| Right of use asset | (3,512) | (4,527) | |||||||||
| Distributor termination fees | 108,515 | 33,960 | |||||||||
| Stock-based compensation | 4,006 | 2,728 | |||||||||
| Accrued legal | 15,333 | 14,562 | |||||||||
| Inventory and operating reserves | 11,388 | 6,033 | |||||||||
| Intangibles | (15,685) | (1,825) | |||||||||
| Total deferred tax assets | 94,609 | 37,296 | |||||||||
| Valuation allowance | (905) | (927) | |||||||||
| Net deferred tax assets | $ | 93,704 | $ | 36,369 | |||||||
At December 31, 2025, the Company had approximately $1.1 million of Federal net operating loss carryforwards and $1.1 million of State NOL carryforwards, which will begin to expire in 2027. The Federal and State NOLs are subject to limitation under Section 382 of the U.S. Internal Revenue Code due to a December 2008 ownership change of greater than 50.0% over a three-year testing period. The ownership change resulted in $4.5 million of NOLs that will not be realized. The $4.5 million has been removed from the available NOL carryforward and U.S. NOL deferred tax asset. At December 31, 2025, the Company had foreign NOL carryforwards and interest expense carryforwards of approximately $12.6 million and $4.2 million, respectively, some of which will begin to expire in 2026.
The Company considers the earnings of its foreign entities to be permanently reinvested outside the U.S. based on estimates that future cash generation will be sufficient to meet future domestic cash needs. Accordingly, deferred taxes have not been recorded for the undistributed earnings of the Company’s foreign subsidiaries. All other outside basis differences not related to earnings were impracticable to account for during this period of time and are currently considered as being permanent in duration.
As required by ASC 740, Income Taxes, the Company evaluates the realizability of deferred tax assets on a jurisdictional basis at each reporting date. Accounting for income taxes requires that a valuation allowance be established when it is more likely than not that all or a portion of the deferred taxes will not be realized. In circumstances where there is sufficient negative evidence indicating that the deferred tax assets are not more likely than not realizable, the Company establishes a valuation allowance. Through the year ended December 31, 2020, the Company maintained a full valuation allowance on its worldwide net deferred tax assets. During the fourth quarter of 2022, the Company concluded that it was more likely than not that its Celsius Europe deferred tax assets would be realized, based on Finland profitability and NOL utilization in 2021 and 2022. For the year ended December 31, 2022, the Company reported a release of non-U.S. valuation of $0.5 million. During the fourth quarter of 2024, the Company concluded that it was more likely than not that its Celsius Finland deferred tax assets would be realized, based on Finland profitability and NOL utilization in 2023 and 2024. For the year ended December 31, 2021, the Company reported a release of its U.S. valuation allowance for deferred tax assets of $6.0 million. For the year ended December 31, 2022, the Company reported a release of non-U.S. valuation of $0.5 million. For the year ended December 31, 2024, the Company reported a release of non-U.S. valuation allowance of $0.9 million. The Company continues to maintain a valuation allowance on certain of its foreign net operating losses as it is not more likely than not that the losses in those specific jurisdictions will be realized.
A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
| 2025 | 2024 | ||||||||||
| Gross unrecognized tax benefit, beginning of period | $ | 1,412 | $ | 1,257 | |||||||
| Additions based on tax positions related to the current year | 5,000 | 410 | |||||||||
| Additions based on tax positions related to the prior years | 2,577 | — | |||||||||
| Reductions due to lapse in statute of limitations and settlements | (410) | (255) | |||||||||
| Gross unrecognized tax benefit, end of period | $ | 8,579 | $ | 1,412 | |||||||
The Company recognizes only those tax positions that meet the more-likely-than-not recognition threshold and establishes tax reserves for uncertain tax positions that do not meet this threshold. To the extent these unrecognized tax benefits are ultimately recognized, approximately $8.6 million will impact the Company’s effective tax rate in future periods. Tax positions are not expected to decrease within the next twelve months. Interest and penalties associated with income tax matters are included in the provision for income taxes. As of December 31, 2025, the Company had uncertain tax positions of approximately $9.8 million, inclusive of $1.2 million of interest and penalties.
The Company files U.S., state and foreign income tax returns in jurisdictions with various statutes of limitations. Below is a summary of the filing jurisdictions and open tax years:
| Open Years | |||||
| U.S. Federal | 2022 - 2024 | ||||
| U.S. State and local | 2021 - 2024 | ||||
| Non-U.S. | 2018 - 2024 | ||||
Income taxes paid (net of refunds received) consisted of the following:
For the year ended December 31, 2025 | ||||||||
| U.S. federal | $ | 46,464 | ||||||
| U.S. state and local | ||||||||
Florida [1] | 3,481 | |||||||
| Other | 14,116 | |||||||
| Foreign | ||||||||
| Other | 170 | |||||||
| Income taxes paid, net | $ | 64,231 | ||||||
[1] Income taxes paid in these jurisdictions exceeded 5.0% of the total income taxes paid (net of refunds received).
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 16, 2022 | |
| 2020 | Mar 11, 2021 | |
| 2019 | Mar 12, 2020 | |
| 2018 | Mar 14, 2019 | |
| 2017 | Mar 8, 2018 | |
| 2016 | Mar 30, 2017 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.