THE APEX TIMES
PepsiCo and Celsius Show Two Beverage Playbooks as Energy Growth Meets Dividend Stability
In their most recent quarterly reports, PepsiCo emphasized steadier earnings and shareholder returns, while Celsius highlighted record revenue and rapid scaling within a PepsiCo-linked distribution system.
PepsiCo and Celsius are often grouped together in the same beverage conversation because they share a commercial relationship. But their latest results underline a deeper split between an established consumer staples model and a faster-growing modern energy-drink bet. On June 2, The Motley Fool framed the choice as a trade-off between PepsiCo’s “stability” and Celsius’s “rapid growth,” while noting that the two companies are distribution partners that also compete for consumer attention.
PepsiCo’s latest quarter, for the three months ended March 21, 2026, showed growth with profitability. The company reported net revenue of $19.443 billion, up 8.5% year over year, and operating profit of $3.213 billion, lifting operating margin to 16.5% from 14.4% a year earlier. Earnings per share rose to $1.70, up 27% from the prior-year quarter.
PepsiCo also used the quarter to emphasize shareholder returns. PepsiCo said it is raising its annualized dividend per share by 4%, beginning with the June 2026 payment, and it reiterated its broader cash-return outlook for fiscal 2026. Management projected organic revenue growth between 2% and 4%, core constant-currency EPS growth between 4% and 6%, and a free-cash-flow conversion ratio of at least 80%. It also guided toward total cash returns to shareholders of about $8.9 billion, including $7.9 billion of dividends and $1.0 billion of share repurchases.
Celsius, by contrast, reported a quarter defined by scale gains rather than maturity. In its first quarter of 2026, Celsius posted record revenue of $782.6 million, up 138% year over year. Net income rose to $110.1 million, and diluted EPS reached $0.33 (with adjusted diluted EPS of $0.41). The company reported adjusted EBITDA of $195.5 million and gross margin of 48.3%, down from 52.3% in the prior-year quarter, reflecting margin pressure even as sales accelerated.
Celsius’s growth story is closely tied to its relationship with PepsiCo. PepsiCo previously made an investment in Celsius, and Celsius said the deal involved a $550 million net cash investment by PepsiCo for convertible preferred stock, priced at $75 per share, implying about 8.5% ownership on an as-converted basis, with a 5% annual dividend on the preferred shares.
More recently, PepsiCo and Celsius said they strengthened their strategic partnership in 2025. Under that agreement, Celsius’s Alani Nu brand was set to move into the PepsiCo distribution system in the U.S. and Canada. PepsiCo also said it acquired $585 million in newly issued convertible 5% preferred stock, and that its ownership increased to about 11% on an as-converted basis. The companies also described Celsius becoming PepsiCo’s “strategic energy lead” in the U.S., while PepsiCo led distribution for the Celsius portfolio in the U.S. and Canada.
The Motley Fool’s comparison added a valuation and risk lens. It cited PepsiCo’s fiscal 2025 revenue near $93.9 billion (up about 2.3%) and free cash flow near $7.7 billion, alongside customer concentration risk that Walmart and affiliates accounted for roughly 14% of revenue in 2025. For Celsius, it cited fiscal 2025 revenue near $2.5 billion (up about 85.5%) and free cash flow near $323.4 million, while warning that sales to PepsiCo accounted for roughly 43.2% of total revenue in 2025. It also described valuation differences using forward P/E, a measure of how much investors pay for $1 of expected future earnings (16.4x for PepsiCo versus 20.3x for Celsius in the article), and P/S, price-to-sales (2.1x versus 3.4x).
Still, there are uncertainties that neither set of public disclosures fully resolves. PepsiCo’s and Celsius’s quarterly releases focus on operational results and guidance, but they do not provide a shared “apples-to-apples” valuation bridge, nor do they fully quantify partnership dependencies from PepsiCo’s side for Celsius. In addition, The Motley Fool’s “better buy” framing is inherently opinion-based, and the valuation multiples it cites can vary by data provider.
Why It Matters
- The results highlight two different paths for beverage companies, steady cash generation versus rapid category scaling, both influenced by distribution reach.
- The PepsiCo-Celsius partnership can support growth for Celsius, but the comparison underscores concentration risk tied to distribution relationships.
- PepsiCo’s dividend and cash-return guidance remains a central part of its market narrative as it continues to grow core earnings.
- For Celsius, margin changes alongside explosive revenue growth suggest that scaling costs, product mix, or operational execution remain key variables.
Sources
- Yahoo Finance: PepsiCo vs. Celsius: Which Consumer Goods Stock Is a Better Buy in 2026?
- article (The Motley Fool via Yahoo Finance RSS)
- PepsiCo Q1 2026 earnings release (Exhibit 99.1 PDF)
- Celsius Q1 2026 earnings press release (PDF)
- Celsius and PepsiCo original partnership investment terms (Celsius IR, 2022)
- PepsiCo partnership update with Celsius (PepsiCo newsroom, 2025)
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Key Facts
- PepsiCo reported Q1 2026 net revenue of $19.443 billion, up 8.5% year over year, with operating margin rising to 16.5%.
- PepsiCo raised its annualized dividend per share by 4%, beginning with the June 2026 payment, and reiterated fiscal 2026 cash-return guidance of about $8.9 billion.
- Celsius reported record Q1 2026 revenue of $782.6 million, up 138% year over year, and net income of $110.1 million.
- Celsius reported gross margin of 48.3% in Q1 2026, down from 52.3% in the prior-year quarter.
- PepsiCo previously invested $550 million in Celsius for convertible preferred stock and later said its ownership increased to about 11% on an as-converted basis under a 2025 partnership update.
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