Greetings. Welcome to the Celsius Holdings, Inc. first quarter 2023 earnings call. At this time, all participants are on a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. It is now my pleasure to introduce your host, Cameron Donahue, Investor Relations for Celsius. Thank you. Cameron, you may begin. Thank you, operator, and good afternoon, everyone. We appreciate you joining us today for Celsius Holdings 1st quarter 2023 earnings conference call. Joining me on the call today are John Fieldly, President and Chief Executive Officer, and Jarrod Langhans, Chief Financial Officer. Following the prepared remarks, we'll open the call to your questions and instructions will be given at that time. The company released their earnings press release earlier this afternoon and all materials will be available on the company's website, celsiusholdingsinc.com. As a reminder, before I turn the call over to John, an audio replay will be available later today and can be accessed with the same live webcast link in our conference call, announcement and earnings press release. Please also be aware that this call may contain forward-looking statements which are based on forecasts, expectations and other information available to management as of May 9, 2023. These statements involve numerous risks and uncertainties, including many that are beyond the company's control. Except to the extent as required by law, Celsius Holdings undertakes no obligations and disclaims any duty to update any of these forward-looking statements. We encourage you to review in full our safe harbor statements contained in today's press release and our quarterly filings with the SEC for additional information. With that, I'd like to turn the call over to President and Chief Executive Officer, John Fieldly for his prepared remarks. John. Thank you, Cameron. Good afternoon, everyone, and thank you for joining us today. We achieved record sales for the first quarter of approximately $260 million, an increase of 95% from last year's first quarter of $133 million, exceeding the $200 million revenue threshold for the first time in company history. We saw a sequential increase from the fourth quarter of sales of $178 million exceeded it by $82 million, or 46% growth sequentially. Our North America revenue increased 101% for the quarter to $249 million, up from $124 million in the year ago quarter. Celsius continues to be the top driver of growth within the energy category and was the number one dollar growth brand in total U.S. MULOC Energy for the last 52 weeks ending as of March 26, 2023, growing approximately $552 million in increased retail sales and contributed to 23% of category growth on an overall increase of 139.6% versus the year-ago period. Per IRI in the last four weeks, ending as of March 26, 2023. In total MULOC Energy, Celsius is the number three energy drink brand in the U.S., reaching a new market share record totaling 7.5%, doubling its 3.7% share a year-ago. As Celsius and Pepsi continue to synchronize our organizations, we continue to see opportunities for future efficiencies. In the first quarter, we experienced an inventory build quarter-over-quarter from December 31, 2022. We expect this increase was due to anticipated retailer resets and to build inventory levels. We will continue to work with Pepsi to make sure there is adequate inventory and update shareholders quarterly if there is any significant deltas that impact the warehouse center inventory levels. Jarrod will provide additional details shortly. We continue to see growth across all channels, including those non-tracked with the club channel sales totaling over $47 million for the quarter ending March 31, 2023, up 77% compared to $26 million in the first quarter of 2022. We also just hit a new record on Amazon. Celsius is now the second largest energy drink brand with a 19.1 share of the energy category as of the last four week period ending April 22, 2023, per Stackline energy drink category total U.S. data. In addition, we continue to expand growth opportunities and non-track food service channels and are gaining more distribution in colleges, universities, hospitals, hotels, eateries and casinos, and more. Overall, food service represented approximately about 10% of our PepsiCo revenues, and we see significant opportunities to scale and grow over time. We have been extremely happy with our PepsiCo partnership and see a long runway of growth ahead of us across a variety of channels, including expanding in retail, convenience and food service. As highlighted in our earnings supplement for the four week period per IRI and SPINS total energy data ending March 26, 2023. As stated in MULOC, Celsius is the number three energy drink brand in the United States now has a 7.5% market share, doubling from its 3.7% share a year ago, reaching an all-time new high. In addition, in MULOC, Celsius grew its ACV to a record 95.4% versus 69.5% in the year ago period, which is a tremendous achievement by both our teams and our partner, Pepsi. In convenience, Celsius has gained an additional 37.7 points of ACV growth versus the prior year to end the period at a 93.4% compared to 55.7% of ACV in the prior year. This provides a tremendous opportunity as we have gained greater availability across the country in the convenience channel and are now gaining more awareness with consumers. Internationally, sales grew 15% growth rate for the quarter, totaling $11.4 million compared to $9.9 million in the first quarter of 2022. We believe there is significant opportunity for international growth going forward with PepsiCo. While we just began our distribution partnership with Pepsi and our initial focus has been on the U.S. distribution transition to their network, we have begun initial discussions, and we see significant opportunities to capitalize on global scale in the future, reflecting the changes in consumer preferences for better for you offerings. While the U.S. transition has taken a majority of our focus to date, we do expect to announce additional international expansion details in the future. With that said, we look forward probably likely to early 2024 for opportunities to roll out internationally, with 2023 being the year of planning around logistics, production, distribution, and marketing. The company achieved a record non-GAAP adjusted EBITDA of $48.7 million for the first quarter, representing over an 18% of sales for the period. This was driven by not only a record sales, but we also saw benefits across the timing of marketing and sales programs, as well as the results of gaining operational leverage across G&A. Although we saw some very good leverage across our SG&A, we would expect our investments to increase during the summer season of Q2 and Q3 of this year as we continue to drive growth, awareness profitably and are entering into a number of campaigns designed to grow brand awareness. The company sees opportunities to drive incremental efficiencies through the back half of 2023 from expected improvements in gross profit margins as we optimize and synergize our supply chain and gain more efficiencies. In addition, we see additional leverage opportunities as we scale to drive further efficiencies in our SG&A. To close my prepared remarks, we achieved the highest quarterly dollar sales growth in company history in the first quarter. As previously our previous recorded highest quarterly record revenue was in Q3 of 2022, we exceeded by over $70 million. We are gaining market share at the fastest pace in company history, while at the same time drove the highest quarterly EBITDA margin of over 18%, demonstrating the leverage in our operating model. We believe we have significant runway ahead of us and are excited about the spring resets, driving additional shelf space in both new and existing customers while optimizing our placements. Celsius is now an established leader in the energy category, driving growth in the entire category with incremental opportunities for further growth as we continue to scale and leverage our partnership. I will now turn the call over to Jarrod Langhans, our Chief Financial Officer, for his prepared remarks. Jarrod. Thank you, John. Turning to our first quarter financial results, revenue is approximately $260 million, an increase of 95% from $133 million driven by our North American business, where first quarter revenues were $249 million, an increase of 101% from the same period in 2022. The primary factors behind the increase in North American sales volume were related to our integration into the Pepsi distribution system, where we saw increases across the board, including continued strong growth in traditional distribution channels, including SKU increases, as well as distribution across a number of new channels within C&G and food service. We've also seen our velocity increase post our significant ACV growth. During the quarter, we saw an increase in the days inventory outstanding within the mixing centers relative to the end of 2022, which equated to roughly $20 million-$25 million in incremental sales. We would anticipate that this build would be sustained through the summer selling season as we continue to see steady growth across our footprint. Gross profit for the quarter increased 111% to $114 million, up from $54 million in the year ago quarter. Gross profit margins in the first quarter were approximately 44% of revenues, compared to approximately 40% for the prior year first quarter. The improvement in gross profit margins was due to lower average can prices and leverage of our orbit model, offset in part by increased freight and a few million dollars of inventory write-offs. Q1 was the second quarter that we were operating within our new distribution system, and we continue to drive efficiencies and optimization within the system while maintaining our number one goal of keeping the shelves stocked in order to meet the consumer demand. Looking out across the year, we continue to believe that we will operate with gross margins in the mid-40s, with some pressure during the first half of the year while we fully integrate into our new distribution system and begin to better optimize our supply chain with upside in the back half of the year. Sales and marketing expenses for the three months ended March 31, 2023, were approximately $48 million, an increase of approximately 51%. Although we saw increased marketing investment during the quarter in line with historical spend, this was offset by less expense within sales due to timing of our activation. As a percentage of sales and marketing was 18.3%, compared to 23.7% in the prior year. On a full-year basis, we continue to expect our sales and marketing expenditures to remain consistent with historical run rates. As noted, this quarter benefited by timing as well as some inventory builds within our mixing centers. General and administrative expenses for the three months ended March 31, 2023, were approximately $21 million, an increase of 75% relative to Q1 2022. This increase was due to increased employee costs associated with building a back shop that can scale as we grow, including stock-based compensation, as well as administrative fees such as legal, audit, and other consulting fees. G&A expense as a percentage of sales was 8% for the first quarter of 2023 versus 9% in the prior year, which is in line with expectations. We'd expect to see this area begin to leverage against our growth during 2023. Moving to our back office build out. We have significantly expanded our back office team over the last year, adding a number of team members across IT, FP&A, controlling, legal, and HR, driving great improvements, consistency in processes, and transparency across the business. We look forward to the many successes that these team members will assist us with as we look to deliver an effective control environment for 2023 and drive further value with our operations, sales, and marketing teams. From a legal perspective, we have closed on the settlement proceedings with our can label and are pleased to have that behind us. In regard to the SEC review, we continue to cooperate with any inquiries or requests that are received. With that said, we do not have any further updates at this point in time. Focusing now on liquidity and capital resources. As of March 31, 2023, we had cash of approximately $634 million and net working capital of approximately $801 million. Included within the first quarter cash balance was approximately $38 million, which is primarily balances due to Pepsi, representing excess funds provided by Pepsi for our distributor transition. Cash flows used by operating activities totaled $14 million for the first quarter, which compares to $9 million in net cash provided by operating activities in Q1 last year. Overall, we saw some cash usage associated with our growth as well as the timing of working capital. As we look to Q2, we would expect to return the excess funds to Pepsi while also improving on our DSO. Overall, we would expect that excluding timing impacts of cash transactions associated with the Pepsi transaction, we would continue to generate cash year-over-year. Looking at inventory, total inventory ended at roughly $150 million, down versus the prior quarter. This was driven in large part by the significant increases that we saw in our sales volume. As we look to the busy summer months, we will see production increase significantly to accommodate the demand of the market. Going forward, we would look to carry additional inventory in order to make sure that we are able to keep up with the significant growth we are experiencing. At the same time, we do see opportunities to drive efficiencies in our DIO as we move through 2023. This concludes our prepared remarks. Operator, you may now open the call for questions. Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we poll for questions. Our first question is coming from Mark Astrachan from Stifel. Please proceed with your question. Hey, thanks. Afternoon, guys. Man, I'm still writing down some of that stuff that you just breezed through. Whoo. That is a fast transcript. I guess to start, maybe give us a bit of an update on how the spring resets look from a shelf space standpoint, and how much is in existing energy doors, how much is coming in or going into new doors, and kind of overall expectations for incremental space for the year. Yeah, Mark, great question. I think, you know, We're really excited about the resets, you know, that started off this year, especially started in, you know, in January. We saw a good increase in the quarter. You know, what we're looking at is we saw a lot of great expansion, as I kind of mentioned on the call, in the convenience channel, where we saw the biggest really ACV gains when you go from over a 37.7% really increase in points of distribution and convenience. That's a really big win for the company. You know, that's really the last channel of expansion for us, you know, into track channels. We're really excited about that. I think we're seeing good velocities in the convenience channel as well. We're seeing them grow. That's a big win. Also, in overall MULOC getting to that 95.4% of ACV, you know, most recently as of the March 26th data, coming out of the IRI and SPINS data. I think we have some more expansion there, but we really grew significantly on the resets. Also, the number of items carried on average per store increased as well. Right now we're looking at about an average at the last four weeks as of March 26th, really at the end of the quarter. We went from an average of about 13.6 items per location in the recorded channel versus the prior year was at 8.6. We saw a really good growth in the number of units. We got some more resets ahead of us. I think the biggest opportunity we have, as well as in track channels, is really gaining better placements in locations, more cold availability, more cooler placements, and those type of execution. Maybe not a large increase in number of doors being at the 95% at the end of the quarter, but really the breadth in each retailer's, the massive opportunity for us. Got it. That's helpful. Maybe just on the doors, existing doors versus new doors, do you still wanna be in the legacy energy door? Somewhat related to that, I think, you know, many folks have been surprised at, that the velocities being not only as strong as they've been, but actually accelerating with all the incremental points of distribution. How much of that is just higher velocity C-stores versus just overall brand awareness? You know, kinda how do you think about that number through the summer? Yeah, I think, you know, when you look at our, I guess, you know, as you call them, legacy doors, that's mainly in the food. You know, when you look at the food channel, you know, we still maintain in the HBC section in a variety of stores, including Publix and, you know, and Kroger and those. You know, majority of the stores outside of those are in energy. You know, we do great business in the food channel. We do extremely well at Publix, doing extremely well at Kroger. It's really about gaining those additional off-shelf placements, those additional cold placements, cooler placements. You know, I mean, we're not gonna change that strategy within the food in our existing business at this time. When we look at, you know, the distribution ahead, there is opportunities for additional SKUs. We see that. We got some great innovation planned for this summer. I think you saw some great innovation come out in the first quarter with new flavor innovation, our Lemon Lime, our Green Apple Cherry flavor at 7-Eleven was a great win for us. There's a lot of great innovation coming this summer that we'll be able to add some additional breadth within the retailers. That's great. Just on the velocity. Thank you. I mean, we're seeing velocity increase, Mark. I think there's opportunities for sure to go further north on that. You know, we got some great marketing programs ahead of us, and we think summer's gonna be a great summer for us, you know. We're watching it closely. I think, you know, we don't provide any forward guidance, but something to look at, and we're monitoring it closely all around, especially as we've increased such an exponential increase in ACV. Got it. Thanks, guys. Thanks, Mark. Thank you. Your next question is coming from Jeff Van Sinderen from B. Riley. Your line is live. Hi, everyone, let me add my congratulations on the strong quarterly metrics. I wonder if we can kind of circle back to and delve a little bit more into how much of the Q1 re-acceleration of growth was initial channel fill for new stores, new doors, call it, added SKUs, et cetera, versus reorders derived from sell-through at retail. Trying to get a better sense, I guess, of how much the initial channel fill impacted in new doors, new SKUs in the quarter, and then maybe what impact that phenomenon might have in Q2. I think you alluded to a little bit of that, or Jarrod did in his prepared comments. Maybe just how we should think about growth acceleration from here. Yeah, no. Thanks, Jeff. You know, we did gain some distribution, you know, with the resets that had taken place. You know what? I think as we're starting to see velocity increase, that is a really good sign that we're cycling through, you know, whatever pipe fills we had for the quarter. The increase in distribution didn't slow, you know, the overall velocity, so the sales are moving quicker out of the registers. I think that puts us in a good position. We feel really confident. It's hard to say exactly what the pipe fill was. You know, we did talk about in the quarter how we saw Pepsi increase inventory levels, which Jarrod talked about earlier in regards to approximately $20 million-$25 million, we feel is the average impact for the quarter, with the increased inventory levels. I think seeing the velocities increase, I think we get a really strong feeling that we're seeing repeat purchases out there. Mm-hmm. Okay. That's helpful in quantifying the inventory with Pepsi. Let me ask you this, as you're going into some of the... I mean, you've got a great ACV now. So you're going into some, I guess, some C stores, for example, that might be lower volume, some other doors within various retailers that might be, perhaps a little bit lower volume. Just wondering what you're experiencing there as far as sell-throughs, and then, overall, what's your outlook for your business in the C channel? Yeah, I mean, that's a great question. I mean, we did gain a lot of, you know, Tier 3 and Tier 4 convenience, you know, distribution, especially with the expansion, you know, since October with the Pepsi system. We had a lot of Tier 1 and Tier 2s. It's really building out a further breadth within those, within our convenience, where we're seeing, starting to see velocities increase. I think when you look at the smaller Tier 3, Tier 4s, you know, they have the lower velocity, it's difficult to get the true reporting on that, on the velocity. I think we're looking at the overall velocity as a good number, an indication on how the overall health of the portfolio is performing. I think we're really confident in convenience. I mean, we know this brand performs well. We're seeing usage occasions expand, outside of, you know, energy. We're just really excited on where the brand is and where the portfolio and where we're headed. It's something we're monitoring closely. Food service now, when you look at food service opportunity, which is 10% of Celsius' business, it just shows you the broad brush of the portfolio and how it's resonating with a broad brush of consumers today. It sounds like you feel like you're gaining more traction in food service and some of the other channels as well that are not reported or not tracked. That's correct. We see great opportunity in non-tracked channels as well. Okay, terrific. Thank you for taking my questions. I'll take the rest offline. Continued success. Thank you. Thank you, Jeff. Your next question is coming from Kevin Grundy from Jefferies. Your line is live. Hey, great. Good evening, guys. Good evening, Kevin. Hey, question, John, for you. Just, in terms of the ambition now with, items per store. The ACV progress has been fantastic. I remember a conversation you and I had, you know, in the fall, and it was, you know, a 10% market share was kind of an ambition at that point. It's, you know, if we can get 92% ACV, if we can get 15 items per store, if we can maintain current velocity, and you're kind of checking all the boxes at this point. You know, around 7.5% share, you know, this path to 10% is, you know, very near and present now. As you kind of take a step back, what do you think is possible now in the Pepsi system? The 10%, again, seems like, you know, it's very attainable and near term. What do you think is possible now for this brand as you look at the strength and the reach of the Pepsi system as well as what you guys have done with the brand? I think, you know, Kevin, I mean, it's a great question. I think, you know, we've just seen this ACV, and we're quite amazed with how quickly the ACV has come together at a 95%. Internally, we thought we were gonna at least take potentially another 12 months, 18 months to get to that 95% ACV. I, you know, totally really give hats off to our sales team, our key accounts team, and also all our partners at Pepsi have done just an amazing job. I think they see the opportunity we have here with Celsius, that it's bringing in new consumers to the category. You know, I think when you look at it, we have a lot to learn over the next, you know, probably a quarter or two to see how this product, this portfolio performs in the channels that it's expanded in, especially in the convenience channel so quickly. I think we'll have a better view of that, you know, probably the end of next quarter and especially at the end of Q3. You know, when you look at the number of items per store, we're at 13.6. When you look at some of the current velocity numbers we had on a per SKU item, and you look at, you know, gaining 15 to 17 items per store by the end of the year, if that's a potential, you know, that gets you close to that 10% opportunity, 10% share in the category. You know, we're really excited to hit the 7.5 share most recently at the end of the first quarter, and there's lots of opportunities ahead. Got it. Thanks, John. Just a follow-up. I feel like, you know, probably be remiss if we did not touch on some of the competitive launches in the space, you know, including Monster Zero Sugar, Reign Storm, which I think is not lost on you for a moment, kind of looks remarkably from a packaging perspective like your product, Prime in sports and energy. There's been a lot in a fairly short period of time, and I know it's still very early days with Zero Sugar and Reign Storm, which are kind of just hitting. Thoughts there in terms of how worrisome those competitive launches are? Anything you're seeing very early days, where there's some overlap with Celsius? Anything you can give there in terms of, market share, velocity, et cetera, I think would be helpful to folks. I can pass it on. Thank you. Yeah, I think, you know, Kevin, great question. I mean, there's competition every day, Energy category is about as fierce as they come. Tons of new competition every day. You know, I think where the opportunity lies, where we're looking at, you know, when you talk about, you know, where Celsius can go and, you know, like in Miami, when you look at the Miami Fort Lauderdale market in MULOC, the last four weeks, ending as of April 23rd, 2023, we have about a 21.7% share in the market. You know, there's a lot of opportunities. We're number two brand now on Amazon, compete with a lot of different brands in the category. I'm not gonna comment on any other brand out there. It's a big category, you know, and we wish every brand luck on operating their business. We're really excited where our portfolio is, where it's resonating with consumers, excited about, you know, our partner, Pepsi, and just see a lot of opportunities at this time. We're really excited about moving forward. Okay. Very good. Thanks, guys. Continued success. Thank you. Thank you. Your next question is coming from Peter Grom from UBS. Please proceed with your question. Thanks, operator, good evening, everyone. Jarrod, I just had a few questions on gross margin. Maybe just first, can you just help us understand how much the inventory write-off impacted GM this quarter? Second, I recognize you still expect gross margin for the year in this mid 40% range. I may have misheard you, but I thought you mentioned that you expect one-half gross margins to be under pressure. Is that just relative to the mid 40% range? Is that year-over-year? Just, any color on that comment would be helpful. You know, we've been consistent with saying we're gonna be in the mid-40s. If you looked at the run rate we left Q4 on, we did see some additional write-offs on inventory as we are building out the supply chain and driving some efficiencies within that channel. I mentioned on the call it was $2 million. Not a huge amount, but enough to impact the margin a little bit. We also had a little bit higher freight costs within the quarter. You know, as we get to the back half of the year, we'll be looking to clean up the freight lanes and make sure we got the supply chain operating as efficiently as possible and making sure we're fully optimized. It was really just around the inventory and the freight in terms of what would have driven margins really from a Q4 to a Q1 perspective. We're still confident in the mid-forties, and we see the opportunity for upside in the back half of the year as we get fully integrated into our new distributor. Okay, super helpful. I guess just I would love to get some more details on kind of this international discussion, and I recognize that it's likely to prove to be a 2024 narrative. Can you just help us understand the work you've done that informs, you know, the decision that the brand can resonate and do well in these markets? You know, what markets are you targeting initially? Is this going to be some broad-based multi-market rollout? Is it going to be more gradual? Just, you know, any initial color you can provide would be super helpful. Yeah, I think we've talked about this on some of the conferences we've been in, back in March. You know, from our perspective, we look to hit markets that are obviously already, you know, well-defined energy markets. We're not going into a new market that we have to train the customer on what is, you know, what is energy. If you look around, kind of think of APAC and Europe, the different markets that are popular energy drink markets, we'd look to roll into those first. We're not gonna do a shotgun approach. We'll look to go into a handful of markets first, and learn and partner in most instances with Pepsi or Pepsi partners, and really use that as a tool to learn to build the model. From there, we would look to roll into, you know, more markets over the coming years. I would say for kind of a 2024 launch, we're looking at a handful of markets to really get into, understand them, learn them, but they're gonna be the bigger energy markets across Europe and APAC. We do see some opportunities in some smaller markets where we can kind of roll in because they're close to co-packers and they're ready, but those wouldn't really move the needle. You know, there's some core markets we'll learn at. You know, most people know what those markets would be if you look in Europe and in APAC in terms of what are the big energy drink markets. That's really this year, it's all about planning. It's about getting aligned with the partners. It's about creating market launch plans, and then, you know, looking to roll out in 2024. Got it. Thanks so much. I'll pass it on. Thank you. Your next question is coming from Jon Keypour from Bank of America. Hey, everybody. Congrats on the quarter. I just wanted to drill into the food service commentary you guys had. If I heard correctly, that was 10% of sales in the quarter. I'm just wondering maybe what the impact, you know, as Pepsi kind of brought in that inventory to sell, what the pipe fill for food service might have been in 1Q. Jon, great question. That is, just to correct myself there. That's 10% of our Pepsi sales approximately is coming from the food service business. We've been working on that since October. When we first in the launch, initially partnered with Pepsi. We've been expanding distribution, a variety of outlets and college universities, hospitals, just expanded into a variety of hotels. It is not really a pipe fill in the quarter, I would say. We just continue to build upon the momentum. We are gaining more distribution, but we're seeing good reorders and strong reorders within the channel, and we think that can be a really meaningful growth opportunity for us as we go forward and gain more distribution. We just really as we look ahead, the distribution opportunities is at eateries and within fast casual restaurants. We feel there's a great opportunity there, and that's really has been on tap. It definitely tells you the brand resonates with an extremely broad consumer, just to see the sales mix at the Pepsi system of approximately 10% of sales today. It gets us really excited. Great. Just one follow-up. I guess looking at the Nielsen data, this is a boring question that I got asked a lot last quarter, but I have 1Q growth in scanned channels, about 138%. You know, if we use that and sort of apply it to what 1Q was in 2022, it implies something like $290. It's about a $45 million difference. You know, if you do the same math on in 4Q, it's about a $50 million difference. Is that the same kind of like the lag between scanned and reported that we should kind of expect? Is there any line of sight you guys have, just some lumpiness or more or less or any kind of swings in that regard? I mean, what you're getting on scan data is coming out of the register. You know, when you look at it, I think there's, you know, there's probably some lumpiness in regards to, you know, the kind of the value chain as it's going through the Pepsi mixing centers and then into their sales farms and then into the customers and then cycling through. You know, it's something we watch. You also have the mix of our Amazon business as well as our club business. There's that's in there. You know, it didn't grow at those faster rates. I think it's a mix of all those items and probably a little bit of timing. Okay. Thank you. Thank you. Once again, everyone, if you have any questions or comments, please press star then one on your phone. Your next question is coming from Gerald Pascarelli from Wedbush Securities. Your line is live. Hey, guys. Good evening. Thanks very much for the question. You know, obviously very strong revenue growth here. Sounds like distributor inventory levels are going to remain elevated at least over the next few months. Just on your supply chain, can you speak to your ability to continue to service this type of demand, you know, maybe over the longer term, in particular as it relates to your aluminum can supply, which is now, you know, back to being sourced domestically, which has obviously had a big benefit to your margins. Just, I guess, any kind of high level color you could provide on your thoughts there would be helpful. Thanks. Yeah. From a raw material perspective, we're in great shape. We've got multiple partners in the U.S., like you mentioned, from a can perspective, no issues there. From a capacity perspective, we've got the ability to quickly double in terms of capacity and in terms of production. We've got our Orbit model built, but we've got a number of co-packers that we can flex to, and we have capacity at our current co-packers that we can utilize as well. We're in great shape in order to meet the demand we're seeing or even demand outsize relative to what we're seeing. From a supply chain and production perspective, we're in good shape. Perfect. Thanks, Jarrod. Appreciate it. Next one for me is just on the club channel. If you could just provide maybe a refresher, of where we are kind of on the 18-pack transition. I know you were in the midst of rolling out a second variety pack to your legacy stores. Finally on the BJ's rollout, just where we are with that. I know that that was taking place over the course of this quarter. Thanks. Yeah. Gerald, it's John. We've pretty much have moved into the 18-pack within all of the club channels, and we've started to expand from our core variety pack. In addition, you'll see incremental placements at a variety of club channels with our five-pack that went in. Both packs have been doing extremely well. I think there's opportunities to get further flavor combinations and/or single flavors in that channel since we're seeing great success there. Perfect. Thanks very much for the color, guys. I'll pass it on. Thank you. Thank you. Your next question is coming from Michael Lavery from Piper Sandler. Your line is live. Thank you. Good afternoon. Good afternoon. Just wanted to come back to the $20 million-$25 million inventory you mentioned for the Pepsi system, the inventory build. With the ACV running ahead of your expectations and velocities as well, is there a good portion of that that's really just an adjustment to faster sell-through and kind of a reset to normalized levels that are above what they would have initially expected? Or is that really some cushion that's volume that's pulled forward? Can you kind of dissect it, you know, out of that amount if there's a bit of both? Yeah. There's a bit of a build for the summer selling season, to get ready for it and to meet the expected volume. To your point, a bit of that is in anticipation of, you know, Q2 and Q3. We've also got a number of activations and a number of sales and marketing programs that we've got ahead of us over summer. You know, I would say it's partially, well, in large part, it's preparation of what's to come. Okay, that's helpful. Just on the SG&A run rate, it's been in roughly the same neighborhood the last three or so quarters. Looking ahead, I know you've talked about stepping up the marketing a little bit, but you also get some operating leverage benefits from the revenue growth. How do we think about just how that might look over the rest of the year? You know, our plan is, or at least, our expectation is, if we have the opportunity to continue to drive velocity, we wanna maintain our kind of historical run rate. I think in on our last call, we talked about kind of 22%-24%. I think historically, we've been more in that 23%-24% range, we were talking about can we shave off a couple percent this year. We did just over 18% in the quarter. We did benefit with some of that, you know, inventory build, also with the speed at which our revenues are growing and the ability that our marketing team has been able to really drive that velocity and our sales team has been able to drive the ACV with Pepsi. We have been benefiting and seeing leverage there. We are gonna, you know, we've got a 100 Days of Summer program. We've got activation and a number of things we'll be doing over the summer. We do look to increase our marketing and sales spend. At least for the summer period, we're, you know, the goal is to stay consistent with history. You know, but there is opportunities with the rate we're seeing the revenues grow to continue to leverage. You know, I think the goal for the year was to end the year up with that kind of 22% marker. Can we do better? If we have the opportunity, we will. At the same time, we wanna make sure that, we're putting the right money, you know, into the right investment into making sure those velocities continue to grow. Okay, great. Thanks so much. Thank you. Your next question is coming from Thomas McGovern from Maxim Group. Your line is live. Hey, guys. Thanks for taking my question. Just to start, I just have a question on the back office build-out. Given your summer launches, which you guys have mentioned quite a few times, and then this presumed transition into the international markets, just wanna get an idea of how you guys are looking at it. Do you think it's a sufficient build-out for the near term, or do you expect to continue to build on your back office throughout 2023? Well, I think when you. Thanks, Thomas, for the question. I think when you look at the back office, as Jarrod was talking about, you know, we've been building it out really on our finance, IT, that he's referencing, as well as our GL teams, as well as our legal teams. You know, when you look at back shop office there, you know, we've built out a great team. Probably have a few more hires here that we're working on. You know, we've been really investing as well, in addition to, you know, Jarrod's departments that he's referencing on specific finance and, you know, HR, legal areas. We also are investing in operations department as well. We'll have some additional hires there as we scale and gain more, really, and open up additional co-packers and have greater runs taking place to drive more efficiencies with logistics and so on. We have also been investing. We continue to plan to invest and grow our sales teams and marketing teams as we build out. I think you're gonna see leverage opportunities, especially when you look at building out, you know, the human resources. I think we're gonna get better leverage on our marketing investments, especially now that we have much broader distribution on hand and have reached that 95% ACV in the U.S.. When we build out internationally and the plans we're working on, we will be investing in these new markets. We'll have more details on that as we continue to get further in the back half of 2023 and 2024. There will be initial investments that will be required to enter new markets, you know, on a go-forward basis. Great. Thanks for that color. Just my last question real quick is if you guys are still providing these metrics, I was curious to know how many branded coolers there are at the end of the quarter, how many coolers you're in total, and then just kind of where you guys are at in terms of penetrating Pepsi's. I believe it was 50,000 Pepsi-owned energy coolers you guys mentioned on one of the last calls. Just kinda want an update on there, if you can provide it. Yeah. We've eliminated some of those specific details that we were due to competitive competition coming in the category vigorously. We still have a big presence and a big push for coolers. That's a big opportunity for us, gaining more cold placements. We see that opportunity. The number of coolers we're investing, we made a decision not to disclose that specific number on a go-forward basis. We are investing in coolers. We're investing in additional placements, off-shelf racks, and those types. We think there's a lot of opportunities. In the past, on the last call, we said we were working towards and planning to have placed by the end of the year of approximately 20,000 Celsius branded coolers. We're not gonna provide any additional color on that. All right, understood. I appreciate you taking the time to answer my questions. Congrats on the great quarter. Excellent. Thank you. Thank you. Your next question is coming from Sean McGowan from Roth. Your line is live. Thank you, guys. I had a couple of questions. One on freight. Have you seen term, and is any of the higher cost of freight? Hello? Sean, you there? You seem to have lost the signal. Yeah, I must be a problem with the signal. I'll just talk to you guys later. Bye. Okay. Thank you. That concludes today's conference. We have reached the end of our question and answer session. I'll now turn the call over to management for closing remarks. Please go ahead. Thank you, Matt. Thank you, everyone. On behalf of the company, I'd like to thank everyone for their continued interest and support. Our results demonstrate our products are gaining considerable momentum. We're capitalizing on today's global health and wellness trends and the transformation taking place in today's energy drink category. Our active lifestyle position is a global position with mass appeal. We're building upon our core business, leveraging opportunities and deploying best practices. We have a winning portfolio, strategy, and team in a rapidly growing market that consumers want. I'd like to thank all our investors for their continued support and confidence in our team. The company will be attending several upcoming investor conferences the week of May 22nd, including Goldman Sachs and B. Riley. In June, we will be attending Stifel, Evercore, and Jefferies investor conferences, and we look forward to meeting and seeing many of you there. Thank you, everyone, for your interest in Celsius. Stay healthy and live fit. Thank you, everyone. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.