What happened

Shares of Celsius Holdings (NASDAQ:CELH) were soaring 28% higher in afternoon trading Thursday after the fitness drink maker reported record second-quarter earnings.

So what

The maker of the Celsius fitness drink reported that revenue surged 86% in the quarter to $30 million, as domestic revenue jumped 44% and international revenue surged 144% from the year-ago period.

Woman drinking beverage in sunlight

Image source: Getty Images.

Celsius also said that it had secured additional distribution agreements with partners in the networks of Anheuser-Busch InBev, PepsiCo, Keurig Dr Pepper, and MillerCoors, bringing its total to more than 135 regional direct-store delivery partners.

Now what

While Celsius has been on a tear, more than tripling in value in 2020, and rising over 550% from its March lows, is there more than meets the eye?

Celsius neglected to mention in its press release (though it did disclose it in the 10-Q) that of the $13.9 million increase in revenue this quarter, $8.5 million, or 61%, came from its acquisition of Func Foods last October. That means organic revenue grew 39% year over year, not too shabby, but it's not the meteoric rise the company is depicting.

Also, Celsius engaged in a bit of name dropping with those mega beverage producers, but a closer read shows it's not the big-name companies it's partnering with, rather just companies in their networks. Again, it's a great opportunity for the small cap to expand, but Celsius shouldn't need to gild the lily if things are as good as it says.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.