Shares of beverage company Celsius Holdings (NASDAQ:CELH) surged on Thursday after the company reported record revenue for the third quarter of 2020. While analysts expected strong growth, results outpaced expectations. As of 11 a.m. EST, the stock was up 12% but had been up 15% earlier in the session to hit 13-year highs. And year to date, it's up almost 500%.
For Q3, Celsius Holdings reported revenue of $36.8 million. For perspective, it only reported revenue of $20.4 million in the same quarter last year, meaning Q3 revenue was up 80% year over year. The revenue increase is largely attributable to the company's expanded distribution. Last quarter, its products were available in 74,000 retail outlets. As of this quarter, its products are in over 79,000 retail outlets.
Celsius also reported a record gross profit of $8.9 million, which was more than double what it reported last year. Net income slipped slightly, but this is due to amortization expenses and not a fundamental business issue. If there was something to be concerned about, it would have showed up in operating expenses. But operating expenses as a percentage of revenue actually improved during Q3.
This has been a great year so far for Celsius Holdings. Through the first nine months of 2020, revenue is up 86% from the comparable period of 2019. While this is to be expected with expanded distribution, it's also a bit of a pleasant surprise. That's because, before the pandemic, a large part of the company's sales came from gyms and health clubs. These have been closed for much of the year. However, it appears it's gained enough brand recognition that its customers are willing to go out of their way to make a purchase, which is an encouraging sign for this growth stock.