It's not just the water that's sparkling at Celsius Holdings (CELH 0.72%) these days. The fast-growing distributor of functional beverages posted blowout financial results after Tuesday's market close, and it could be a long time before this fizzy fave goes flat again.

The stock was already up 144% since bottoming out exactly three months ago. Triple-digit revenue growth and a bar-raising deal with pop star PepsiCo can do wonders for a stock's effervescence. With Celsius' unique proposition -- a line of flavored canned beverages that claim to help active drinkers burn calories by improving near-term metabolism rates -- this could be a financial workout that works out. 

A golden ticket

It's not just Celsius stock making big moves. Revenue soared 137% to $154 million in the second quarter, and that's actually underselling the bubbly octane. Celsius has been pulling back its distribution overseas, and international sales shrank from 20% in the first half of last year to just 6% of the revenue mix this time around. North America sales -- again, accounting for 94% of this year's business -- skyrocketed 171% for the three months ending in June.

Margins contracted, but net income still popped nearly 12-fold to hit $9.2 million or $0.12 a share. This is the third quarter in a row that Celsius has landed well ahead of Wall Street's bottom-line forecast, as analysts were only holding out hope for earnings of $0.08 a share. Those same pros were also likely feeling generous in targeting 129% top-line growth.

Accelerating growth is a thing of beauty, especially when you don't see it coming. Revenue has now risen 150% through the first half of this year when stacked against the first six months of last year. Celsius is revving up in a hurry:

  • 2019: 43% revenue growth.
  • 2020: 74% revenue growth.
  • 2021: 140% revenue growth.

This kind of heady growth isn't sustainable, and no one expects Celsius to come through with 150% revenue growth for the second half of this year. However, there's clearly something to Celsius defining a new category at the intersection of functional and energy beverages. 

What if it's still early in the disruption? Last week Celsius struck a strategic partnership with PepsiCo. The beverage behemoth invested $550 million in Celsius convertible preferred stock, giving it an 8.5% stake in the company and a seat on the board. PepsiCo is now Celsius' primary distribution partner in the U.S. and its preferred option internationally. Celsius has done a great job of growing its business, at least stateside. Now it has a globetrotting icon that will make it easier to scale and gobble up market share worldwide. 

The current quarter is already off to a strong start. Nielsen scan data from mid-July shows Celsius sales up 143% year over year for the four previous weeks. The energy category is only growing at an 8% clip. Celsius is shaking things up in the sleepy realm of beverage stocks. The risks are real in a world of fickle tastes, but you don't bet against monster growth when some catalysts for future gains are just starting to carbonate. Celsius has had a spectacular run over the past three months, but things could be just getting started.