e.l.f. Beauty Announces Third Quarter Fiscal 2026 Results

Key Terms

basis points financial

Basis points are a way to measure small changes in interest rates or percentages, where one basis point equals 0.01%. For example, if a loan's interest rate increases by 50 basis points, it's gone up by 0.50%. They help people understand tiny differences in rates that can add up over time, making financial comparisons clearer.

selling, general and administrative financial

Selling, general and administrative (SG&A) expenses are the day-to-day costs a company incurs to run the business that aren’t directly tied to making a product or delivering a service, such as salaries for sales and office staff, rent, marketing, and office supplies. For investors, SG&A shows how much a company spends to support operations and grow sales—like the overhead on a household budget—so rising or unusually high SG&A can squeeze profits even if sales are steady.

adjusted sg&a financial

Selling, General & Administrative (SG&A) expenses are a company’s routine overheads like salaries, rent, marketing and office costs; “adjusted SG&A” removes one-time or unusual items (for example restructuring charges, legal settlements or large noncash stock awards) to show the ongoing cost of running the business. Investors use adjusted SG&A like a cleaned-up household budget to compare underlying efficiency across periods and companies and to judge whether management is controlling recurring expenses.

adjusted net income financial

Adjusted net income is a company's reported profit after removing unusual, one-time, or non-operational items so the number reflects the business’s regular earning power. Investors use it like a cleaned-up scorecard — similar to judging a player’s season performance without a few fluke games — to compare companies or assess trends without being misled by rare gains or losses that won’t affect future cash flow.

diluted earnings per share financial

Diluted earnings per share is a measure of a company's profit allocated to each share of stock, taking into account all possible shares that could be created through stock options, convertible bonds, or other securities. It shows the lowest possible earnings per share if all these potential shares were issued, helping investors understand the worst-case scenario for their ownership. This figure matters because it provides a more conservative view of a company's profitability per share.

adjusted diluted earnings per share financial

Adjusted diluted earnings per share is the company’s net profit per share after accounting for potential extra shares (from options or convertible securities) and removing one‑time or unusual items so the number reflects ongoing business results. Think of it like timing a runner’s steady pace after excluding a few unexpected stops; it gives investors a clearer view of sustainable profit available to each share. Investors use it to compare companies and judge underlying profitability and valuation without short‑term distortions.

adjusted ebITDA financial

Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.

adjusted effective tax rate financial

The adjusted effective tax rate is the percentage of a company’s pre-tax income that it would normally pay in taxes after removing one-time or unusual items, giving a clearer view of its ongoing tax burden. Like clearing away exceptional expenses to see your regular monthly bill, this adjusted rate helps investors compare companies, forecast future profits and cash flow, and value a business without one-off swings distorting the picture.

– Delivered 38% Net Sales Growth –

– Raises Fiscal 2026 Outlook –

OAKLAND, Calif.--(BUSINESS WIRE)-- e.l.f. Beauty (NYSE: ELF) today announced results for the three and nine months ended December 31, 2025.

“Our Q3 results, which included 130 basis points of market share gains for our namesake e.l.f. Cosmetics brand and a record-breaking launch of rhode in Sephora in the U.K., are a continuation of the consistent, category-leading growth we’ve delivered over the past 28 quarters,” said Tarang Amin, e.l.f. Beauty’s Chairman and Chief Executive Officer. “Our value proposition, powerhouse innovation and disruptive marketing engine continue to fuel our brands. We remain confident in our ability to grow market share and deliver best-in-class growth in beauty, as reflected by our raised fiscal 2026 outlook.”

Three Months Ended December 31, 2025 Results

For the three months ended December 31, 2025, compared to the three months ended December 31, 2024:

• Net sales increased 38% to $489.5 million, primarily driven by growth in both our retailer and e-commerce channels, in the US and internationally.
• Gross margin decreased approximately 30 basis points to 71%, primarily driven by higher tariff costs, partially offset by benefits from pricing and mix.
• Selling, general and administrative (“SG&A”) expenses increased $61.7 million to $280.0 million. Adjusted SG&A (SG&A excluding the items identified in the reconciliation table below) increased $56.3 million to $249.2 million. The increase in SG&A is primarily related to an increase in marketing, merchandising and distribution costs, compensation and benefits, depreciation and amortization and professional fees.
• Other (expense) income, net decreased from $5.3 million of other expense to $1.3 million of other expense, primarily driven by an increase in foreign currency losses in the period attributable to currency rate fluctuation.
• Net income was $39.4 million on a GAAP basis. Adjusted net income (net income excluding the items identified in the reconciliation table below) was $74.5 million.
• Diluted earnings per share were $0.65 on a GAAP basis. Adjusted diluted earnings per share (diluted earnings per share calculated with adjusted net income excluding the items identified in the reconciliation table below) were $1.24.
• Adjusted EBITDA (EBITDA excluding the items identified in the reconciliation table below) was $123.0 million, or 25% of net sales, up 79% year over year.

Nine Months Ended December 31, 2025 Results

For the nine months ended December 31, 2025, compared to the nine months ended December 31, 2024:

• Net sales increased 21% to $1,187.2 million, primarily driven by growth in both our retailer and e-commerce channels, in the US and internationally.
• Gross margin decreased approximately 124 basis points to 70%, primarily driven by higher tariff costs, partially offset by benefits from pricing and mix.
• Selling, general and administrative (“SG&A”) expenses increased $122.0 million to $706.9 million. Adjusted SG&A (SG&A excluding the items identified in the reconciliation table below) increased $102.2 million to $619.8 million. The increase in SG&A is primarily related to an increase in marketing, merchandising and distribution costs, compensation and benefits, depreciation and amortization, professional fees.
• Other (expense) income, net changed from $1.3 million of other expense to $1.8 million other income, primarily driven by an increase in foreign currency gains in the period attributable to currency rate fluctuation.
• Net income was $75.7 million on a GAAP basis. Adjusted net income (net income excluding the items identified in the reconciliation table below) was $166.5 million.
• Diluted earnings per share were $1.28 on a GAAP basis. Adjusted diluted earnings per share (diluted earnings per share calculated with adjusted net income excluding the items identified in the reconciliation table below) were $2.81.
• Adjusted EBITDA (EBITDA excluding the items identified in the reconciliation table below) was $276.3 million, or 23% of net sales, up 28% year over year.

Liquidity

As of December 31, 2025, the Company had $196.8 million in cash and cash equivalents, and $816.7 million of long-term debt, as compared to $73.8 million in cash and cash equivalents and $154.1 million of long-term debt outstanding as of December 31, 2024.

Updated Fiscal 2026 Outlook

The Company is providing the following updated outlook for fiscal 2026. The updated outlook for fiscal 2026 reflects an expected 22-23% year-over-year increase in net sales, as compared to an expected 18-20% increase previously.

	Fiscal 2025 Actuals		Previous Fiscal 2026 Outlook		Current Fiscal 2026 Outlook
Net sales	$1,314 million		$1,550-1,570 million		$1,600-1,612 million
Adjusted EBITDA	$297 million		$302-306 million		$323-326 million
Adjusted effective tax rate	21%		23%		23%
Adjusted net income	$198 million		$165-168 million		$180-183 million
Adjusted diluted earnings per share	$3.39		$2.80-2.85		$3.05-3.10
Diluted shares outstanding	58 million		59 million		59 million

Webcast Details

The Company will hold a webcast to discuss the results from its third quarter fiscal 2026 today, February 4, 2026, at 4:30 p.m. Eastern Time. The webcast will be broadcast live at https://investor.elfbeauty.com/stock-and-financial/events-and-presentations. For those unable to listen to the live broadcast, an archived version will be available at the same location.

About e.l.f. Beauty

e.l.f. Beauty (NYSE: ELF) is fueled by a belief that anything is e.l.f.ing possible. e.l.f. is a different kind of company that disrupts norms, shapes culture and connects communities, through positivity, inclusivity and accessibility. The mission is clear: to make the best of beauty accessible to every eye, lip and face. e.l.f. Beauty and its brands, e.l.f. Cosmetics, e.l.f. SKIN, Keys Soulcare, Well People, Naturium and rhode, are led by purpose, driven by results and elevated by superpowers. e.l.f. Beauty offers e.l.f. clean and vegan products, all double-certified by PETA and Leaping Bunny as cruelty free, and proudly stands as the first beauty company with Fair Trade Certified™ facilities. With a kind heart at the center of e.l.f.’s ethos, the company donates 2% of net profits to organizations that make positive impacts.

Learn more at https://www.elfbeauty.com/

Note Regarding non-GAAP Financial Measures

This press release includes references to non-GAAP measures, including adjusted EBITDA, adjusted SG&A, adjusted net income and adjusted diluted earnings per share. The Company presents these non-GAAP measures because its management uses them as supplemental measures in assessing its operating performance, and believes they are helpful to investors, securities analysts and other interested parties in evaluating the Company’s performance. The non-GAAP measures included in this press release are not measurements of financial performance under GAAP and they should not be considered as alternatives to or substitutes for measures of performance derived in accordance with GAAP. In addition, these non-GAAP measures should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring items. These non-GAAP measures have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing the Company’s results as reported under GAAP. The Company’s definitions and calculations of these non-GAAP measures are not necessarily comparable to other similarly titled measures used by other companies due to different methods of calculation.

Adjusted EBITDA excludes expense or income related to stock-based compensation, loss on extinguishment of debt and other non-cash and non-recurring items. Such other non-cash or non-recurring items include amortization of internal-use software costs related to cloud applications, acquisition related costs, and ERP implementation costs.

Adjusted SG&A excludes expense related to stock-based compensation and other non-recurring items. Such other non-recurring items include other non-recurring ERP implementation costs and acquisition related costs.

Adjusted effective tax rate is the tax rate when excluding the pre-tax impact of expense or income related to stock-based compensation, other non-cash and non-recurring items, amortization of acquired intangible assets, as well as the related tax impact for these items, calculated utilizing the statutory rate for where the impact was incurred.

Adjusted net income excludes expense related to stock-based compensation, loss on extinguishment of debt, other non-recurring items, amortization of acquired intangible assets and the tax impact of the foregoing adjustments. Such other non-recurring items include other non-recurring ERP implementation costs and acquisition related costs.

Forward-looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws, including those statements relating to the Company’s outlook for Fiscal 2026 under “Fiscal 2026 Outlook” above and those statements that we remain confident in our ability to grow market share and deliver best-in-class growth in beauty, as reflected by our raised fiscal 2026 outlook. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, actual results and the timing of selected events may differ materially from those expectations. Factors that could cause actual results to differ materially from those in the forward looking statements include, among other things, the risks and uncertainties that are described in the Company's most recent Annual Report on Form 10-K, as updated from time to time in the Company's SEC filings, as well as the Company’s ability to effectively compete with other beauty companies; the Company’s ability to successfully introduce new products; the Company’s ability to attract new retail customers and/or expand business with its existing retail customers; the Company’s ability to optimize shelf space at its key retail customers; the loss of any of the Company’s key retail customers or if the general business performance of its key retail customers declines; disruptions to our business resulting from acquisitions or investments, such as our acquisition of rhode; and the Company’s ability to effectively manage its SG&A and other expenses. Potential investors are urged to consider these factors carefully in evaluating the forward-looking statements. These forward-looking statements speak only as of the date hereof. Except as required by law, the Company assumes no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated statements of operations (unaudited) (in thousands, except share and per share data)
		Three months ended December 31,								Nine months ended December 31,
		2025				2024				2025				2024
Net sales		$	489,505			$	355,320			$	1,187,180			$	980,872
Cost of sales			142,010				102,015				356,286				282,225
Gross profit			347,495				253,305				830,894				698,647
Selling, general and administrative expenses			279,955				218,220				706,929				584,936
Operating income			67,540				35,085				123,965				113,711
Other (expense) income, net			(1,325	)			(5,278	)			1,834				(1,300	)
Interest expense, net			(12,351	)			(3,527	)			(24,136	)			(10,953	)
Loss on extinguishment of debt			—				—				(674	)			—
Income before provision for income taxes			53,864				26,280				100,989				101,458
Income tax provision			(14,488	)			(9,019	)			(25,306	)			(17,622	)
Net income		$	39,376			$	17,261			$	75,683			$	83,836
Net income per share:
Basic		$	0.66			$	0.31			$	1.30			$	1.49
Diluted		$	0.65			$	0.30			$	1.28			$	1.43
Weighted average shares outstanding:
Basic			59,294,883				56,358,694				58,001,083				56,227,037
Diluted			60,190,799				58,353,219				59,159,308				58,463,343

e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated balance sheets (unaudited) (in thousands, except share and per share data)
		December 31, 2025				March 31, 2025				December 31, 2024
Assets
Current assets:
Cash and cash equivalents		$	196,821			$	148,692			$	73,845
Accounts receivable, net			190,304				126,010				187,744
Inventory, net			220,622				187,170				214,786
Prepaid expenses and other current assets			93,842				78,688				82,702
Total current assets			701,589				540,560				559,077
Property and equipment, net			44,836				28,787				19,878
Intangible assets, net			564,243				207,698				212,047
Goodwill			852,768				340,582				340,582
Other assets			160,284				130,548				133,250
Total assets		$	2,323,720			$	1,248,175			$	1,264,834
Liabilities and stockholders' equity
Current liabilities:
Current portion of long-term debt		$	30,000			$	—			$	100,250
Accounts payable			73,980				72,180				65,293
Accrued expenses and other current liabilities			150,317				104,876				128,364
Total current liabilities			254,297				177,056				293,907
Long-term debt			816,701				256,676				154,061
Deferred tax liabilities			16,737				3,812				493
Long-term operating lease obligations			67,477				48,721				48,116
Other long-term liabilities			6,662				1,055				870
Total liabilities			1,161,874				487,320				497,447
Stockholders' equity:
Common stock, par value of $0.01 per share; 250,000,000 shares authorized as of December 31, 2025, March 31, 2025 and December 31, 2024; 59,052,239, 55,730,037 and 56,398,608 shares issued and outstanding as of December 31, 2025, March 31, 2025 and December 31, 2024, respectively			589				556				563
Additional paid-in capital			1,266,793				942,025				977,141
Accumulated other comprehensive income			1,028				521				183
Accumulated deficit			(106,564	)			(182,247	)			(210,500	)
Total stockholders' equity			1,161,846				760,855				767,387
Total liabilities and stockholders' equity		$	2,323,720			$	1,248,175			$	1,264,834

e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated statements of cash flows (unaudited) (in thousands)
		Nine months ended December 31,
		2025				2024
Cash flows from operating activities:
Net income		$	75,683			$	83,836
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization			53,033				30,899
Non-cash lease expense			8,253				7,010
Stock-based compensation expense			69,219				56,951
Amortization of debt issuance costs and discount on debt			962				413
Deferred income taxes			15,055				(4,153	)
Acquisition-related seller expenses			(47,100	)			—
Loss on extinguishment of debt			674				—
Other, net			2,416				844
Changes in operating assets and liabilities:
Accounts receivable			(32,611	)			(65,067	)
Inventory			7,405				(23,652	)
Prepaid expenses and other assets			(53,537	)			(77,534	)
Accounts payable and accrued expenses			9,807				(5,691	)
Other liabilities			794				(6,116	)
Net cash provided by (used in) operating activities			110,053				(2,260	)
Cash flows from investing activities:
Acquisition, net of cash acquired			(581,682	)			—
Purchase of property and equipment			(20,564	)			(7,461	)
Other, net			(704	)			(278	)
Net cash used in investing activities			(602,950	)			(7,739	)
Cash flows from financing activities:
Proceeds from revolving line of credit			50,000				—
Repayment of revolving line of credit			(50,000	)			—
Proceeds from long-term debt			600,000				—
Repayment of long-term debt			(7,500	)			(8,062	)
Debt issuance costs paid			(6,891	)			—
Repurchase of common stock			(49,987	)			(17,076	)
Cash received from issuance of common stock			5,301				917
Other, net			—				(57	)
Net cash provided by (used in) financing activities			540,923				(24,278	)
Effect of exchange rate changes on cash and cash equivalents			103				(61	)
Net increase (decrease) in cash and cash equivalents			48,129				(34,338	)
Cash and cash equivalents - beginning of period			148,692				108,183
Cash and cash equivalents - end of period		$	196,821			$	73,845

e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP net income to non-GAAP adjusted EBITDA (unaudited) (in thousands)
		Three months ended December 31,						Nine months ended December 31,
		2025			2024			2025			2024
Net income		$	39,376		$	17,261		$	75,683		$	83,836
Interest expense, net			12,351			3,527			24,136			10,953
Income tax (benefit) provision			14,488			9,019			25,306			17,622
Depreciation and amortization			21,513			11,599			53,033			30,899
EBITDA		$	87,728		$	41,406		$	178,158		$	143,310
Stock-based compensation			29,874			22,339			69,219			56,951
Loss on extinguishment of debt (a)			—			—			674			—
Other non-cash and non-recurring items (b)			5,425			4,966			28,276			15,213
Adjusted EBITDA		$	123,027		$	68,711		$	276,327		$	215,474

(a) Loss on extinguishment of debt includes the write-off of existing debt issuance costs and certain fees paid related to the amended credit agreement.

(b) Represents other non-cash or non-recurring items, which include amortization of internal-use software costs related to cloud applications, acquisition related costs, and ERP implementation costs.

e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP SG&A to non-GAAP adjusted SG&A (unaudited) (in thousands)
	Three months ended December 31,								Nine months ended December 31,
	2025				2024				2025				2024
Selling, general and administrative expenses	$	279,955			$	218,220			$	706,929			$	584,936
Stock-based compensation		(29,860	)			(22,303	)			(69,208	)			(56,905	)
Other non-recurring items (a)		(873	)			(3,036	)			(17,961	)			(10,466	)
Adjusted selling, general and administrative expenses	$	249,222			$	192,881			$	619,760			$	517,565

(a) Represents other non-recurring ERP implementation costs and acquisition related costs.

e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP net income to non-GAAP adjusted net income (unaudited) (in thousands, except share and per share data)
		Three months ended December 31,								Nine months ended December 31,
		2025				2024				2025				2024
Net income		$	39,376			$	17,261			$	75,683			$	83,836
Stock-based compensation			29,874				22,339				69,219				56,951
Other non-recurring items (a)			1,730				3,036				19,552				10,466
Loss on extinguishment of debt (b)			—				—				674				—
Amortization of acquired intangible assets (c)			11,133				4,349				24,354				13,047
Tax Impact (d)			(7,637	)			(3,952	)			(22,956	)			(11,954	)
Adjusted net income		$	74,476			$	43,033			$	166,526			$	152,346
Weighted average number of shares outstanding – diluted			60,190,799				58,353,219				59,159,308				58,463,343
Adjusted diluted earnings per share		$	1.24			$	0.74			$	2.81			$	2.61

(a) Represents other non-recurring ERP implementation costs and acquisition related costs.

(b) Loss on extinguishment of debt includes the write-off of existing debt issuance costs and certain fees paid related to the amended credit agreement.

(c) Represents amortization expense of acquired intangible assets consisting of customer relationships and trademarks.

(d) Represents the tax impact of the above adjustments.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20260204234992/en/

Investors:

KC Katten

VP, Corporate Development & Investor Relations

kkatten@elfbeauty.com

Media:

Sam Critchell

VP, Corporate Communications

scritchell@elfbeauty.com

Source: e.l.f. Beauty