ELF 10-K & 10-Q changes, risk factors and insider trading

We have a process for the development, evaluation and validation of our new product concepts. Nonetheless, each new product launch involves risks, as well as the possibility of unexpected consequences. For example, the acceptance of new product launches and sales to our retail customers may not be as high as we anticipate,anticipate due to lack of acceptance of the products themselves or their price,price or limited effectiveness of our marketing strategies.

We have relatively low brand awareness among consumers when compared to legacy beauty brands, and maintaining and enhancing the recognition and reputation of our brands is critical to our business and future growth. Many factors, some of which are beyond our control, are important to maintaining our reputation and brands. These factors include our ability to comply with ethical,various environmental, social, governance, product, labor and environmentalother ethical standards. Any actual or perceived failure in compliance with such standards could damage our reputation and brands.

Our historical growth may not be indicative of our future performance as we may not be successful in executing our growth strategy, and, even if we achieve our strategic imperatives, we may not be able to sustain profitability. In future periods, our revenue could decline,decline or grow more slowly than we expect. We also may incur significant losses in the future for a number of reasons, including the following risks and the other risks described in this report, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors:

•our products may be the subject of regulatory actions, including, but not limited to, actions by the FDA,US Food and Drug Administration (the “FDA”), the Federal Trade Commission (the “FTC”) and the Consumer Product Safety Commission (the “CPSC”) in the United States and comparable foreign authorities outside the United States;

Acquisitions or investments, such as our potential acquisition of rhode,HRBeauty LLC (“rhode”), could disrupt our business and harm our financial condition.

If we are unable to address these difficulties and challenges or other problems encountered in connection with any acquisition or investment, we might not realize the anticipated benefits of that acquisition or investment, and we might incur unanticipated liabilities or otherwise suffer harm to our business generally. For example, if we consummate the acquisition of HRBeauty LLC (“rhode”) and the integration of rhode's business with our business is more difficult, costly or time-consuming than expected, we may not fully realize the expected benefits of our acquisition of rhode, which may adversely affect our business, financial condition and results of operations. See also “Risk factors related to our acquisition of rhode.”

To the extent that we pay the consideration for any acquisitions or investments in cash, it reduces the amount of cash available to us for other purposes. Acquisitions or investments can also result in dilutive issuances of our equity securities or the incurrence of debt, contingent liabilities, amortization expenses, increased interest expenses or impairment charges against goodwill on our consolidated balance sheet, any of which could have a material adverse effect on our business, financial condition and results of operations. For example, in connection with our acquisition of Naturium, we paid total consideration of approximately $333$333.0 million using an incremental term loan under our existing credit facility, borrowings on our existing revolving facility, cash on the balance sheet and approximately $58$57.8 million of our stock. In connection with our acquisition of rhode, we paid total cash consideration of approximately $590.1 million using the proceeds from an incremental term loan under our existing credit facility, borrowings on our existing revolving facility, and cash on the balance sheet, as well as approximately $300.3 million of our stock, and a potential earnout initially valued at $7.1 million.

Risk factors related to our acquisition of rhode.rhode

We have made certain assumptions relating to our potential acquisition of rhode that may prove to be materially inaccurate.

We have made certain assumptions relating to our potential acquisition of rhode that may prove to be inaccurate, including as the result of the failure to realize the expected benefits of the acquisition, failure to realize expected revenue growth rates and higher than expected operating, transaction and integration costs, as well as general economic and business conditions that adversely affect rhode. If we consummate the acquisition of rhode and the assumptions are incorrect, our business, financial condition and results of operations may be materially adversely affected.

If we consummate the acquisition of rhode, weWe must continue to retain, motivate and recruit executives, other key employees and service providers and certain personnel from rhode following the acquisition, including Hailey Bieber, the founder of rhode, who is essential to the rhode brand and who is prominently involved in the marketing of the rhode brand to consumers. rhode's performance will be substantially dependent on the performance of certain of its key employees, management and other certain personnel, specifically Hailey Bieber. A failure by us to attract, retain and motivate key employees and certain personnel of rhode, in particular Hailey Bieber, could have a negative impact on rhode’s business, our ability to successfully complete the acquisition of rhode, and our business, financial condition and results of operations.

Furthermore, if we successfully acquire rhode and key employees and certain personnel depart, choose notto tono longer be employees or advisors of rhode or our company followingand the acquisition,depart, or are at risk of departing due to issues including the uncertainty of full integration or a desire not to becomebe employees or advisors of our company, we may incur significant costs to retain such individuals or to identify, hire and retain replacements for departing rhode employees and personnel. Additionally, our failure to retain these individuals may result in the loss of significant expertise and branding opportunities relating to the business of rhode, and our ability to realize the anticipated benefits of the acquisition of rhode may be adversely affected.

AdditionalChanges in the US tariffsand orinternational othertrade policies, including tariffs, trade restrictions placed on imports,and retaliatory trade measures taken by other countries and resulting trade wars may have a material adverse impact on theour Company’sbusiness, financial condition and results of operations.

Starting in July 2018, the US government announced a series of lists covering thousands of categories of Chinese origin products subject to US tariffs in addition to the tariffs that have historically applied to such products. The majority of our products are sourced and manufactured in China and have been subject to a US 25% tariff since May 2019. InBeginning Marchin and Aprilearly 2025, the TrumpUS administration announced a series of additional tariffs on most products from countries worldwide, including higher tariffs on substantially all products of Chinese origin. Since then, the TrumpUS administration has increased, reduced or temporarily paused some of the increased tariffs. WeOn cannotFebruary predict20, whether such reductions will remain in place or pauses will be extended or will lapse, whether2026, the TrumpUS Supreme Court invalidated tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”). Following this ruling, the US administration willinitiated new tariffs at different rates under alternative legislative powers, which increases the uncertainty around tariffs. The current US administration may continue to increaseimpose tariffs,additional ortariffs whetherunder US trade laws. Although certain tariffs were invalidated, the Trumppotential administrationavailability, willtiming, enterand intoamount agreementsof any refunds associated with countriesthe toruling reduceremains tariffshighly Nonetheless,uncertain. asGiven athe resultuncertainty regarding the scope and duration of the additionalcurrent USand tariffspotential announcedtariffs, sinceas earlywell 2025,as the Company will raise prices globallypotential for all products sold, which could result in the loss of consumers and materially and adversely affect our business, financial condition and results of operations. The Company may also seek to shift production outside of China, resulting in significant costs and disruption to the Company’s operations and materially and adversely affecting its, costs, sales, business, financial condition and results of operations. Additional tariff increases oradditional trade restrictions imposedactions by the United States couldor materiallyother adversely affectcountries, the specific impact to our business, results of operations ofand thefinancial Company'sconditions USis business.not Wecertain cannotbut predict whether these policies will continue or if new policies willcould be enacted; however, we could experience a material adverse effect on our business, financial condition and results of operations if these or other incremental tariffs go into effect.material.

There is also a concern that the imposition of additional tariffs by the United States could result in “buy national” and similar policies or the adoption of tariffs by China and other countries, leading to a global trade war. Trade restrictions implemented by the United States, China, Canada, the UK,United Kingdom (the “UK”), the European Union (the “EU”) or any of the other jurisdictions in which we conduct significant business in connection with a global trade war couldmay resultaffect inour ussuppliers’ raisingability to source products efficiently or create other supply chain disruptions, impacting the prices furtherof and supply of our products. We may not be able to fully or makingsubstantially changesmitigate tothe our operations, anyimpact of future tariffs and retaliatory trade action by other countries, which couldwould result inhave a material adverse effect on our financial condition andbusiness, results of operations.operations and financial performance.

As a company engaged in distribution on a global scale, our operations, including those of our third-party manufacturers, suppliers, brokers and delivery service providers, are subject to the risks inherent in such activities, including industrial accidents, environmental events, strikes and other labor disputes (such as the recent port strikestrikes in 2024), disruptions or delays in shipments,shipments (including delays at international and domestic ports), disruptions in information systems, product quality control, safety, licensing requirements and other regulatory issues, costs (including customs duties, quotas and tariffs), as well as naturalweather disasters (such as the January 2025 Southern California wildfiresevents and thenatural 2024 Atlantic hurricanes),disasters, pandemics (such as the coronavirus pandemic), border disputes, international conflict (such as the ongoingwar militaryin Iran, the broader conflict in Ukraine and the Middle East and Russia's invasion of Ukraine), acts of terrorism and other external factors over which we and our third-party manufacturers, suppliers, brokers and delivery service providers have no control. The loss of, or damage to, the manufacturing facilities or distribution centers of our third-party manufacturers, suppliers, brokers and delivery service providers could materially and adversely affect our business, financial condition and results of operations.

We depend heavily on global trade, including ocean container delivery, as well as fast boats, rail and air freight, to receive shipments of our products from our third-party manufacturers located in China and contracted third-party delivery service providers to deliver our products to our distribution facilities and logistics providers, and from there to our retail customers. Further, we rely on postal and parcel carriers for the delivery of products sold directly to consumers through our e-commerce websites and mobile applications. Interruptions,Interruptions to or failures in,in these delivery services could prevent the timely or successful delivery of our products. These interruptions or failures may be due to unforeseen events that are beyond our control or the control of our third-party delivery service providers, such as port congestion, container shortages, inclement weather, natural disasters, international conflict, labor unrest or other transportation disruptions. Certain of these events, such as the war in Iran, may also contribute to increased volatility in global oil prices, which could further increase transportation, manufacturing and other operating costs or disrupt transportation or distribution of our products or components of our products. In addition, port congestion, container shortages, inclement weather, natural disasters, international conflict, labor unrest or other transportation disruptions may increase the costs to supply or transport our products or the components of our products. If our products are not delivered on time or are delivered in a damaged state, retail customers and consumers may refuse to accept our products and have less confidence in our services. In addition, a vessel and container shortage globally could delay future inventory receipts and, in turn, could delay deliveries to our retailer customers and availability of products in our direct-to-consumer e-commerce channel. Such potential delays, additional transportation expenses and shipping disruptions could negatively impact our results of operations through higher inventory costs and reduced sales. Furthermore, the delivery personnel of contracted third-party delivery service providers act on our behalf and interact with our consumers personally. Any failure to provide high-quality delivery services to our consumers may negatively affect the shopping experience of our consumers, damage our reputation and cause us to lose consumers.

We use multiple third-party suppliers and manufacturers, primarily based in China, to source and manufacture the majority of our products. The ability of these third parties to supply and manufacture our products may be affected by competing orders placed by other persons and the demands of those persons. Further, we are subject to risks associated with disruptions or delays in shipments whether due to port congestion, container shortages, labor disputes (such as the recent port strikestrikes in 2024), product regulations and/or inspections or other factors, weather events, natural disasters or health pandemics, or other transportation disruptions. If we experience significant increases in demand or need to replace a significant number of existing suppliers or manufacturers, there can be no assurance that additional supply and manufacturing capacity will be available when required on terms that are acceptable to us, or at all, or that any supplier or manufacturer will allocate sufficient capacity to us in order to meet our requirements.

In addition, quality control problems, such as the use of ingredients and delivery of products that do not meet our quality control standards and specifications or comply with applicable laws or regulations could harm our business. The scope of such regulations is expanding,broad, including requirements for certain value chain considerations, such as end of lifeend-of-life management, requirements for recycled content or other content restrictions, and certain supply chain diligence practices.practices such as disclosure requirements related to certain conflict minerals. Compliance can be costly or result in us needing to reassess aspects of our operations and value chain, and any quality control problems could result in regulatory action, such as fines, restrictions on importation, products of inferior quality or product stock outages or shortages, harming our sales and creating inventory write-downs for unusable products.

Our success depends, in part, on our ability to attract and retain key employees, including our executive officers, senior management team and operations, finance, sales and marketing personnel. The labor markets in the United States, ChinaChina, the UK and the UK,India, where most of our employees are located, are hyper competitive, and attracting and retaining top talent requires significant organizational costs and attention. We are a relatively small company that relies on a few key employees, any one of whom would be difficult to replace, and because we are a small company, we believe that the loss of key employees may be more disruptive to us than it would be to a larger company. Our success also depends, in part, on our continuing ability to identify, hire, train and retain other highly qualified personnel. In addition, we may be unable to effectively plan for the succession of senior management, including our Chief Executive Officer. The loss of key personnel or the failure to attract and retain qualified personnel may have a material adverse effect on our business, financial condition and results of operations.

If the financial institutions with which we do business enter receivership or become insolvent in the future, there is no guarantee that the Department of the Treasury, the Federal Reserve and the FDIC will intercede to provide us and other depositors with access to balances in excess of the $250,000 FDIC insurance limit or that we would be able to: (i) access our existing cash, cash equivalents and investments; (ii) maintain any required letters of credit or other credit support arrangements; or (iii) adequately fund our business for a prolonged period of time or at all. Any of such events could have a material adverse effect on our current or projected business operations and results of operations and financial condition. In addition, if any parties with which we conduct business are unable to access funds pursuant to such instruments or lending arrangements with such a financial institution, such parties’ ability to continue to fund their business and perform their obligations to us could be adversely affected, which, in turn, could have a material adverse effect on our business, financial condition and results of operations.

As of March 31, 2025,2026, we had a total of $256.7$841.7 million of indebtedness, consisting of amounts outstanding under our credit facilities and finance lease obligations, and a total availability of $243.3 million under our Amended Revolving Credit Facility (as defined in Part II, Item 7 “Management’s discussion and analysis of financial condition and results of operations” under the heading “Description of indebtedness”). Our primary cash needs are for working capital, fixturing, retail product displaysdisplays, digital investments and digitaldebt investments.service. We have also used debt to finance acquisitions. Cash needs typically vary depending on strategic initiatives selected for the fiscal year, including investments in infrastructure, digital capabilities expansion within or to additional retailer store locations, and acquisitions.

We are subject to the income tax laws of the United States and several international jurisdictions. Changes in law and policy relating to taxes, including changes in administrative interpretations and legal precedence or changes ushered in by the Trump administration,precedents, could materially and adversely affect our business, financial condition and results of operations. Changes to tax laws or changes to the administrative or judicial interpretations of such laws may also apply with retroactive effect.

In addition, as we continue to expand our business internationally, the application and implementation of existing, new or future international laws could materially and adversely affect our business, financial condition and results of operations. Current economic and political conditions make tax rules in any jurisdiction, including those in which we operate, subject to significant change.

Exchange rate fluctuations may affect the costs that we incur in our operations. The main currencies to which we are exposed are the Euro, British pound, Chinese Renminbi (“RMB”), and Canadian dollar. The exchange rates between these currencies and the US dollar in recent years have fluctuated significantly and may continue to do so in the future. A depreciation of these currencies against the US dollar will decrease the US dollar equivalent of the amounts derived from foreign operations reported in our consolidated financial statements, and an appreciation of these currencies will result in a corresponding increase in such amounts. The cost of certain items, such as raw materials, manufacturing, employee compensation and benefits and transportation and freight, required by our operations may be affected by changes in the value of the relevant currencies.

Data security and privacy threats are accelerating in frequency and magnitude, are becoming increasingly difficult to detect,detect and come from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” personnel (such as through malfeasance, human error, theft or misuse), organized criminal threat actors, sophisticated nation states and nation-state supported actors. Some threat actors now engage and are expected to continue to engage in cyberattacks, including,including without limitation,limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities. During times of war and other major conflicts,conflicts (such as the war in Iran, the broader conflict in the Middle East and Russia's invasion of Ukraine), we and the third parties upon which we rely may be vulnerable to a heightened risk of these attacks, including retaliatory cyberattacks that could materially disrupt our systems and operations.

The tools and techniques used by threat actors to attack or access systems and data are constantly evolving and may not be recognized until or after being launched against a target. These tools can, in some cases, circumvent security controls, evade detection and remove forensic evidence. We may be unable to anticipate, detect, prevent, remediate or recover from future cybersecurity incidents, including attacks to our information systems and data. The rapid advancement of AI technologies has significantly increased the risks associated with cyberattacks, including as AI is integrated into our and any third party’s operations, products or services. As new and improved technologies and methodologies continue to become available to threat actors (for example, AI),actors, increased risks and currently unknown vulnerabilities could result in significant future expenditures related to our information systems, technology infrastructure and operations. Any material disruption of our systems, or the systems of our third-party service providers, could disrupt our ability to track, record and analyze the products that we sell and could negatively impact our operations, our reputation, shipment of goods, ability to process financial information and transactions and our ability to receive and process retail customer and e-commerce orders or engage in normal business activities.

The evolution of AI is occurring at a rapid pace. Our ability to compete effectively could be adversely impacted if competitors or other third parties incorporate AI into their businesses more rapidly, effectively or innovatively than we do. Successful, ethical, and responsible implementation of AI solutions will require significant investments in infrastructure, talent, governance, and ongoing monitoring mechanisms.

The use of AI may also heightenheightens cybersecurity, intellectual property, and data privacy risks, including unintended exposure, misuse,misuse or theft of proprietary, personal, or otherwise sensitive information.information, infringement of third-party rights and uncertainty regarding ownership of AI-generated outputs. In addition, evolving AI technologies and their novel use cases are developing faster than the applicable legal and regulatory frameworks. Future legislation, standards, or regulations — domestically and internationally — could impose substantial obligations, operational restrictions, penalties, or compliance costs on businesses using AI.

For example,Furthermore, in the European Union,EU, the EU Artificial Intelligence Act (“EU AI Act”), which establishes a comprehensive, risk-based governance framework for AI in the EU market, entered into force on August 1, 2024. While the majority of the substantive requirements will onlynot apply twountil yearsthe later,second half of 2026 (subject to proposed amendments to delay their implementation under the EU Digital Omnibus on AI Regulation Proposal), certain of itsthe EU AI Act’s provisions regarding prohibited AI systems and AI literacy obligations are already applicable. Once fully applicable, the EU AI Act will have a material impact on the way AI is regulated in the EU, and together with developing guidance and/ or decisions in this area, may affect our use of AI and our ability to provide, improve or commercialize our services, require additional compliance measures and changes to our operations and processes, result in increased compliance costs and potential increases in civil claims against us, and could adversely affect our business, operations and financial condition. It is possible that further new laws and regulations will be adopted in the United States and in other non-U.S.non-US jurisdictions as well, or that existing laws and regulations may be interpreted in ways that would affect the way in which we use AI and machine learning technology. Such additional regulations may impact our ability to develop, use and commercialize AI in the future.

We have in place technical and organizational measures designed to maintain the security and safety of critical proprietary, personal, employee, customer and financial data. However, despite these efforts, advances in technology, the pernicious ingenuity of criminals, new exposures via cryptography, acts or omissions by our employees, contractors or service providers or other events or developments could result in a compromise or breach in the security of confidential or personal data. We and our service providers may not be able to prevent third parties, including criminals, competitors, state-sponsored organizations, opportunistic hackers and hacktivists or others,parties from breaking into or altering our systems, disrupting business operations or communications infrastructure through denial-of-service attacks, attempting to gain access to our systems, information or monetary funds through phishing or social engineering campaigns, installing viruses or malicious software (including ransomware) on our e-commerce websites or mobile applications or devices used by our employees or contractors, or carrying out other activity intended to disrupt our systems or gain access to confidential or sensitive information in our or our service providers’ systems, and we may be vulnerable to attack, damage and interruption from computer viruses and malware (e.g., ransomware), malicious code, misconfigurations, bugs or other vulnerabilities in commercial software that is integrated into our (or our suppliers’ or service providers’) information technology systems, products or services. Further, there can also be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our information technology systems and data.

Furthermore, such third parties may engage in various other illegal activities using such information, including credit card fraud or identity theft, which may cause additional harm to us, our consumers and our brands. We also may be vulnerable to error or malfeasance by our own employees or other insiders. Third parties may attempt to fraudulently induce our or our service providers’ employees to misdirect funds or to disclose information in order to gain access to personal data we maintain about our consumers or website users. In addition, we have limited control or influence over the security policies or measures adopted by third-party providers of online payment services through which some of our consumers may elect to make payment for purchases at our e-commerce websites and mobile applications. Contracted third-party delivery service providers may also violate their confidentiality or data processing obligations and disclose or use information about our consumers inadvertently or illegally.

Furthermore, we are subject to diverse laws and regulations in the United States, the EU,EU and other international jurisdictions that require notification to affected individuals in the event of a breach involving personal information. These required notifications can be time-consuming and costly. Furthermore, failure to comply with these laws and regulations could subject us to regulatory scrutiny and additional liability. Although we maintain relevant insurance, we cannot be certain that our insurance coverage will be adequate for all breach related liabilities, that insurance will continue to be available to us on economically reasonable terms, or at all, or that the insurer will not deny coverage as to any future claim. The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could adversely affect our reputation, business, financial condition and results of operations. We may need to devote significant resources to protect against security breaches or to address problems caused by breaches, diverting resources from the growth and expansion of our business.

We currently source and manufacture the majority of our products from third-party suppliers and manufacturers in China.China Asand ofhave Marchover 31, 2025, we had 108100 employees in China. With the rapid development of the Chinese economy, the cost of labor has increased and may continue to increase in the future. Our results of operations will be materially and adversely affected if our labor costs, or the labor costs of our suppliers and manufacturers, increase significantly. In addition, we and our manufacturers and suppliers may not be able to find a sufficient number of qualified workers due to the intensely competitive and fluid market for skilled labor in China. Furthermore, pursuant to Chinese labor laws, employers in China are subject to various requirements when signing labor contracts, paying remuneration, determining the term of employees’ probation and unilaterally terminating labor contracts. These labor laws and related regulations impose liabilities on employers and may significantly increase the costs of workforce reductions. If we decide to change or reduce our workforce, these labor laws could limit or restrict our ability to make such changes in a timely, favorable and effective manner. Any of these events may materially and adversely affect our business, financial condition and results of operations.

Operating in China exposes us to political, legal and economic risks. In particular, the political, legal and economic climate in China, both nationally and regionally, is fluid and unpredictable. Our ability to operate in China may be adversely affected by changes in the United States and Chinese laws and regulations such as those related to, among other things, taxation, import and export tariffs, environmental regulations, land use rights, intellectual property, currency controls, network security, and safety laws including employee benefits, privacy, hygiene supervision and other matters. For example, in December 2021, the US Congress enacted the Uyghur Forced Labor Prevention Act (“UFLPA”) in an effort to prevent what it views as forced labor and human rights abuses in the Xinjiang Uyghur Autonomous Region (“XUAR”). If it is determined that our third-party suppliers and manufacturers mine, produce or manufacture our products wholly or in part from the XUAR,XUAR or are otherwise on the UFLPA Restricted Entities List, then we could be prohibited from importing such products into the United States. In addition, we may not obtain or retain the requisite legal permits to continue to operate in China, and costs or operational limitations may be imposed in connection with obtaining and complying with such permits. In addition, Chinese trade regulations are in a state of flux, and we may become subject to other forms of taxation, tariffs and duties in China. Currently, considerable uncertainty surrounds the future trade relationship between the United States and China. The US government has implemented significant changes to US trade policy with respect to China since 2018, including the most recent tariff increases introduced by the Trump administration. Given the recent volume of executive orders from the Trump administration, we cannot predict additional near-term changes in the US trade policy with China; however,however such changes may materially and adversely impact our business, financial condition and results of operations. Furthermore, the third parties we rely on in China may disclose our confidential information or intellectual property to competitors or third parties, which could result in the illegal distribution and sale of counterfeit versions of our products. If any of these events occur, our business, financial condition and results of operations could be materially and adversely affected.

•changes in political, regulatory, legal or economic conditions, including as a result of the 2024current presidential electionadministration and public health emergencies/epidemics;

In the United States, with the exception of color additives, the FDA does not currently require pre-market approval for products intended to be sold as cosmetics. However, the FDA may in the future require pre-market authorization for certain cosmetic products, establishments or manufacturing facilities. Moreover, such products could also be regulated as both drugs and cosmetics simultaneously, as the categories are not mutually exclusive. The statutory and regulatory requirements applicable to drugs are extensive and require significant resources and time to ensure compliance. For example, if any of our products intended to be sold as cosmetics were to be regulated as drugs, we might be required to conduct, among other things, clinical trials to demonstrate the safety and efficacy of these products. We may not have sufficient resources to conduct any required clinical trials or to ensure compliance with the manufacturing requirements applicable to drugs. If the FDA determines that any of our products intended to be sold as cosmetics should be classified and regulated as drug products and we are unable to comply with applicable drug requirements, we may be unable to continue to market those products. Any inquiry into the regulatory status of our cosmetics and any related interruption in the marketing and sale of these products could damage our reputation and image in the marketplace.

Additional state and federal requirements may be imposed on consumer products as well as cosmetics, cosmetic ingredients, or the labeling and packaging of products intended for use as cosmetics. For example, on December 29, 2022, Congress enacted the MoCRA.Modernization of Cosmetics Regulation Act of 2022 (“MoCRA”). MoCRA created new compliance requirements for manufacturers of cosmetic products in the United States and also significantly expanded the FDA's authority to oversee and regulate cosmetics. Under MoCRA, companies must comply with new requirements for cosmetics, such as new labeling requirements for certain products, safety substantiation, facility registration, product listing, adverse event reporting, good manufacturing practice (“GMP”) requirements and mandatory recalls. In addition, MoCRA provided the FDA with new enforcement authorities over cosmetics, such as the ability to initiate mandatory recalls and to obtain access to certain product records. ManyIn particular, the FDA has the ability to mandate a product recall in the event that there is a reasonable probability that a cosmetic product is adulterated or misbranded under applicable provisions of the requirementsFood, were originally scheduled to become applicable on December 29, 2023, with some of the requirements, such as those relating to labeling, scheduled to become applicable later in 2024Drug, and 2025;Cosmetic however,Act on(“FDCA”) Novemberand 8, 2023,where the FDA adviseddetermines there is a reasonable probability that it would not enforce the requirementsuse relatedof or exposure to such cosmetic product facility registration and cosmetic product listing until July 1, 2024 to provide regulated industry additional time to comply with the requirements. We satisfied the requirements related to cosmetic product facility registration and cosmetic product listing by the July 1, 2024 deadline. We are unable to ascertain at this time the full impact that complying with MoCRA will havecause on our business. Compliance with the new requirements may further increase the cost of manufacturing certain of our products and could have a materialserious adverse effecthealth onconsequences ouror business, financial condition and results of operations.death.

Our products are also subject to state laws and regulations, such as the California Safe Drinking Water and Toxic Enforcement Act, also known as “Prop 65,” and various state PFAS regulations, and failure to comply with such laws and regulations may also result in lawsuits and regulatory enforcement that could have a material adverse effect on our business, financial condition and results of operations. We are,have been, and may in the future be, involved in litigation related to such current and future federal and state laws and regulations.

In addition, in recent years, certain states have adopted or modified data privacy and security laws and regulations that may apply to our business. For example, the California Consumer Privacy Act (the “CCPA”) requires certain disclosures to California residents regarding a business’s data processing activities, affords California consumers rights with respect to their personal information (including the rights related to access to and deletion of personal information, and the right to opt out of certain disclosures of their personal information), and establishes significant penalties for noncompliance. Following this trend, several other states have enacted or are considering enacting data protection legislation that may impose significant obligations and restrictions. The enactment of such laws could create conflicting requirements, compliance with which could result in additional compliance costs. Thepotential effects of these lawsstates’ legislation are potentially significantfar-reaching and may require us to modify our data collection or processing practices and policies and to incur substantial costs and expenses in an effort to comply, and increaseit ouris potentialunclear exposurewhether, and if so how, the US Congress will respond to regulatorythese enforcementoverlapping, and/orstate-by-state litigation.enactments.

We are also subject, under the GDPR, to restrictions on cross-border transfers of personal data out of the European Economic Area (the “EEA”) and UK, where legal developments have created complexity and uncertainty regarding transfers of personal data outside the EEA and the UK, including to the United States. We rely on the standard contractual clauses (“SCCs”) to transfer data outside of the EEA/ UK in some situations; however, the Court of Justice of the European UnionEU has stated that reliance on the SCCs alone may not be sufficient, and we expect the existing legal complexity and uncertainty regarding international personal data transfers to continue. As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the SCCs cannot be used, and/or continue to take enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.

We are, and may in the future become, party to litigation, regulatory proceedings or other disputes. For example, we are currently parties to litigation as described in Note 99, “Commitments and Contingencies,” in the Notes to Consolidatedour Financialconsolidated Statementsfinancial statements included elsewhere in this Annual Report on Form 10-K. In general, claims made by or against us in disputes and other legal or regulatory proceedings can be expensive and time consuming to bring or defend against, requiring us to expend significant resources and divert the efforts and attention of our management and other personnel from our business operations. These potential claims include, but are not limited to, personal injury claims, class action lawsuits, intellectual property claims, privacy claims, employment litigation and regulatory investigations and causes of action relating to the advertising and promotional claims about our products. Any adverse determination against us in these proceedings, or even the allegations contained in the claims, regardless of whether they are ultimately found to be without merit, may also result in settlements, injunctions or damages that could have a material adverse effect on our business, financial condition and results of operations.

We rely on trademark, copyright, trade secret, patent and other laws protecting proprietary rights, nondisclosure and confidentiality agreements and other practices, to protect our brands and proprietary information, technologies and processes. Our primary trademarks include “e.l.f.,” “e.l.f. SKIN,” “Naturium,” “e.l.f. eyes lips face,” “Wellrhode,” People,“Naturium,” and “KeysWell Soulcare,People,” all of which are registered or have registrations pending in the United States and in many other countries or registries. Our trademarks are valuable assets that support our brands and consumers’ perception of our products.

Although we have existing and pending trademark registrations for our brands in the United States and in many of the foreign countries in which we operate, we may not be successful in asserting trademark or trade name protection in all jurisdictions. We also have not applied for trademark protection in all relevant foreign jurisdictions and cannot assure you that our pending trademark applications will be approved. Third parties may also attempt to register our trademarks abroad in jurisdictions where we have not yet applied for trademark protection, oppose our trademark applications domestically or abroad, or otherwise challenge our use of the trademarks. In the event that our trademarks are successfully challenged, we could be forced to rebrand our products in some parts of the world, which could result in the loss of brand recognition and could require us to devote additional resources to advertising and marketing new brands.

As we gain greater visibility and market exposure as a public company and otherwise, we also face a greater risk of being the subject of such claims and litigation. For these and other reasons, third parties may allege that our products or activities infringe, misappropriate, dilute or otherwise violate their trademark, patent, copyright or other proprietary rights. Defending against allegations and litigation could be expensive, occupy significant amounts of time, divert management’s attention from other business concerns and have an adverse impact on our ability to bring products to market. In addition, if we are found to infringe, misappropriate, dilute or otherwise violate third-party trademark, patent, copyright or other proprietary rights, our ability to use brands to the fullest extent we plan may be limited, we may need to obtain a license, which may not be available on commercially reasonable terms, or at all, or we may need to redesign or rebrand our marketing strategies or products, which may be expensive or may not be possible.

We also use third-party social media platforms as marketing tools. For example, we maintain Snapchat, Facebook, TikTok, X (formerly Twitter), Roblox, Twitch, Pinterest, Instagram and YouTube accounts. As e-commerce and social media platforms continue to rapidly evolve, we must continue to maintain a presence on these platforms and establish presences on new or emerging popular social media platforms. If we are unable to cost-effectively use social media platforms as marketing tools, our ability to acquire new consumers and our financial condition may suffer. Generally, the opportunities in and sophistication of newer advertising channels are relatively undeveloped and unproven, and there can be no assurance that we will be able to continue to appropriately manage and fine-tune our marketing efforts in response to these and other trends in the advertising industry. Furthermore, these newer advertising channels often change rapidly and can be subject to disruptions for reasons beyond our control. For example, lawmakers in the United States, Europe and Canada have recently escalated efforts to restrict access to TikTok. On April 24, 2024, President Biden signed a bill to force a sale of TikTok by its Chinese owner, ByteDance, by January 19, 2025 or institute a first-of-its-kind ban on the app in the United States. Though ByteDance did not sell TikTok by the deadline, President Trump signedgranted anmultiple executiveextensions actionto ongive his administration more time to broker a deal to bring the social media platform under American ownership. On January 20,22, 20252026, ByteDance finalized a deal that delayedresolves enforcementnational security concerns and complies with the Protecting Americans from Foreign Adversary Controlled Applications Act by removing TikTok in the United States from China’s control with the establishment of thea TikTokmajority banAmerican-owned forjoint 75venture daysthat and,will onsecure AprilUS 4, 2025, granted another 75-day extension.data. Individual states, governmental bodies and institutions have also voiced concerns that TikTok poses a national security threat and have pursued similar prohibitions. As laws and regulations rapidly evolve to govern the use of these platforms and devices, the failure by us, our employees or third parties acting at our direction to abide by applicable laws and regulations in the use of these platforms and devices could subject us to regulatory investigations, class action lawsuits, liability, fines or other penalties and have a material adverse effect on our business, financial condition and result of operations. Any failure to successfully manage our marketing efforts on, or disruptions to, social media channels that we have come to depend on for marketing could materially adversely affect our business, financial condition and results of operations.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and related notes thereto included elsewhere in this Annual Report.Report on Form 10-K.

The Company's family of brands includesconsists of e.l.f. Cosmetics, e.l.f. SKIN, rhode, Naturium, and Well People and Keys Soulcare.People. The Company's brands are available online and across leading beauty, mass-market and specialty retailers. The Company has strong relationships with its retail customers such as Target, Walmart, UltaAmazon, Beauty, AmazonSephora and other leading retailers that have enabled the Company to expand distribution both domestically and internationally.

PotentialUpdate Impact ofon Tariffs

See the risk factor titled “AdditionalChanges in the US tariffsand orinternational othertrade policies, including tariffs, trade restrictions placed on imports,and retaliatory trade measures taken by other countries and resulting trade wars may have a material adverse impact on theour Company’sbusiness, financial condition and results of operations” included as part of Item 1A. Risk Factorsfactors of this Annual Report on Form 10-K for additional information regarding risk related to tariffs.

On October 4, 2023, we consummated our acquisition of Naturium LLC, a Delaware limited liability company (“Naturium”), and TCB-N Prelude Blocker Corp., a Delaware corporation (“Blocker”), pursuant to a Securities Purchase Agreement, dated August 28, 2023 (the "Purchase Agreement"), by and among the Company, e.l.f. Cosmetics, Inc., Naturium, Blocker and various sellers. Pursuant to the Purchase Agreement, we acquired all rights, title and interest in and to the outstanding equity securities of Naturium and Blocker for a purchase price of $333.0 million paid in cash and shares of our common stock (the "Acquisition").stock. See Note 3, “Acquisition,Acquisitions,” in the Notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details.

We develop, market and sell beauty products under the e.l.f. Cosmetics, e.l.f. SKIN, Naturium,rhode, Naturium and Well People and Keys Soulcare brands. Our net sales are derived from sales of these beauty products, net of provisions for sales discounts and allowances, product returns, markdowns and price adjustments.

Year over year changes in net sales is driven by a number of factors, including beauty category performance, levels of consumer spending, innovation and our ability to drive awareness of and demand for our products. Within our existing retailer accounts, we are able to drive growth by increasing sales per linear foot supported by marketing investments and continued innovation, as well as through expanding space and door penetration. We seek to continue to grow with our retailers through improved sales per linear foot in our existing space, expanded space allocation with our current retail accounts,allocation, as well as adding new retail customers.customers globally.

Our largest customers, Target, Walmart, Ulta BeautyAmazon and Amazon,Sephora, accounted for 23%,18%, 16%,13%, 12%,11% and 12%10%, respectively, of our net sales in the fiscal year ended March 31, 2025.2026. No other individual customer accounted for 10% or more of our net sales in the fiscal year ended March 31, 2025.2026. National and international retailers comprised 83%76% of our net sales. The remaining 17%24% came from e-commerce channels in the fiscal year ended March 31, 2025.2026.

The primary market for our products is in the United States, which accounted for 81%79% of our net sales in the fiscal year ended March 31, 2025.2026. The remaining 19%21% was attributable to international markets, primarily the UKUK, Canada and Canada.Germany.

Other income (expense),income, net

Net sales increased $289.6$323.0 million, or 28%,25%, to $1,636.5 million in the fiscal year ended March 31, 2026, from $1,313.5 million in the fiscal year ended March 31, 2025,2025. fromThe $1,023.9rhode Acquisition contributed $293.5 million to our growth in the fiscal year ended March 31, 2024.2026, with the remaining $29.5 million contributed from our existing business. The $323.0 million increase was driven by strength acrossboth our retailer and e-commerce channels. Net sales increased $221.6$178.3 million, or 26%,16%, in our retailer channels and $68.0$144.7 million, or 42%,63%, in our e-commerce channels. From a price and volume perspective, a higher volume of units sold drove $246.1 million of the increase in net sales. A higher average item price and mix within retailer and e-commerce orders drove the remaining $43.5$333.5 million increase in net sales as compared to the fiscal year ended March 31, 2024.2025. This was partially offset by lower volume impacting sales by $10.5 million.

Gross profit increased $211.6$221.7 million, or 29%,24%, to $1,157.3 million in the fiscal year ended March 31, 2026, compared to $935.7 million in the fiscal year ended March 31, 2025,2025. comparedHigher toaverage $724.1item millionprice and mix drove an increase of $229.2 million, offset by lower volume impacting gross profit by $7.5 million. Gross margin was 70.7% in the fiscal year ended March 31, 2024.2026, Highera unit volume drove $174.0 million of the increase in gross profit, with the remaining increase of $37.6 million driven by higher average item price and mix. Gross margin was 71.2% in the fiscal year ended March 31, 2025 an increasedecrease of approximately 50 basis points as compared to 70.7%71.2% gross margin in the fiscal year ended March 31, 2024.2025. The increasedecrease in gross margin rate was primarily driven by favorable foreign exchange impacts on goods purchased from China and cost savings,tariffs, partially offset by mix.pricing.

SG&A expenses were $1,026.1 million in the fiscal year ended March 31, 2026, an increase of $248.4 million, or 32%, from $777.7 million in the fiscal year ended March 31, 2025, an increase of $203.2 million, or 35%, from $574.4 million in the fiscal year ended March 31, 2024.2025. SG&A expenses as a percentage of net sales was 59% for the fiscal years ended March 31, 2025 and 56%63% for the fiscal year ended March 31, 2024.2026 and 59% for the fiscal year ended March 31, 2025. The increase on a dollar basis was primarily related to increased marketingmarketing, merchandising and digitaldistribution spendcosts of $62.8$129.1 million, increased compensation and benefits expense of $60.3$55.1 million, increased operations costs of $23.2 million, increased retail fixturing and visual merchandising costs of $23.1 million, increased general and administrative costs of $18.9 million and increased depreciation and amortization of $13.9$35.0 million, increased professional fees of $20.6 million, and increased regulatory fees of $8.6 million.

Other income (expense),income, net

Interest expense increased $6.8$21.5 million, orto 97%,$35.3 million in the fiscal year ended March 31, 2026, as compared to $13.8 million in the fiscal year ended March 31, 2025, as compared to $7.0 million in the fiscal year ended March 31, 2024.2025. The increaseyear-over-year variance was primarily due to additionalthe borrowingsFifth asAmendment wellwhich asestablished higherthe interestTerm costsFacility and lowerincreased interest earned on our cash balances.debt. See Note 8, “Debt,” in the Notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details on our debt.

The income tax provision for income taxes was $13.3$14.1 million, or an effective rate of 9%35%, for the twelve months ended March 31, 2024,2026, as compared to a provision of $2.5$33.4 million, or an effective rate of 4%23%, for the twelve months ended March 31, 2023.2025. The change in the income tax provision was primarily driven by ana increasedecrease in income before the provision for income taxes of $76.9$105.0 million, partially offset by an increase in discrete tax benefits of $14.4 million, primarily related to stock-based compensation.million.

For the fiscal year ended March 31, 2023,2026, net cash provided by operating activities was $101.9$212.5 million. This included net income, before deducting depreciation, amortization and other non-cash items,items of $107.1$262.0 million, partially offset by acquisition-related seller expenses of $47.1 million in connection with the rhode Acquisition, and an increase in working capital of $2.3 million. The increase in net working capital ofwas $5.2 million. The change in net working capital wasprimarily driven by a $22.4 million increase in accounts receivable, a $24.6$67.4 million increase in prepaid and other assets,assets and a $4.4$17.5 million decreaseincrease ofin otheraccounts liabilitiesreceivable, partially offset by a $43.0$75.3 million increase of accounts payable and accrued expenses,expenses and a $3.2$7.3 million decrease in inventory.

For the fiscal year ended March 31, 2024, net cash used in investing activities was $284.7 million. This includes $275.0 million paid for the Naturium Acquisition, net of cash acquired, capital expenditures related to fixturing, equipment and software of $8.7 million, and contributions to other investment of $1.0 million.

The beauty industry is driven in part by fashion and beauty trends, which may shift quickly. Our continued success depends on our ability to anticipate, gauge and react in a timely and cost-effective manner to changes in consumer preferences for beauty products, consumer attitudes toward our industry and brands and where and how consumers shop for those products. We must continually work to develop, produce and market new products, maintain and enhance the recognition of our brands, maintain a favorable mix of products and develop our approach as to how and where we market and sell our products. Our growth depends on the continued success of existing products, the successful identification, development and launch of innovative and differentiated new products and the expansion into adjacent categories, channels of distribution or geographies.

We have a process for the development, evaluation and validation of our new product concepts. Nonetheless, each new product launch involves risks,considerable costs, effort and risk, as well as the possibility of unexpected consequences. For example, the acceptance of new product launches and sales to our retail customers may not be as high as we anticipate due to lack of acceptance of the products themselves or their price or limited effectiveness of our marketing strategies. In addition, our ability to launch new products may be limited by delays or difficulties affecting the ability of our suppliers or manufacturers to timely manufacture, distribute and ship new products or displays for new products. Sales of new products may be affected by inventory management by our retail customers, and we may experience product shortages or limitations in retail display space by our retail customers. We may also experience a decrease in sales of certain existing products as a result of newly-launched products, the impact of which could be exacerbated by shelf space limitations or any shelf space loss. In the course of launching new products, we could be subject to claims of intellectual property infringement and, even if we are not found to infringe a third party’s intellectual property rights, such claims of infringement could adversely affect us, including by increasing costs and by delaying the launch of new products. Any of these occurrences could delay or impede our ability to achieve our sales objectives, which could have a material adverse effect on our business, financial condition and results of operations.

As part of our ongoing business strategy, we expect that we will need to continue to introduce new products in the color cosmetics and skincare categories, while also expanding our product launches into adjacent categories in which we may have little to no operating experience. For example, in June 2026, we expanded into haircare with the launch of e.l.f. Hair. The success of this category expansion and other product launches in adjacent product categories could be hampered by our relative inexperience operating in such categories, the strength of our competitors or any of the other risks referred to above. Furthermore, any expansion into new product categories may prove to be an operational and financial constraint which inhibits our ability to successfully accomplish such expansion. Our inability to introduce successful products in our traditional categories or in adjacent categories could limit our future growth and have a material adverse effect on our business, financial condition and results of operations.

WeSome of our brands have relatively low brand awareness among consumers when compared to legacy beauty brands, and maintaining and enhancing the recognition and reputation of our brands is critical to our business and future growth. Many factors, some of which are beyond our control, are important to maintaining our reputation and brands. These factors include our ability to comply with ethical,various environmental, social, governance, product, labor and environmentalother ethical standards. Any actual or perceived failure in compliance with such standards could damage our reputation and brands.

Any loss of confidence on the part of consumers in the ingredients or formulations used in our products, whether related to product contamination or product safety or quality failures, actual or perceived, or inclusion of prohibited ingredients,ingredients or ingredients perceived to be inferior or unsafe, could tarnish the image of our brands and could cause consumers to choose other products. Allegations of contamination or other adverse effects on product safety or suitability for use by a particular consumer, even if untrue, may require us to expend significant time and resources responding to such allegations and could, from time to time, result in a recall of a product from any or all of the markets in which the affected product was distributed. Any such issues or recalls could negatively affect our profitability and image of our brands.

If our products are found to be, or perceived to be, defective or unsafe, or if they otherwise fail to meet our consumers’ expectations, our relationships with consumers could suffer, the appeal of our brands could be diminished, we may need to recall some of our products and/or become subject to regulatory action, and we could lose sales or market share or become subject to boycotts or liability claims. In addition, safety or other defects in our competitors’ products or products supplied by our third-party manufacturers or suppliers to other third parties could reduce consumer demand for our own products if consumers view them to be similar.products. Any of these outcomes could result in a material adverse effect on our business, financial condition and results of operations.

•because the majoritymany of our products are sourced and manufactured in China, our operations are susceptible to risks inherent in doing business there;

To the extent that we pay the consideration for any acquisitions or investments in cash, it reduces the amount of cash available to us for other purposes. Acquisitions or investments can also result in dilutive issuances of our equity securities or the incurrence of debt, contingent liabilities, amortization expenses, increased interest expenses or impairment charges against goodwill on our consolidated balance sheet, any of which could have a material adverse effect on our business, financial condition and results of operations. For example, in connection with our acquisition of Naturium, we paid total consideration of approximately $333.0 million using an incremental term loan under our existing credit facility, borrowings on our existing revolving facility, cash on the balance sheet and approximately $57.8 million of our stock. In connection with our acquisition of rhode, we paid total cash consideration of approximately $590.1 million using the proceeds from an incremental term loan under our existing credit facility, borrowings on our existing revolving facility, and cash on the balance sheet, andas well as approximately $300.3 million of our stock.stock, and a potential earnout initially valued at $7.1 million. As of June 30, 2026, the liability for contingent consideration relating to the potential earnout was remeasured to $80.8 million, driven by the outperformance of rhode's revenue results since the acquisition date, and a revised upward forecast for the remainder of the performance periods.

AdditionalChanges in the US tariffsand orinternational othertrade policies, including tariffs, trade restrictions placed on imports,and retaliatory trade measures taken by other countries and resulting trade wars may have a material adverse impact on our business, financial condition and results of operations.

Starting in July 2018, the US government announced a series of lists covering thousands of categories of Chinese origin products subject to US tariffs in addition to the tariffs that have historically applied to such products. The majorityMany of our products are sourced and manufactured in China and have been subject to a US 25% tariff since May 2019. InBeginning Marchin and Aprilearly 2025, the TrumpUS administration announced a series of additional tariffs on most products from countries worldwide, including higher tariffs on substantially all products of Chinese origin. Since then, the TrumpUS administration has increased, reduced or temporarily paused some of the increased tariffs. We cannot predict whether such reductions or increases will remain in place or pauses will be extended or will lapse, whether the Trump administration will continue to increase tariffs, or whether the Trump administration will enter into agreements with countries to reduce tariffs.

Nonetheless, as a result of the additional US tariffs announced since early 2025, on August 1, 2025, we raised prices globally for all products sold, which could result in the loss of consumers and materially and adversely affect our business, financial condition and results of operations. We may also seek to shift production outside of China, resulting in significant costs and disruption to our operations and materially and adversely affecting its costs, sales, business, financial condition and results of operations. Additional tariff increases or trade restrictions imposed by the United States could materially adversely affect the results of operations of our business. Moreover, such tariffs may lead to retaliatory actions, including counter-tariffs and increased production costs, disruptions to global supply chains and otherwise create operational challenges for us. We cannot predict whether these policies will continue or if new policies will be enacted; however, uncertainty regarding these policy changes in trade regulation or additional incremental tariffs or counter-tariffs could have a material adverse effect on our business, financial condition and results of operations.

There is also a concern that the imposition of additional tariffs by the United States could result in “buy national” and similar policies or the adoption of tariffs by China and other countries, leading to a global trade war. Trade restrictions implemented by the United States, China, Canada, the United Kingdom (the “UK”), the European Union (the “EU”) or any of the other jurisdictions in which we conduct significant business in connection with a global trade war couldmay resultaffect inour ussuppliers’ raisingability to source products efficiently or create other supply chain disruptions, impacting the prices furtherof and supply of our products. We may not be able to fully or makingsubstantially changesmitigate tothe our operations, anyimpact of future tariffs and retaliatory trade action by other countries, which couldwould result inhave a material adverse effect on our financial condition andbusiness, results of operations.operations and financial performance.

As a company engaged in distribution on a global scale, our operations, including those of our third-party manufacturers, suppliers, brokers and delivery service providers, are subject to the risks inherent in such activities, including industrial accidents, environmental events, strikes and other labor disputes (such as the port strikes in 2024), disruptions or delays in shipments,shipments (including delays at international and domestic ports), disruptions in information systems, product quality control, safety, licensing requirements and other regulatory issues, costs (including customs duties, quotas and tariffs), as well as naturalweather disasters (such as the January 2025 Southern California wildfiresevents and thenatural 2024 Atlantic hurricanes),disasters, pandemics (such as the coronavirus pandemic), border disputes, international conflict (such as the ongoingwar militaryin Iran, the broader conflict in Ukraine and the Middle East and Russia's invasion of Ukraine), acts of terrorism and other external factors over which we and our third-party manufacturers, suppliers, brokers and delivery service providers have no control. The loss of, or damage to, the manufacturing facilities or distribution centers of our third-party manufacturers, suppliers, brokers and delivery service providers could materially and adversely affect our business, financial condition and results of operations.

We depend heavily on global trade, including ocean container delivery, as well as fast boats, rail and air freight, to receive shipments of our products from our third-party manufacturers located in China and contracted third-party delivery service providers to deliver our products to our distribution facilities and logistics providers, and from there to our retail customers. Further, we rely on postal and parcel carriers for the delivery of products sold directly to consumers through our e-commerce websites and mobile applications. Interruptions,Interruptions to or failures in,in these delivery services could prevent the timely or successful delivery of our products. These interruptions or failures may be due to unforeseen events that are beyond our control or the control of our third-party delivery service providers, such as port congestion, container shortages, inclement weather, natural disasters, international conflict, labor unrest or other transportation disruptions. Certain of these events, such as the war in Iran, may also contribute to increased volatility in global oil prices, which could further increase transportation, manufacturing and other operating costs or disrupt transportation or distribution of our products or components of our products. In addition, port congestion, container shortages, inclement weather, natural disasters, international conflict, labor unrest or other transportation disruptions may increase the costs to supply or transport our products or the components of our products. If our products are not delivered on time or are delivered in a damaged state, retail customers and consumers may refuse to accept our products and have less confidence in our services. In addition, a vessel and container shortage globally could delay future inventory receipts and, in turn, could delay deliveries to our retailer customers and availability of products in our direct-to-consumer e-commerce channel. Such potential delays, additional transportation expenses and shipping disruptions could negatively impact our results of operations through higher inventory costs and reduced sales. Furthermore, the delivery personnel of contracted third-party delivery service providers act on our behalf and interact with our consumers personally. Any failure to provide high-quality delivery services to our consumers may negatively affect the shopping experience of our consumers, damage our reputation and cause us to lose consumers.

We use multiple third-party suppliers and manufacturers, primarily based in China, to source and manufacture the majority of our products. The ability of these third parties to supply and manufacture our products may be affected by competing orders placed by other persons and the demands of those persons. Further, we are subject to risks associated with disruptions or delays in shipments whether due to port congestion, container shortages, labor disputes (such as the port strikes in 2024), product regulations and/or inspections or other factors, weather events, natural disasters or health pandemics, or other transportation disruptions. If we experience significant increases in demand or need to replace a significant number of existing suppliers or manufacturers, there can be no assurance that additional supply and manufacturing capacity will be available when required on terms that are acceptable to us, or at all, or that any supplier or manufacturer will allocate sufficient capacity to us in order to meet our requirements.

In addition, quality control problems, such as the use of ingredients and delivery of products that do not meet our quality control standards and specifications or comply with applicable laws or regulations could harm our business. The scope of such regulations is expanding,broad, including requirements for certain value chain considerations, such as end of lifeend-of-life management, requirements for recycled content or other content restrictions, and certain supply chain diligence practices.practices such as disclosure requirements related to certain conflict minerals. Compliance can be costly or result in us needing to reassess aspects of our operations and value chain, and any quality control problems could result in regulatory action, such as fines, restrictions on importation, products of inferior quality or product stock outages or shortages, harming our sales and creating inventory write-downs for unusable products.

Many of our products may be considered discretionary items for consumers. Consumer spending on beauty products is influenced by general economic conditions and the availability of discretionary income. Adverse economic conditions in the United States, Canada, the UK, the EU, China or any of the other jurisdictions in which we conduct significant business, such as the current inflationary economic environment, rising interest rates, financial distress caused by bank failures or a banking crisis, an economic recession, depression or downturn, a tightening of the credit markets, high energy prices or higher unemployment levels, may lead to decreased consumer spending, reduced credit availability and a decline in consumer confidence and demand, each of which poses a risk to our business. For example, US and global markets have experienced volatility and disruption due to inflation and heightened interest rates, as well as the continued escalation of geopolitical tensions and conflict, including those resulting from Presidentthe Trump’swar pushin toIran, acquirethe Greenlandbroader and ongoing conflicts between Russia and Ukraine andconflict in the Middle East.East and Russia's invasion of Ukraine. We have experienced and continue to experience inflationary pressures in certain areas of our business. Although our business has not yet been materially negatively impacted by such inflationary pressures, we cannot be certain that neither we nor our consumers will be materially impacted by continued pressures.

In addition, the global macroeconomic environment has been negatively affectedimpacted by, among other things, the change in administration following the 2024 presidential election, increased US trade tariffs and trade disputes between the United States, China and other countries, international conflict (such as the war in Iran, the broader conflict in the Middle East and Russia's invasion of Ukraine), the Houthi attacks on marine vessels in the Red Sea, political tensions between Taiwan and China, political demonstrations, and foreign governmental debt concerns which have caused, and are likely to continue to cause, uncertainty and instability in local economies and in global financial markets. For example, we have a retail partner located in certain Middle-Eastern countries. In 2025,February there2026, were significant changesIsrael and proposedthe changesUnited States initiated a coordinated military operation in Iran. In response, Iran launched counter-attacks against Israel and other countries in the region, including Bahrain. During these attacks, our retail partner had to USshutter tradeits policies.stores Sincein MarchBahrain 2025,temporarily, Presidentthus Trumpimpacting hasour announcedretail newsales tariffsin onthe foreignregion. importedAdditionally, goodsthe fromconflicts countriesin worldwide,the includingMiddle additionalEast tariffshave onled substantiallyto allhigher productsoil importedprices fromand China.created Somesupply imbalances in the global market for oil and natural gas. The extent and duration of these tariffseffects cannot be reliably predicted, and these conflicts may have beenother pausedadverse effects on the global economy. If these conflicts continue or reduced,expand further into other countries, not only could they further adversely affect our sales with our retail partner in Middle-Eastern countries, but wethey cannotcould predictalso whetherlead any of these reductions will remain in place or pauses will lapse or be extended or whether any tariffs will beto increased orshipping decreased.costs, Thesetransportation additionaldelays, tariffs, including pauses, reductions or additional increases, as well as a government’s adoption of “buy national” policies or retaliation by another government against such tariffs or policies, have introduced significant uncertainty into the marketembargos, and mayother affectsupply thechain costconcerns, to manufacture our products and the pricesall of and demand for our products, which could have a material and adverse effect on our business, financial condition andcondition, results of operations.operations, and cash flows.

If the financial institutions with which we do business enter receivership or become insolvent in the future, there is no guarantee that the Department of the Treasury, the Federal Reserve and the FDIC will intercede to provide us and other depositors with access to balances in excess of the $250,000 FDIC insurance limit or that we would be able to: (i) access our existing cash, cash equivalents and investments; (ii) maintain any required letters of credit or other credit support arrangements; or (iii) adequately fund our business for a prolonged period of time or at all. Any of such events could have a material adverse effect on our current or projected business operations and results of operations and financial condition. In addition, if any parties with which we conduct business are unable to access funds pursuant to such instruments or lending arrangements with such a financial institution, such parties’ ability to continue to fund their business and perform their obligations to us could be adversely affected, which, in turn, could have a material adverse effect on our business, financial condition and results of operations.

As of DecemberJune 31,30, 2025,2026, we had a total of $849.2$834.2 million of indebtedness, consisting of amounts outstanding under our credit facilities and finance lease obligations, and a total availability of $243.3 million under our Amended Revolving Credit Facility (as defined in Part I, Item 2 “Management’s discussion and analysis of financial condition and results of operations” under the heading “Description of indebtedness”). Our primary cash needs are for working capital, fixturing, retail product displays, digital investments and debt service. We have also used debt to finance acquisitions. Cash needs typically vary depending on strategic initiatives selected for the fiscal year, including investments in infrastructure, digital capabilities expansion within or to additional retailer store locations, and acquisitions.

We are subject to the income tax laws of the United States and several international jurisdictions. Changes in law and policy relating to taxes, including changes in administrative interpretations and legal precedence or changes ushered in by the Trump administration,precedents, could materially and adversely affect our business, financial condition and results of operations. For example, on July 4, 2025, legislation commonly referredChanges to as the One Big Beautiful Bill Act (“OBBBA”) was signed into law and extended many of the tax law provisions that were set to expire in 2025. OBBBA contains a number of US corporate tax provisions, of which we expect to elect to expense US-incurred research or experimental expenditures immediately and full bonus depreciation for certain assets placed into service after January 19, 2025. As a result of our elections, it is expected that in 2026, US cash taxes will significantly decrease with no material impact to our effective tax rate. Further changes to the tax laws or changes to the administrative or judicial interpretations of such laws aremay possible and mayalso apply with retroactive effect.

Data security and privacy threats are accelerating in frequency and magnitude, are becoming increasingly difficult to detect and come from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” personnel (such as through malfeasance, human error, theft or misuse), organized criminal threat actors, sophisticated nation states and nation-state supported actors. Some threat actors now engage and are expected to continue to engage in cyberattacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities. During times of war and other major conflicts,conflicts (such as the war in Iran, the broader conflict in the Middle East and Russia's invasion of Ukraine), we and the third parties upon which we rely may be vulnerable to a heightened risk of these attacks, including retaliatory cyberattacks that could materially disrupt our systems and operations.

The tools and techniques used by threat actors to attack or access systems and data are constantly evolving and may not be recognized until or after being launched against a target. These tools can, in some cases, circumvent security controls, evade detection and remove forensic evidence. We may be unable to anticipate, detect, prevent, remediate or recover from future cybersecurity incidents, including attacks to our information systems and data. The rapid advancement of AI technologies has significantly increased the risks associated with cyberattacks, including as AI is integrated into our and any third party’s operations, products or services. As new and improved technologies and methodologies continue to become available to threat actors (for example, AI),actors, increased risks and currently unknown vulnerabilities could result in significant future expenditures related to our information systems, technology infrastructure and operations. Any material disruption of our systems, or the systems of our third-party service providers, could disrupt our ability to track, record and analyze the products that we sell and could negatively impact our operations, our reputation, shipment of goods, ability to process financial information and transactions and our ability to receive and process retail customer and e-commerce orders or engage in normal business activities.

We conduct periodic penetration testing and vulnerability assessments to identify and address potential security weaknesses in our systems and third-party vendor environments to support expected future growth. As such, we will continue to invest in and implement modifications and upgrades to our information technology systems and procedures, including replacing legacy systems with successor systems, making changes to legacy systems or acquiring new systems with new functionality, hiring employees with information technology expertise and building new policies, procedures, training programs and monitoring tools. We are currently undertaking various technology upgrades and enhancements to support our business growth, including an implementation of SAP software to upgrade our platforms and systems worldwide, which went live in July 2025.worldwide. These types of activities subject us to inherent costs and risks associated with replacing and changing these systems, including impairment of our ability to leverage our e-commerce channels, fulfill customer orders, potential disruption of our internal control structure, substantial capital expenditures, additional administration and operating expenses, acquisition and retention of sufficiently skilled personnel to implement and operate the new systems, demands on management time and other risks and costs of delays or difficulties in transitioning to or integrating new systems into our current systems.

The evolution of AI is occurring at a rapid pace. Our ability to compete effectively could be adversely impacted if competitors or other third parties incorporate AI into their businesses more rapidly, effectively or innovatively than we do. Successful, ethical, and responsible implementation of AI solutions will require significant investments in infrastructure, talent, governance, and ongoing monitoring mechanisms.

The use of AI may also heightenheightens cybersecurity, intellectual property, and data privacy risks, including unintended exposure, misuse,misuse or theft of proprietary, personal, or otherwise sensitive information.information, infringement of third-party rights and uncertainty regarding ownership of AI-generated outputs. In addition, evolving AI technologies and their novel use cases are developing faster than the applicable legal and regulatory frameworks. Future legislation, standards, or regulations — domestically and internationally — could impose substantial obligations, operational restrictions, penalties, or compliance costs on businesses using AI.

For example,Furthermore, in the European Union,EU, the EU Artificial Intelligence Act (“EU AI Act”), which establishes a comprehensive, risk-based governance framework for AI in the EU market, entered into force on August 1, 2024. While the majority of the substantive requirements will not apply until the second half of 2026,2026 (subject to proposed amendments to delay their implementation under the EU Digital Omnibus on AI Regulation Proposal), certain of the EU AI Act’s provisions regarding prohibited AI systems and AI literacy obligations are already applicable. Once fully applicable, the EU AI Act will have a material impact on the way AI is regulated in the EU, and together with developing guidance and/ or decisions in this area, may affect our use of AI and our ability to provide, improve or commercialize our services, require additional compliance measures and changes to our operations and processes, result in increased compliance costs and potential increases in civil claims against us, and could adversely affect our business, operations and financial condition. It is possible that further new laws and regulations will be adopted in the United States and in other non-US jurisdictions as well, or that existing laws and regulations may be interpreted in ways that would affect the way in which we use AI and machine learning technology. Such additional regulations may impact our ability to develop, use and commercialize AI in the future.

We have in place technical and organizational measures designed to maintain the security and safety of critical proprietary, personal, employee, customer and financial data. However, despite these efforts, advances in technology, the pernicious ingenuity of criminals, new exposures via cryptography, acts or omissions by our employees, contractors or service providers or other events or developments could result in a compromise or breach in the security of confidential or personal data. We and our service providers may not be able to prevent third parties, including criminals, competitors, state-sponsored organizations, opportunistic hackers and hacktivists or others,parties from breaking into or altering our systems, disrupting business operations or communications infrastructure through denial-of-service attacks, attempting to gain access to our systems, information or monetary funds through phishing or social engineering campaigns, installing viruses or malicious software (including ransomware) on our e-commerce websites or mobile applications or devices used by our employees or contractors, or carrying out other activity intended to disrupt our systems or gain access to confidential or sensitive information in our or our service providers’ systems, and we may be vulnerable to attack, damage and interruption from computer viruses and malware (e.g., ransomware), malicious code, misconfigurations, bugs or other vulnerabilities in commercial software that is integrated into our (or our suppliers’ or service providers’) information technology systems, products or services. Further, there can also be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our information technology systems and data.

Furthermore, such third parties may engage in various other illegal activities using such information, including credit card fraud or identity theft, which may cause additional harm to us, our consumers and our brands. We also may be vulnerable to error or malfeasance by our own employees or other insiders. Third parties may attempt to fraudulently induce our or our service providers’ employees to misdirect funds or to disclose information in order to gain access to personal data we maintain about our consumers or website users. In addition, we have limited control or influence over the security policies or measures adopted by third-party providers of online payment services through which some of our consumers may elect to make payment for purchases at our e-commerce websites and mobile applications. Contracted third-party delivery service providers may also violate their confidentiality or data processing obligations and disclose or use information about our consumers inadvertently or illegally.

We currently source and manufacture the majoritymany of our products from third-party suppliers and manufacturers in China and have over 100 employees in China. With the rapid development of the Chinese economy, the cost of labor has increased and may continue to increase in the future. Our results of operations will be materially and adversely affected if our labor costs, or the labor costs of our suppliers and manufacturers, increase significantly. In addition, we and our manufacturers and suppliers may not be able to find a sufficient number of qualified workers due to the intensely competitive and fluid market for skilled labor in China. Furthermore, pursuant to Chinese labor laws, employers in China are subject to various requirements when signing labor contracts, paying remuneration, determining the term of employees’ probation and unilaterally terminating labor contracts. These labor laws and related regulations impose liabilities on employers and may significantly increase the costs of workforce reductions. If we decide to change or reduce our workforce, these labor laws could limit or restrict our ability to make such changes in a timely, favorable and effective manner. Any of these events may materially and adversely affect our business, financial condition and results of operations.

Operating in China exposes us to political, legal and economic risks. In particular, the political, legal and economic climate in China, both nationally and regionally, is fluid and unpredictable. Our ability to operate in China may be adversely affected by changes in the United States and Chinese laws and regulations such as those related to, among other things, taxation, import and export tariffs, environmental regulations, land use rights, intellectual property, currency controls, network security, and safety laws including employee benefits, privacy, hygiene supervision and other matters. For example, in December 2021, the US Congress enacted the Uyghur Forced Labor Prevention Act (“UFLPA”) in an effort to prevent what it views as forced labor and human rights abuses in the Xinjiang Uyghur Autonomous Region (“XUAR”). If it is determined that our third-party suppliers and manufacturers mine, produce or manufacture our products wholly or in part from the XUAR,XUAR or are otherwise on the UFLPA Restricted Entities List, then we could be prohibited from importing such products into the United States. In addition, we may not obtain or retain the requisite legal permits to continue to operate in China, and costs or operational limitations may be imposed in connection with obtaining and complying with such permits. In addition, Chinese trade regulations are in a state of flux, and we may become subject to other forms of taxation, tariffs and duties in China. Currently, considerable uncertainty surrounds the future trade relationship between the United States and China. The US government has implemented significant changes to US trade policy with respect to China since 2018, including the most recent tariff increases introduced by the Trump administration. Given the recent volume of executive orders from the Trump administration, we cannot predict additional near-term changes in the US trade policy with China; however such changes may materially and adversely impact our business, financial condition and results of operations. Furthermore, the third parties we rely on in China may disclose our confidential information or intellectual property to competitors or third parties, which could result in the illegal distribution and sale of counterfeit versions of our products. If any of these events occur, our business, financial condition and results of operations could be materially and adversely affected.

Our products are also subject to state laws and regulations, such as the California Safe Drinking Water and Toxic Enforcement Act, also known as “Prop 65,” and various state PFAS regulations, and failure to comply with such laws and regulations may also result in lawsuits and regulatory enforcement that could have a material adverse effect on our business, financial condition and results of operations. We have been, and may in the future be, involved in litigation related to such current and future federal and state laws and regulations.

In addition, in recent years, certain states have adopted or modified data privacy and security laws and regulations that may apply to our business. For example, the California Consumer Privacy Act (the “CCPA”) requires certain disclosures to California residents regarding a business’s data processing activities, affords California consumers rights with respect to their personal information (including the rights related to access to and deletion of personal information, and the right to opt out of certain disclosures of their personal information), and establishes significant penalties for noncompliance. Following this trend, several other states have enacted or are considering enacting data protection legislation that may impose significant obligations and restrictions. The potential effects of these states’ legislation are far-reaching and may require us to incur substantial costs and expenses in an effort to comply, and it is unclear whether, and if so how, the US Congress will respond to these overlapping, state-by-state enactments. Certain states have also enacted or proposed laws regulating the use of certain AI technologies. California is considering new regulations for automated decision-making technologies. These new and proposed laws and regulations may impact how we operate our websites or mobile application, engage in digital marketing, transact with consumers, or process or monetize our data assets, and increase our potential exposure to regulatory enforcement and/or litigation.

We are also subject, under the GDPR, to restrictions on cross-border transfers of personal data out of the European Economic Area (the “EEA”) and UK, where legal developments have created complexity and uncertainty regarding transfers of personal data outside the EEA and the UK, including to the United States. We rely on the standard contractual clauses (“SCCs”) to transfer data outside of the EEA/ UK in some situations; however, the Court of Justice of the European UnionEU has stated that reliance on the SCCs alone may not be sufficient, and we expect the existing legal complexity and uncertainty regarding international personal data transfers to continue. As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the SCCs cannot be used, and/or continue to take enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.

We currently source and manufacture a substantial numbermany of our products from third-party suppliers and manufacturers located outside of the United States, and we have an office in China from which we manage our international supply chain. We sell our products in countries outside of the United States, including through distributors. Our operations are subject to the US Foreign Corrupt Practices Act (the “FCPA”), as well as the anti-corruption and anti-bribery laws in the countries where we do business. The FCPA prohibits covered parties from offering, promising, authorizing or giving anything of value, directly or indirectly, to a “foreign government official” with the intent of improperly influencing the official’s act or decision, inducing the official to act or refrain from acting in violation of lawful duty, or obtaining or retaining an improper business advantage. The FCPA also requires publicly traded companies to maintain records that accurately and fairly represent their transactions, and to have an adequate system of internal accounting controls. In addition, other applicable anti-corruption laws prohibit bribery of domestic government officials, and some laws that may apply to our operations prohibit commercial bribery, including giving or receiving improper payments to or from non-government parties, as well as so-called “facilitation” payments. In addition, we are subject to United States and other applicable trade control regulations that restrict with whom we may transact business, including the trade sanctions enforced by the US Treasury, Office of Foreign Assets Control.

We rely on trademark, copyright, trade secret, patent and other laws protecting proprietary rights, nondisclosure and confidentiality agreements and other practices, to protect our brands and proprietary information, technologies and processes. Our primary trademarks include “e.l.f.,” “e.l.f. SKIN,” “Naturium,” “e.l.f. eyes lips face,” “Welle.l.f. People,Hair,” “Keysrhode,” Soulcare,“Naturium,” and “rhode,Well People,” all of which are registered or have registrations pending in the United States and in many other countries or registries. Our trademarks are valuable assets that support our brands and consumers’ perception of our products.

There is an increased focus from certain investors, customers, consumers, employees, policymakers and other stakeholders concerning corporate citizenship and sustainability matters. From time to time, we may announce certain initiatives, including goals regarding our focus areas, which include environmental matters, packaging, responsible sourcing and social investments. However, such initiatives can be costly and may not have the desired effect. For example, we could fail,fail (including for reasons outside of our control), or be perceived to fail, in our achievement of such initiatives or goals or in accurately reporting our progress on such initiatives and goals. In addition, such initiatives and reporting often rely on methodologies, standards, and data that are subject to varying interpretations and are continuing to evolve. Our approach to such matters likewise evolves, and we cannot guarantee that our approach will align with the expectations of any particular stakeholder. Stakeholder expectations (as well as associated ratings and assessments) are not uniform,uniform and may even be contradictory, which can result in additional costs or complexities in navigating these matters. Any such matters, or related corporate citizenship and sustainability matters, could have a material adverse effect on our business, financial condition and results of operations.

Furthermore, ESG-related legislation and regulation is being implemented across the world, including in the United States, and any such legislation or regulation may impose additional compliance burdens on us and on third parties in our value chain, which could potentially result in increased operational and administrative costs, decreased demand in the marketplace for our products, and/or increased costs for our supplies and products. For example, policymakers such as the SEC, various US states, and the European UnionEU have adopted (or are considering adopting) rules for various climate- or ESG-related disclosures or actions.actions including extended producer responsibility obligations that relate to our product packaging. While certain of these rules have been challenged or paused, the imposition of such obligations either now or in future may cause us to incur significant expenditures, which will then increase our operating expenses. As with other stakeholders, suchSuch regulations are not uniform (and at times may even contradict), which can increase the cost and complexity of compliance, as well as associated risks.

We aim to appropriately consider and manage ESG matters related to our business. However, in light of increasing scrutiny from certain investors, customers, consumers, employees, policymakers and other stakeholders (as well as fragmentation in such stakeholders’ expectations), there can be no certainty that we willmay not manage such issues successfully. Increasingly, both advocates and opponents of certain ESG efforts are resorting to activism, including state-level enforcement actions and private litigation, to advance their perspectives. Responding to such efforts is costly, and any failure to successfully navigate stakeholder expectations or legal requirements (including any novel interpretations of existing laws and regulations) may result in negative publicity, reputational damage, issues with attracting or retaining customers, consumers or employees, regulatory or investor engagement, or other issues, which will adversely affect our business, financial condition, and results of operations. We may be particularly vulnerable to some forms of scrutiny due to our articulated purposes to offer inclusive, accessible, clean, vegan and cruelty free cosmetics and skin care products. Additionally, certain of our stakeholders may be subject to similar risks as described in this risk factor, which may exacerbate or may result in additional or more severe risks to us.

ThereWe are inherentsubject climate-relatedto climate-change related risks whereverand businessesuncertainties, operate.many of which are outside of our control. Extreme weather events and other natural disasters—such as storms, wildfires, floods, droughts, and earthquakes—can damage facilities or otherwise disrupt our operations or those of our value chain. Climate change is expected to increase the intensity and frequency of such phenomena, as well as result in various chronic changes (such as sea-level rise and changes in meteorological, hydrological, and biological patterns) that may result in similar risks. Attention to climate change, as well as efforts by various stakeholders to transition to a low-carbon society, may also result in various risks, including from changes in regulation and consumer behavior.behavior and increased litigation. For more information, see our risk factor “Our business could be negatively impacted by corporate citizenship and sustainability matters.”

On August 27, 2024, we announced that our board of directors authorized a new share repurchase program allowing us to repurchase up to $500.0 million of our outstanding shares of common stock (the “2024 Share Repurchase Program”), of which $400.0$350.0 million remains available for future share repurchases as of DecemberJune 31,30, 2025.2026. Purchases under the 2024 Share Repurchase Program may be made from time to time in the open market, in privately negotiated transactions, block trades, accelerated share repurchase transactions, purchases through 10b5-1 trading plans, or by any combination of such methods. The timing and amount of any repurchases pursuant to the 2024 Share Repurchase Program will be determined based on market conditions, share price and other factors. The 2024 Share Repurchase Program does not have an expiration date, does not require us to repurchase any specific number of shares of our common stock, and may be modified, suspended or terminated at any time without notice. There is no guarantee that any additional shares will be purchased under the 2024 Share Repurchase Program. Any shares that will be repurchased are intended to be retired after purchase. Additionally, the Inflation Reduction Act of 2022 introduced a 1% excise tax on share repurchases, which has increased the costs associated with repurchasing shares of our common stock. Even if our share repurchase programs are fully implemented, they may not enhance long-term stockholder value or may not prove to be the best use of our cash. Share repurchases could have an impact on our share trading prices, increase the volatility of the price of our common stock, or reduce our available cash balance such that we will be required to seek financing to support our operations.

We had approximately 190.9191.0 million shares of common stock authorized but unissued and 59.159.0 million shares of common stock outstanding as of JanuaryJuly 29,30, 2026. Our amended and restated certificate of incorporation authorizes us to issue these shares of common stock and stock options exercisable for common stock (and other equity awards) for the consideration and on the terms and conditions established by our board of directors in its sole discretion, whether in connection with acquisitions or otherwise. Any common stock that we issue, including under our existing equity incentive plans or any additional equity incentive plans that we may adopt in the future, would dilute the percentage ownership held by existing investors. In connection with our acquisition of Naturium, we issued 577,659 shares of the Company’s common stock, with a fair market value of $57.8 million as of the date of the acquisition of Naturium.acquisition. In connection with our acquisition of rhode, we issued 2,582,371 shares of the Company’s common stock, with a fair market value of $300.3 million as of the date of the acquisition of rhode.acquisition.

The Company's family of brands includesconsists of e.l.f. Cosmetics, e.l.f. SKIN, Naturium,e.l.f. Hair, rhode, Naturium and Well People, Keys Soulcare, and rhode.People. The Company's brands are available online and across leading beauty, mass-market and specialty retailers. The Company has strong relationships with its retail customers such as Target, Walmart, UltaAmazon, Beauty, AmazonSephora and other leading retailers that have enabled the Company to expand distribution both domestically and internationally.

PotentialUpdate Impact ofon Tariffs

The majorityMany of our products are sourced and manufactured in China and have been subject to a US 25% tariff since May 2019. Furthermore, in March and AprilThroughout 2025, thewe Trumpwere administrationsubject announcedto a seriesrange of additionaltariff tariffsrates on productsimports from countriesChina worldwide.ranging Sincefrom then,25% someto ofas thesehigh tariffsas have been increased, reduced, or temporarily paused.170%.

See the risk factor titled “AdditionalChanges in the US tariffsand orinternational othertrade policies, including tariffs, trade restrictions placed on imports,and retaliatory trade measures taken by other countries and resulting trade wars may have a material adverse impact on our business, financial condition and results of operations” included as part of Item 1A. Risk Factorsfactors of this Quarterly Report on Form 10-Q for additional information regarding risk related to tariffs.

On August 5, 2025, we consummated the acquisition of HRBeauty LLC (“rhode”),rhode, the fast-growing, multi-category lifestyle beauty brand founded by Hailey Bieber for a purchase price of $897.5 million in a combination of cash, equityshares consideration,of our common stock, and a potential earnout. See Note 3, “Acquisition,” in the Notes to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

Comparison of the three months ended DecemberJune 31,30, 20252026 to the three months ended DecemberJune 31,30, 20242025

Net sales increased $134.2$125.6 million, or 38%,36%, to $489.5$479.4 million for the three months ended DecemberJune 31,30, 2025,2026, compared to $355.3$353.7 million for the three months ended DecemberJune 31,30, 2024.2025. Net sales growth was driven by strong performance in both our retailer and e-commerce channels. The rhode Acquisition contributed $128.2 million to our growth in the three months ended December 31, 2025, with the remaining $6.0 million contributed from our existing business. Net sales increased $67.5$80.0 million, or 101%,129%, in our e-commerce channels and $66.8$45.6 million, or 23%,16%, in our retailer channels. From a price and mix perspective, higher average item price and mix drove $136.0$137.4 million increase in net sales as compared to the three months ended DecemberJune 31,30, 2024.2025. This was partially offset by lower volume impactingreducing net sales by $1.8$11.7 million.

Gross profit increased $94.2$154.3 million, or 37%,63%, to $347.5$398.8 million for the three months ended DecemberJune 31,30, 2025,2026, compared to $253.3$244.5 million for the three months ended DecemberJune 31,30, 2024.2025. HigherThis growth was inclusive of the benefit from a $50.1 million IEEPA tariff refund recognized as a reduction in cost of sales during the three months ended June 30, 2026. The remaining growth was primarily driven by a higher average item price and mix which drove an increase of $95.5$112.3 million, offset by lower volume impacting gross profit by $1.3$8.1 million. Gross margin decreasedincreased approximately 301,400 basis points to 71%83% when compared to the three months ended DecemberJune 31,30, 2024.2025, Theincluding decreaseapproximately in1,050 grossbasis marginpoints wasbenefit from the IEEPA tariff refunds, with the remaining increase primarily driven by tariffs, partially offset by pricing and mix.lower year-over-year tariff rates.

SG&A expenses were $280.0$280.3 million for the three months ended DecemberJune 31,30, 2025,2026, an increase of $61.7$84.5 million, or 28%,43%, from $218.2$195.8 million for the three months ended DecemberJune 31,30, 2024.2025. The $61.7$84.5 million increase was primarily related to an increaseincreases in marketing, merchandising and distribution costs of $24.7$49.9 million, increased compensation and benefits expense of $22.0$18.6 million, and increased depreciation and amortization of $9.9 million, and increased professional fees $2.1$12.9 million.

Other expense, net totaled $1.3$0.3 million for the three months ended DecemberJune 31,30, 2025,2026, as compared to other expense,income, net of $5.3$5.0 million for the three months ended DecemberJune 31,30, 2024.2025. The year-over-year variance iswas primarily due to ana decrease in foreign currency exchange lossgain in the period primarily attributable to foreign currency rate fluctuation between the British pound and US dollar.

Interest expense, net was $12.4$7.8 million for the three months ended DecemberJune 31,30, 2025,2026, as compared to $3.5$2.6 million for the three months ended DecemberJune 31,30, 2024.2025. The year-over-year variance was primarily due to the Fifth Amendment which established the Term Facility and increased our outstanding debt. See Note 6, “Debt,” in the Notes to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details on our debt. The increase was partially offset by $2.1 million of interest income associated with the IEEPA refunds received during the three months ended June 30, 2026.

The income tax provision was $14.5$27.7 million, or an effective rate of 26.9%,29.4%, for the three months ended DecemberJune 31,30, 2025,2026, as compared to a provision of $9.0$17.8 million, or an effective rate of 34.3%,34.8%, for the three months ended DecemberJune 31,30, 2024.2025. The change in the income tax provision was primarily driven by the tax effects of an increase in income before taxes of $27.6$43.2 million, whichand wasa partially offset by an increasedecrease in discrete tax benefits of $4.2$17.3 million, primarily related to stock-based compensation.compensation and the tax effects of IEEPA tariff refunds and associated interest.

As of DecemberJune 31,30, 2025,2026, we had $196.8$344.2 million of cash and cash equivalents. In addition, as of DecemberJune 31,30, 2025,2026, we had borrowing capacity of $243.3 million under our Amended Revolving Credit Facility.

Our primary cash needs are for working capital, fixturing, retail product displays,displays and digital investments and debt service.investment. We have also used cash for acquisitions. Cash needs typically vary depending on strategic initiatives selected for the fiscal year, including investments in infrastructure, digital capabilities and expansion within or to additional retailer store locations. We expect to fund ongoing cash needs from existing cash and cash equivalents, cash generated from operations and, if necessary, draws on our Amended Revolving Credit Facility.

Our primary working capital requirements are for product and product-related costs, compensation and benefits,payroll, rent, distribution costs and marketing. Fluctuations in working capital are primarily driven by the timing of when a retailer rearranges or restocks its products, expansion of space within our existing retailer base, expansion to new retailers and the general seasonality of our business. As of DecemberJune 31,30, 2025,2026, we had working capital, excluding cash and cash equivalents, of $250.5$177.9 million, compared to $214.8$163.5 million as of March 31, 2025.2026. Working capital, excluding cash and cash equivalents and debt, was $280.5$207.9 million and $214.8$193.5 million as of DecemberJune 31,30, 20252026 and March 31, 2025,2026, respectively.

We believe that our operating cash flow, existing cash and cash equivalents and available financing under the Amended Revolving Credit Facility will be adequate to meet our planned operating, investing and financing needs for the next twelve months. The unused balance of the Amended Revolving Credit Facility as of DecemberJune 31,30, 20252026 was $243.3 million. If necessary, we can borrow funds under our Amended Revolving Credit Facility to finance our liquidity requirements, subject to customary borrowing conditions. To the extent additional funds are necessary to meet our long-term liquidity needs as we continue to execute our business strategy, we anticipate that they will be obtained through the incurrence of additional indebtedness, additional equity financings or a combination of these potential sources of funds; however, such financing may not be available on favorable terms, or at all.

Our ability to meet our operating, investing and financing needs depends to a significant extent on our future financial performance, which will be subject in part to general economic, competitive, financial, regulatory and other factors that are beyond our control, including those described elsewhere in Part II, Item 1A1A. “Risk factors.” In addition to these general economic and industry factors, the principal factors in determining whether our cash flows will be sufficient to meet our liquidity requirements will be basedrely on our ability to provide innovative products to our customers,consumers, manage production and our supply chain.

Cash provided by (used in) operating activities

For the ninethree months ended DecemberJune 31,30, 2025,2026, net cash provided by operating activities was $110.1$111.7 million. This included net income as adjusted for depreciation, amortization and other non-cash items of $225.3$133.9 million, which is inclusive of $52.1 million benefit from IEEPA tariff refunds, partially offset by acquisition-related seller expenses of $47.1 million in connection with the rhode Acquisition, and an increase in working capital of $68.1$22.2 million. The changeincrease in working capital was primarily driven by a $53.5$26.5 million increase in inventory, a $2.4 million decrease in accounts payable and accrued expenses, and a $1.7 million decrease related to other liabilities, partially offset by an $8.2 million decrease in prepaid expense and other assets, a $32.6 million increase in accounts receivable, partially offset byand a $9.8 million increase in accounts payable and accrued expenses, a $7.4$0.2 million decrease in inventory,accounts and a $0.8 million increase related to other liabilities.receivable.

For the ninethree months ended DecemberJune 31,30, 2024,2025, net cash usedprovided inby operating activities was $2.3$27.2 million. This included an increase in working capital of $178.1 million, partially offset by net income as adjusted for depreciation, amortization and other non-cash items of $175.8$74.5 million, partially offset by an increase in working capital of $47.2 million. The increase in working capital was primarily driven by a $77.5$46.2 million increase in accounts receivable, a $16.3 million increase in prepaid expense and other assets, a $65.1 million increase in accounts receivable, a $23.7 million increase in inventory, a $6.1 million decrease related to other liabilities, and a $5.7$1.5 million decrease in accounts payable and accrued expenses.expenses, and a $1.9 million decrease related to other liabilities, partially offset by an $18.7 million decrease in inventory.

For the ninethree months ended DecemberJune 31,30, 2024,2026, net cash used in investing activities was $7.7$1.7 million primarily consisting of capital expenditures related to fixturing, equipment and software.

For the ninethree months ended DecemberJune 31,30, 2025, net cash providedused byin financinginvesting activities was $540.9$7.6 million primarily drivenconsisting byof proceedscapital fromexpenditures therelated Fifthto Amendmentfixturing, which established the Term Facilityequipment and increased debt, partially offset by the repurchase of our common stock.software.

For the ninethree months ended DecemberJune 31,30, 2024,2026, net cash used in financing activities was $24.3$55.5 million primarily driven by repurchases of our common stock of $17.1$50.0 million and repaymentrepayments on the Amended Term Loan Facility of $8.1$7.5 million, partially offset by cash received from the exercise of stock options.

On August 28, 2023, we entered into the Second Amendment to Amended and Restated Credit Agreement (the “Second Amendment”). Pursuant to the Second Amendment, we borrowed incremental term loans in an aggregate original principal amount of $115.0 million under the Amended Credit Agreement (the “Incremental Term Loan”). We used the Incremental Term Loan, together with cash from our balance sheet and additional borrowings under our Amended Revolving Credit Facility, to consummate the Acquisitionacquisition of Naturium (as defined in Note 3, “Acquisitions,” in the Notes to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q) and to pay related fees and expenses in connection with the Acquisitionacquisition of Naturium and Second Amendment.

On August 5, 2025, we entered into the Fifth Amendment to Amended and Restated Credit Agreement (the “Fifth Amendment”).Amendment. The Fifth Amendment, among other things, established a term loan facility in an aggregate original principal amount of $600.0 million (the “Term Facility”),Facility, made customary changes in connection with adding a term loan facility, increased the maximum permitted consolidated total net leverage ratio financial covenant, increased the interest rate margin for loans under our existing Revolving Credit Facility and increased the unused line fee under our existing Revolving Credit Facility. The proceeds of the Term Facility were made available to e.l.f. Cosmetics and certain of our other subsidiaries to pay a portion of the consideration for the acquisitionrhode of rhode.Acquisition. The maturity date of the Term Facility is March 3, 2030.

The interest rate as of DecemberJune 31,30, 20252026 for the TermAmended FacilityCredit Agreement was approximately 5.9%.5.4%.

The interest rate as of DecemberJune 31,30, 20252026 for the Revolving Credit Facility was approximately 5.8%.5.4%. The unused balance of the Revolving Credit Facility as of DecemberJune 31,30, 20252026 was $243.3 million.