v3.26.1
Acquisitions
 12 Months Ended
Mar. 31, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisitions Acquisitions
rhode Acquisition
On August 5, 2025, the Company consummated the acquisition of rhode, the fast-growing, multi-category lifestyle beauty brand founded by Hailey Bieber known for its collection of high-performance, skin-focused products. The rhode Acquisition is built upon both brands' shared focus on disruption, community connection and product innovation, and furthers the Company’s penetration within skin care. The rhode Acquisition was completed pursuant to the Agreement and Plan of Merger, by and among the Company, e.l.f. Cosmetics, Inc., Glaze Merger Sub, LLC (“Merger Sub”), HRBeauty LLC, the sellers identified therein, and David Levin (as the sellers’ representative), dated May 28, 2025 (the “Merger Agreement”). Pursuant to the terms of, and subject to the conditions specified in, the Merger Agreement, Merger Sub merged with and into rhode (the “Merger”), and upon consummation of the Merger, Merger Sub ceased to exist and rhode became a wholly owned subsidiary of e.l.f. Cosmetics, Inc. Upon the consummation of the Merger and the other transactions contemplated by the Merger Agreement, all outstanding limited liability company interests of rhode were cancelled and converted into the right to receive the consideration. The rhode Acquisition was accounted for as a business combination using the acquisition method of accounting, which requires certain assets acquired and liabilities assumed to be recognized at the estimated fair values as of the date of the rhode Acquisition. The total purchase price of $897.5 million consisted of cash, shares of our common stock, and a potential earnout. The following table summarizes the preliminary allocation of purchase price to the assets acquired and liabilities assumed (in thousands):
Cash consideration$590,149 
Equity consideration (common stock issued)(1)
300,278 
Valuation of potential earnout7,100 
Total consideration897,527 
Net assets acquired, excluding liability assumed for acquisition-related seller expenses$431,734 
Liability assumed for acquisition-related seller expenses(2)
(47,100)
Less: Net assets acquired(384,634)
Goodwill$512,893 
(1) The fair market value of the $300.3 million common stock issued (equivalent to 2,582,371 shares of common stock) was determined on the basis of the opening market price of the Company’s stock of $116.28 per share on the rhode Acquisition date.
(2) In connection with the rhode Acquisition, the Company paid rhode’s acquisition-related expenses of $47.1 million recognized as an assumed liability at the acquisition date. The Company determined these amounts represented assumed liabilities of the sellers at the acquisition date, as the Company bore no legal obligation to the related vendors prior to closing.

The Company incurred and expensed acquisition transaction costs of $0.5 million and $7.7 million during the three and twelve months ended March 31, 2026, respectively. These costs are included as a component of selling, general and administrative expenses in the condensed consolidated statements of operations.
The purchase price allocation, deferred tax calculations and residual goodwill are preliminary and pending finalization. rhode’s results of operations have been included in the Company's condensed consolidated financial statements from the date of acquisition.

The following table presents the preliminary purchase price allocation recorded in the Company's condensed consolidated balance sheet on the rhode Acquisition date (in thousands):
Cash$8,467 
Accounts receivable30,036
Inventory39,568
Prepaid expenses and other current assets2,392
Property and equipment2,098
Intangible assets380,900
Goodwill(1)
512,893
Total assets acquired976,354 
Accounts payable(17,898)
Accrued expenses and other current liabilities(60,861)
Other obligations(68)
Total liabilities assumed(78,827)
Total purchase price$897,527 
(1) The goodwill represents the excess value over both tangible and intangible assets acquired and liabilities assumed. The goodwill recognized in the transaction is primarily attributable to the Company’s expectation that rhode can continue to expand distribution and deliver new skin care products. A substantial amount of the goodwill is expected to be deductible for tax purposes.
The Company made certain measurement period adjustments resulting in an increase to goodwill of $0.7 million and $1.6 million for the three and twelve months ended March 31, 2026, respectively. None of the adjustments were material.
Intangible assets
The estimated fair values (all considered level 3 measurements) of the identifiable intangible assets acquired as of the rhode Acquisition date, their estimated useful lives and fair value methodology are as follows:
Fair ValueEstimated Useful Life
(in thousands)(in years)Fair Value Methodology
Customer relationships – retailers$104,600 12Excess earnings method
Trademarks276,300 15Relief from Royalty method
Total identified intangible assets$380,900 
Valuation of potential earnout
In connection with the rhode Acquisition, the Company initially recorded a liability for contingent consideration of $7.1 million, payable upon achievement of certain earnout milestones by 2028, with a maximum cash payment of $200.0 million. As of March 31, 2026, the contingent consideration was remeasured to $64.7 million, driven by the outperformance of rhode's revenue results for the fiscal year ended March 31, 2026, and a revised upward forecast for the remainder of the performance periods. The Company considered the time value of money in evaluating the fair value of the contingent consideration. The fair value of the liability is calculated using Monte Carlo simulation based on corresponding projected revenue. In accordance, the volatility and discount rate was adjusted to reflect the risk profile of recurring revenue. This amount is reflected as "Contingent consideration" on the consolidated balance sheets. The fair value adjustment of $57.6 million was recognized in “Change in fair value of contingent consideration” within the consolidated statement of operations. If the earnout milestones are not met, no payment will be made.

The measurement includes significant inputs not observable in the market and thus represents a level 3 measurement as defined in ASC 820, “Fair Value Measurement”.
Certain financial information
Since the rhode Acquisition date, the results of operations for rhode of $293.5 million of net sales and $112.8 million of net income for the fiscal year ended March 31, 2026, have been included within the accompanying consolidated statements of operations.
The net sales and net income of the combined companies on an unaudited pro forma basis are presented below, had the rhode Acquisition date been April 1, 2024. The unaudited pro forma financial information includes, where applicable, adjustments for (i) amortization expense related to acquired intangible assets, (ii) additional interest expense for borrowings related to funding the rhode Acquisition, and (iii) associated tax-related impacts of adjustments. These pro forma adjustments are based on the available information as of the date hereof and upon assumptions that the Company believes are reasonable to reflect the impact of the rhode Acquisition with the Company's historical financial information on a pro forma basis. Adjustments do not include costs related to integration activities, cost savings, or synergies that have been or may be achieved by the combined business. The net sales and net income of the combined companies on an unaudited pro forma basis, are as follows (in thousands):
 Fiscal year ended March 31,
20262025
Net sales$1,734,394 $1,525,726 
Net income30,054 114,829 
The unaudited pro forma financial information shown in the table above is presented for informational purposes only and are not indicative of the results of operations that would have been achieved if the rhode Acquisition had taken place at April 1, 2024 (the beginning of comparable period presented).
Naturium Acquisition
On October 4, 2023, the Company, through its wholly owned subsidiary, e.l.f. Cosmetics, Inc., completed its acquisition of Naturium LLC (“Naturium”) (including the indirect acquisition of equity interests in Naturium through the purchase of TCB-N Prelude Blocker Corp., a holding company) (the “Naturium Acquisition”), which furthered the Company’s mission to make the best of beauty accessible to every eye, lip, face and skin concern. Naturium is a skin care company that provides clinically effective products at an affordable price. The Company directly and indirectly acquired all rights, title and interest in and to the outstanding equity securities of Naturium for a purchase price of $333.0 million in a combination of cash and Company stock.
The following table summarizes the fair market value of the consideration transferred and how the Company calculates the goodwill resulting from the Naturium Acquisition (in thousands):
Cash consideration$275,266 
Equity consideration (common stock issued)(1)
57,772 
Total consideration transferred333,038 
Less: Net assets acquired
Net assets acquired, excluding liability assumed for acquisition-related seller expenses$174,625 
Liability assumed for acquisition-related seller expenses(2)
(10,549)
Net assets acquired(164,076)
Goodwill$168,962 
(1) The fair market value of the $57.8 million common stock issued (equivalent to 577,659 shares of common stock) was determined on the basis of the opening market price of the Company’s stock of $100.01 per share on the Naturium Acquisition date.
(2) In connection with the Naturium Acquisition, the Company paid Naturium’s acquisition-related expenses of $10.5 million recognized as an assumed liability at the Naturium Acquisition date.
The Company incurred and expensed acquisition transaction costs of $0.4 million during the fiscal year ended March 31, 2025, which are included as a component of selling, general and administrative expenses in the consolidated statements of operations. No acquisition transaction costs related to the Naturium Acquisition were incurred during the fiscal year ended March 31, 2026.

The Naturium Acquisition has been accounted for as a business combination under the acquisition method and, accordingly, the total purchase price is allocated to the tangible and intangible assets acquired and the liabilities assumed based on their respective fair values on the Naturium Acquisition date. The purchase price allocation, deferred tax calculations and residual goodwill were finalized during the quarter ended September 30, 2024. Naturium’s results of operations have been included in the Company's consolidated financial statements from the date of acquisition.
The following table presents the purchase price allocation recorded in the Company's condensed consolidated balance sheet on the Naturium Acquisition date and upon finalization during the quarter ended September 30, 2024. The adjustment reflects finalization of purchase accounting for facts and circumstances that existed upon the Naturium Acquisition date as follows (in thousands):
Cash$293 
Accounts receivable7,388 
Inventory16,236 
Prepaid expenses and other current assets1,899 
Goodwill(1)
168,962 
Intangible assets 162,100 
Total assets acquired356,878 
Accounts payable(15,897)
Accrued expenses and other current liabilities(6,025)
Net deferred tax liability(1,918)
Total liabilities assumed(23,840)
Total purchase price$333,038 
(1) The goodwill represents the excess value over both tangible and intangible assets acquired and liabilities assumed. The goodwill recognized in the transaction is primarily attributable to the Company’s expectation that Naturium can continue to expand distribution and deliver new skin care products. A substantial amount of the goodwill is expected to be deductible for tax purposes.
Intangible assets
The estimated fair values (all considered level 3 measurements) of the identifiable intangible assets acquired as of the Naturium Acquisition date, their estimated useful lives and fair value methodology are as follows:
Fair ValueEstimated Useful Life
(in thousands)(in years)Fair Value Methodology
Customer relationships – retailers$20,000 10Excess earnings method
Customer relationships – e-commerce17,600 3Excess earnings method and with and without method
Trademarks124,500 15Relief from Royalty method
Total identified intangible assets$162,100 
Certain financial information (unaudited)
The amounts of Naturium’s net sales included in the Company's condensed consolidated financial statements from the date of acquisition and the net sales of the combined companies on an unaudited pro forma basis, had the acquisition date been April 1, 2022, are as follows (in thousands):
 Amount
Actual Naturium net sales from October 4, 2023 to March 31, 2024$53,421 
Supplemental pro forma combined net sales for the fiscal year ended March 31, 2024
1,065,726 
The unaudited pro forma financial information shown in the table above are presented for informational purposes only and are not indicative of the results of operations that would have been achieved if the Acquisition had taken place at April 1, 2022 (the beginning of the comparable prior annual reporting period presented in the period of acquisition).
The pro forma earnings of the combined companies are not presented as the effects of the Acquisition in earnings are not material in relation to the overall consolidated financial statements.