e.l.f.(ELF) - 2024 Q4 - Annual Results

Financial Performance Overview Fourth Quarter Fiscal 2024 Performance In Q4 FY2024, e.l.f. Beauty achieved a 71% increase in net sales to $321.1 million, driven by strong performance in retailer and e-commerce channels. Gross margin improved to 71%, and the company marked its 21st consecutive quarter of net sales and market share growth, expanding its market share by 325 basis points - Marked the 21st consecutive quarter of net sales growth and expanded market share by 325 basis points in Q4[2] Q4 Fiscal 2024 Key Financial Metrics | Metric | Q4 FY2024 | Q4 FY2023 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $321.1M | $187.4M | +71% | | Gross Margin | 71% | 69% | +180 bps | | Net Income (GAAP) | $14.5M | $16.2M | -10.6% | | Adjusted Net Income | $30.8M | $23.8M | +29.4% | | Diluted EPS (GAAP) | $0.25 | $0.29 | -13.8% | | Adjusted Diluted EPS | $0.53 | $0.42 | +26.2% | | Adjusted EBITDA | $40.9M | $21.2M | +93% | Full Year Fiscal 2024 Performance For the full fiscal year 2024, the company delivered record performance, with net sales surpassing $1 billion, a 77% increase year-over-year. Gross margin expanded by 330 basis points to 71%, and Adjusted EBITDA more than doubled, growing 101% to $234.7 million - Achieved over $1 billion in net sales for the first time, marking the strongest year of net sales growth on record[1][2] - e.l.f. Cosmetics brand gained market share for the fifth consecutive year[1] Full Year Fiscal 2024 Key Financial Metrics | Metric | FY 2024 | FY 2023 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,023.9M | $578.8M | +77% | | Gross Margin | 71% | 67% | +330 bps | | Net Income (GAAP) | $127.7M | $61.5M | +108% | | Adjusted Net Income | $183.8M | $91.8M | +100% | | Diluted EPS (GAAP) | $2.21 | $1.11 | +99% | | Adjusted Diluted EPS | $3.18 | $1.66 | +92% | | Adjusted EBITDA | $234.7M | $116.8M | +101% | Financial Position and Strategic Moves Balance Sheet Summary As of March 31, 2024, the company held $108.2 million in cash and cash equivalents, a decrease from $120.8 million the previous year. Long-term debt and finance lease obligations increased significantly to $161.8 million from $60.9 million, largely reflecting financing for strategic initiatives Balance Sheet Highlights (as of March 31) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $108.2M | $120.8M | | Long-term debt and finance lease obligations | $161.8M | $60.9M | Naturium Acquisition On October 4, 2023, e.l.f. Beauty completed the acquisition of Naturium, a high-growth skincare brand, for $333.0 million in cash and stock. This strategic move aims to strengthen the company's skincare portfolio and support its mission of making quality beauty accessible - Closed the acquisition of skincare brand Naturium on October 4, 2023[5] - The total consideration for the acquisition was $333.0 million, paid through a combination of cash and company stock[5] Future Outlook Fiscal 2025 Guidance The company projects strong continued growth for fiscal 2025, forecasting a 20-22% increase in net sales to a range of $1,230-$1,250 million. Adjusted EBITDA is expected to be between $285-$289 million, with adjusted diluted EPS anticipated in the range of $3.20-$3.25 Fiscal 2025 Outlook vs. Fiscal 2024 Actuals | Metric | Fiscal 2025 Outlook | Fiscal 2024 Actuals | | :--- | :--- | :--- | | Net sales | $1,230 - $1,250 M | $1,024 M | | Adjusted EBITDA | $285 - $289 M | $235 M | | Adjusted net income | $187 - $191 M | $184 M | | Adjusted diluted EPS | $3.20 - $3.25 | $3.18 | - The outlook for fiscal 2025 reflects an expected 20-22% increase in net sales compared to fiscal 2024[6] Detailed Financial Statements (GAAP) Consolidated Statements of Operations The consolidated statements of operations detail the company's financial performance, showing a significant increase in net sales from $578.8 million in FY2023 to $1,023.9 million in FY2024. Net income more than doubled, rising from $61.5 million to $127.7 million Consolidated Statements of Operations (Year-End) | (in thousands) | Twelve months ended March 31, 2024 | Twelve months ended March 31, 2023 | | :--- | :--- | :--- | | Net sales | $1,023,932 | $578,844 | | Gross profit | $724,096 | $390,396 | | Operating income | $149,678 | $68,143 | | Net income | $127,663 | $61,530 | | Diluted EPS | $2.21 | $1.11 | Consolidated Balance Sheets The balance sheet as of March 31, 2024, reflects significant growth, with total assets nearly doubling to $1.13 billion from $595.6 million in the prior year. This growth was driven by increases in goodwill and intangible assets, largely due to the Naturium acquisition, and financed through increased debt and equity Consolidated Balance Sheet Highlights | (in thousands) | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Total current assets | $477,077 | $303,325 | | Total assets | $1,129,247 | $595,601 | | Total current liabilities | $299,115 | $107,976 | | Total liabilities | $486,675 | $184,584 | | Total stockholders' equity | $642,572 | $411,017 | Consolidated Statements of Cash Flows For fiscal year 2024, net cash provided by operating activities was $71.2 million, a decrease from $101.9 million in the prior year, primarily due to significant investments in inventory and accounts receivable to support growth. Net cash used in investing activities was $284.7 million, mainly for the Naturium acquisition, while financing activities provided $200.9 million Consolidated Cash Flow Summary (Year-End) | (in thousands) | Twelve months ended March 31, 2024 | Twelve months ended March 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $71,154 | $101,883 | | Net cash used in investing activities | ($284,660) | ($1,723) | | Net cash provided by (used in) financing activities | $200,945 | ($22,735) | | Net (decrease) increase in cash | ($12,595) | $77,425 | | Cash and cash equivalents - end of period | $108,183 | $120,778 | Non-GAAP Financial Measures and Reconciliations Explanation of Non-GAAP Measures The company utilizes non-GAAP measures such as adjusted EBITDA, adjusted SG&A, and adjusted net income to provide supplemental insight into its operating performance. These measures exclude items like stock-based compensation, acquisition-related costs, and other non-recurring expenses to facilitate comparison - The company presents non-GAAP measures because management uses them as supplemental tools to assess operating performance and believes they are helpful for investors[12] - Key adjustments to derive non-GAAP figures include excluding expenses related to stock-based compensation, impairment of equity investment, loss on extinguishment of debt, amortization of acquired intangibles, and other non-recurring items like acquisition and ERP implementation costs[13][14][16] Reconciliation of Net Income to Adjusted EBITDA For fiscal year 2024, GAAP Net Income of $127.7 million was reconciled to an Adjusted EBITDA of $234.7 million. Key adjustments included adding back interest, taxes, depreciation & amortization, as well as $40.6 million in stock-based compensation and $13.1 million in other non-recurring items Reconciliation to Adjusted EBITDA (Year-End) | (in thousands) | Twelve months ended March 31, 2024 | Twelve months ended March 31, 2023 | | :--- | :--- | :--- | | Net income (GAAP) | $127,663 | $61,530 | | EBITDA | $178,180 | $84,108 | | Stock-based compensation | $40,625 | $29,117 | | Other non-cash and non-recurring items | $13,061 | $3,380 | | Adjusted EBITDA (Non-GAAP) | $234,741 | $116,781 | Reconciliation of SG&A to Adjusted SG&A GAAP Selling, General, and Administrative (SG&A) expenses for fiscal year 2024 were $574.4 million. After excluding $40.6 million in stock-based compensation and $7.4 million in non-recurring items (like ERP implementation and acquisition costs), Adjusted SG&A was $526.4 million Reconciliation to Adjusted SG&A (Year-End) | (in thousands) | Twelve months ended March 31, 2024 | Twelve months ended March 31, 2023 | | :--- | :--- | :--- | | SG&A expenses (GAAP) | $574,418 | $322,253 | | Stock-based compensation | ($40,609) | ($29,005) | | Other non-recurring items | ($7,401) | — | | Adjusted SG&A (Non-GAAP) | $526,408 | $293,248 | Reconciliation of Net Income to Adjusted Net Income The company's fiscal year 2024 GAAP Net Income of $127.7 million was adjusted to $183.8 million on a non-GAAP basis. Major adjustments included adding back stock-based compensation ($40.6 million) and amortization of acquired intangibles ($15.0 million), net of tax impacts Reconciliation to Adjusted Net Income (Year-End) | (in thousands) | Twelve months ended March 31, 2024 | Twelve months ended March 31, 2023 | | :--- | :--- | :--- | | Net income (GAAP) | $127,663 | $61,530 | | Stock-based compensation | $40,625 | $29,117 | | Amortization of acquired intangible assets | $15,047 | $8,122 | | Adjusted net income (Non-GAAP) | $183,766 | $91,813 | | Adjusted diluted EPS | $3.18 | $1.66 |