IT'S AN WORLD AFTER ALL CHAIRMAN & CHIEF EXECUTIVE OFFICER TARANG AMIN As a reminder, this presentation contains forward-looking statements that are based on management's expectations – including those relating to the category trends and longer-term outlook – and are subject to known and unknown risks and uncertainties, and therefore, actual results may differ materially. Important factors that may cause actual results to differ are detailed in the company's SEC filings. In addition, the company's presentat ...

Financial Data and Key Metrics Changes - In Q3, net sales grew by 38% year-over-year, with adjusted EBITDA increasing by 79% [3][29] - The acquisition of Rhode contributed approximately $128 million, or about 36 percentage points, to Q3 net sales growth [29] - Q3 gross margin was 71%, down approximately 30 basis points year-over-year but up 200 basis points sequentially from Q2 [30] - Adjusted net income was $74 million, or $1.24 per diluted share, compared to $43 million, or $0.74 per diluted share a year ago [31] Business Line Data and Key Metrics Changes - e.l.f. Cosmetics brand grew 8% in the U.S., outperforming the category by two times [3] - e.l.f. Skin consumption grew 16% in the U.S., also outperforming the category by two times [4] - Naturium, acquired two years ago, continues to drive strong growth, while Rhode achieved the No. 1 brand ranking in Sephora North America [4][26] Market Data and Key Metrics Changes - U.S. net sales grew by 36% year-over-year, while international net sales grew by 44% [30] - The company increased its market share by 130 basis points, the largest share gain among over 700 cosmetics brands tracked by Nielsen [4] - International sales account for approximately 20% of total net sales, compared to legacy peers with over 70% [28] Company Strategy and Development Direction - The company aims to democratize access to beauty with a value proposition that offers products at accessible price points [6] - Plans for spring 2026 include expanding retail space within Ulta Beauty in the U.S. and launching with DM in Germany [25] - The company is focused on innovation and disruptive marketing to fuel brand awareness and deepen community connections [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue gaining market share and delivering growth, despite some softness in the UK and Germany [29][30] - The outlook for fiscal 2026 has been raised, expecting net sales growth of approximately 22%-23% year-over-year, up from 18%-20% previously [33] - Management noted that global consumption growth is expected to be around 6%, with some headwinds from pipeline dynamics [35] Other Important Information - The company ended the quarter with $197 million in cash on hand, compared to $74 million a year ago [32] - The company repurchased approximately $50 million of outstanding common stock during the quarter [32] - The marketing spend for the quarter was 21% of net sales, down from 27% in Q3 of the previous year [31] Q&A Session Summary Question: Can you elaborate on your approach to spending and guidance? - Management indicated that the adjusted EBITDA margin for the second half is expected to be around 19%, up from 17% previously, due to timing shifts in costs and increased marketing spend [41][42] Question: What is the plan for expanding Rhode at a faster pace? - Management emphasized the importance of maintaining quality in launches rather than rushing expansion, noting strong demand for Rhode [43][44] Question: What strategies are in place to drive growth for the core e.l.f. brand? - Management highlighted the importance of innovation and market share gains, noting that the brand is the most productive in terms of sales per linear foot [46][47] Question: Can you provide an update on the base e.l.f. Cosmetics business in the U.S.? - Management reported that the brand is healthy, with a successful price increase and strong consumer acceptance [52][53] Question: What are the plans for innovation and portfolio around Rhode in the U.S.? - Management mentioned ongoing innovation efforts, including new product launches and a focus on maintaining momentum [55][56]