elf-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

_______________________________________________________________

FORM 10-Q

_______________________________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from ______ to ______

Commission File Number: 001-37873

_______________________________________________________________

e.l.f. Beauty, Inc.

(Exact name of registrant as specified in its charter)

_______________________________________________________________


Delaware						46-4464131
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


570 10th Street
Oakland,	CA	94607

(Address of principal executive offices)(Zip code)

_______________________________________________________________


(510)			778-7787

(Registrant’s telephone number, including area code)

_______________________________________________________________


Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	ELF	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐

Non- accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

The number of shares of the registrant’s common stock, par value $0.01 per share, outstanding as of August 1, 2024 was 56,388,228 shares.

CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements within the meaning of the federal securities laws concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business operations and financial performance and condition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” ”believe,” “contemplate,” “continue,” "could,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements are based on management's current expectations, estimates, forecasts and projections about our business and the industry in which we operate and management’s beliefs and assumptions and are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. Although we believe that the expectations reflected in the forward-looking statements contained herein are reasonable, our actual results and the timing of selected events may differ materially. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under “Risk factors” in Part II, Item 1A of this Quarterly Report and elsewhere in this Quarterly Report. Potential investors are urged to consider these factors carefully in evaluating the forward-looking statements. These forward-looking statements speak only as of the date of this Quarterly Report. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

SUMMARY OF MATERIAL RISKS ASSOCIATED WITH OUR BUSINESS

The principal risks and uncertainties affecting our business include the following:

•The beauty industry is highly competitive, and if we are unable to compete effectively our results will suffer.

•Our new product introductions may not be as successful as we anticipate.

•Any damage to our reputation or brands may materially and adversely affect our business, financial condition and results of operations.

•Our success depends, in part, on the quality, performance and safety of our products.

•We may not be able to successfully implement our growth strategy.

•Our growth and profitability are dependent on a number of factors, and our historical growth may not be indicative of our future growth.

•We may be unable to continue to grow our business effectively or efficiently, which would harm our business, financial condition and results of operations.

•Acquisitions or investments, such as our acquisition of Naturium LLC, could disrupt our business and harm our financial condition.

•A disruption in our operations, including a disruption in the supply chain for our products, could materially and adversely affect our business.

•We rely on a number of third-party suppliers, manufacturers, distributors and other vendors, and they may not continue to produce products or provide services that are consistent with our standards or applicable regulatory requirements, which could harm our brands, cause consumer dissatisfaction, and require us to find alternative suppliers of our products or services.

•Adverse economic conditions in the United States or any of the other countries in which we conduct significant business could negatively affect our business, financial condition and results of operations.

•We depend on a limited number of retailers for a large portion of our net sales, and the loss of one or more of these retailers, or business challenges at one or more of these retailers, could adversely affect our results of operations.

•We have significant operations in China, which exposes us to risks inherent in doing business in that country.

•We are subject to international business uncertainties.

•If we are unable to protect our intellectual property, the value of our brands and other intangible assets may be diminished, and our business may be adversely affected.

•Our success depends on our ability to operate our business without infringing, misappropriating or otherwise violating the trademarks, patents, copyrights and other proprietary rights of third parties.

The summary risk factors described above should be read together with the text of the full risk factors below in the section titled “Risk factors” and the other information set forth in this Quarterly Report, including our unaudited condensed consolidated financial statements and the related notes, as well as in other documents that we file with the U.S. Securities and Exchange Commission (the “SEC”). The risks summarized above or described in the section titled “Risk factors” are not the only risks that we face. Additional risks and uncertainties not precisely known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, results of operations and future growth prospects.

e.l.f. Beauty, Inc.

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PART I. FINANCIAL INFORMATION			5
Item 1. Financial statements (unaudited)			5
Condensed consolidated balance sheets			5
Condensed consolidated statements of operations			6

Condensed consolidated statements of comprehensive income			7
Condensed consolidated statements of stockholders’ equity			8
Condensed consolidated statements of cash flows			9
Notes to condensed consolidated financial statements (unaudited)			10

Item 2. Management’s discussion and analysis of financial condition and results of operations			21

Item 3. Quantitative and qualitative disclosures about market risk			26

Item 4. Controls and procedures			26

PART II. OTHER INFORMATION			27

Item 1. Legal proceedings			27

Item 1A. Risk factors			27

Item 2. Unregistered sales of equity securities and use of proceeds			55

Item 3. Defaults upon senior securities			56

Item 4. Mine safety disclosures			56

Item 5. Other information			56

Item 6. Exhibits			57

SIGNATURES			58

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PART I. FINANCIAL INFORMATION

Item 1. Financial statements (unaudited)

e.l.f. Beauty, Inc. and subsidiaries

Condensed consolidated balance sheets

(unaudited)

(in thousands, except share and per share data)


	June 30, 2024		March 31, 2024		June 30, 2023
Assets
Current assets:
Cash and cash equivalents	$	109,034	$	108,183	$	142,549
Accounts receivable, net	155,701		123,797		90,531
Inventory, net	199,563		191,489		98,053
Prepaid expenses and other current assets	66,162		53,608		39,276
Total current assets	530,460		477,077		370,409
Property and equipment, net	14,040		13,974		7,581
Intangible assets, net	220,745		225,094		76,013
Goodwill	340,600		340,600		171,620
Other assets	98,987		72,502		32,258
Total assets	$	1,204,832	$	1,129,247	$	657,881

Liabilities and stockholders' equity
Current liabilities:
Current portion of long-term debt and finance lease obligations	$	102,938	$	100,307	$	5,431
Accounts payable	79,989		81,075		53,237
Accrued expenses and other current liabilities	116,878		117,733		51,037
Total current liabilities	299,805		299,115		109,705
Long-term debt and finance lease obligations	159,234		161,819		59,612
Deferred tax liabilities	7,910		3,666		5,855
Long-term operating lease obligations	33,637		21,459		10,137
Other long-term liabilities	656		616		870
Total liabilities	501,242		486,675		186,179

Commitments and contingencies (Note 7)

Stockholders' equity:
Common stock, par value of $0.01 per share; 250,000,000 shares authorized as of June 30, 2024, March 31, 2024 and June 30, 2023; 56,387,461, 55,583,660 and 54,417,579 shares issued and outstanding as of June 30, 2024, March 31, 2024 and June 30, 2023, respectively	563		555		543
Additional paid-in capital	949,817		936,403		840,181
Accumulated other comprehensive loss	(9)		(50)		—
Accumulated deficit	(246,781)		(294,336)		(369,022)
Total stockholders' equity	703,590		642,572		471,702
Total liabilities and stockholders' equity	$	1,204,832	$	1,129,247	$	657,881

The accompanying notes are an integral part of these condensed consolidated financial statements.

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e.l.f. Beauty, Inc. and subsidiaries

Condensed consolidated statements of operations

(unaudited)

(in thousands, except share and per share data)


	Three months ended June 30,
		2024		2023
Net sales		$	324,477	$	216,339
Cost of sales		93,194		63,767
Gross profit		231,283		152,572
Selling, general and administrative expenses		180,575		91,939

Operating income		50,708		60,633
Other income, net		187		399
Impairment of equity investment		—		(1,720)
Interest (expense) income, net		(3,665)		341

Income before provision for income taxes		47,230		59,653
Income tax benefit (provision)		325		(6,676)
Net income		$	47,555	$	52,977

Net income per share:
Basic		$	0.85	$	0.98
Diluted		$	0.81	$	0.93
Weighted average shares outstanding:
Basic		55,973,914		53,938,136
Diluted		58,551,423		57,175,870

The accompanying notes are an integral part of these condensed consolidated financial statements.

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e.l.f. Beauty, Inc. and subsidiaries

Condensed consolidated statements of comprehensive income

(unaudited)

(in thousands)


	Three months ended June 30,
		2024		2023
Net income		$	47,555	$	52,977
Other comprehensive income, net of tax
Foreign currency translation adjustment		41		—
Other comprehensive income, net of tax		41		—
Comprehensive income		$	47,596	$	52,977

The accompanying notes are an integral part of these condensed consolidated financial statements.

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e.l.f. Beauty, Inc. and subsidiaries

Condensed consolidated statements of stockholders’ equity

(unaudited)

(in thousands, except share data)


	Common stock			Additional paid-in capital		Accumulated other comprehensive loss		Accumulated deficit		Total stockholders' equity
	Shares	Amount
Balance as of March 31, 2024	55,508,536	$	555	$	936,403	$	(50)	$	(294,336)	$	642,572
Net income	—	—		—		—		47,555		47,555
Stock-based compensation	—	—		12,958		—		—		12,958
Exercise of stock options and vesting of restricted stock	878,925	8		456		—		—		464
Foreign currency translation adjustment	—	—		—		41		—		41
Balance as of June 30, 2024	56,387,461	$	563	$	949,817	$	(9)	$	(246,781)	$	703,590


	Common stock			Additional paid-in capital		Accumulated other comprehensive loss		Accumulated deficit		Total stockholders' equity
	Shares	Amount
Balance as of March 31, 2023	53,571,577	$	535	$	832,481	$	—	$	(421,999)	$	411,017
Net income	—	—		—		—		52,977		52,977
Stock-based compensation	—	—		7,223		—		—		7,223
Exercise of stock options and vesting of restricted stock	754,953	8		477		—		—		485

Balance as of June 30, 2023	54,326,530	$	543	$	840,181	$	—	$	(369,022)	$	471,702

The accompanying notes are an integral part of these condensed consolidated financial statements.

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e.l.f. Beauty, Inc. and subsidiaries

Condensed consolidated statements of cash flows

(unaudited)

(in thousands)


	Three months ended June 30,
	2024		2023
Cash flows from operating activities:
Net income	$	47,555	$	52,977
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and non-cash lease expense	11,134		5,637

Stock-based compensation expense	12,964		7,200
Amortization of debt issuance costs and discount on debt	138		75
Deferred income taxes	5,108		2,113
Impairment of equity investment	—		1,720



Other, net	(127)		71
Changes in operating assets and liabilities:
Accounts receivable	(31,815)		(22,615)
Inventory	(8,074)		(16,729)
Prepaid expenses and other assets	(30,500)		(8,094)
Accounts payable and accrued expenses	(3,107)		2,014
Other liabilities	(1,995)		(1,015)
Net cash provided by operating activities	1,281		23,354

Cash flows from investing activities:

Purchase of property and equipment	(786)		(616)

Other, net	(93)		—
Net cash used in investing activities	(879)		(616)

Cash flows from financing activities:



Repayment of long-term debt	—		(1,250)


Cash received from issuance of common stock	464		485



Other, net	(56)		(202)
Net cash provided by (used in) financing activities	408		(967)

Effect of exchange rate changes on cash and cash equivalents	41		—

Net increase in cash and cash equivalents	851		21,771
Cash and cash equivalents - beginning of period	108,183		120,778
Cash and cash equivalents - end of period	$	109,034	$	142,549

The accompanying notes are an integral part of these condensed consolidated financial statements.

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e.l.f. Beauty, Inc. and subsidiaries

Notes to condensed consolidated financial statements (unaudited)

Note 1—Nature of operations

e.l.f. Beauty, Inc., a Delaware corporation (“e.l.f. Beauty” and together with its subsidiaries, the “Company”), is a multi-brand beauty company that offers inclusive, accessible, clean, vegan and cruelty-free cosmetics and skin care products. The Company's mission is to make the best of beauty accessible to every eye, lip, face and skin concern.

The Company believes its ability to deliver cruelty-free, clean, vegan and premium-quality products at accessible prices with broad appeal differentiates it in the beauty industry. The Company believes the combination of its value proposition, innovation engine, ability to attract and engage consumers, and its world-class team’s ability to execute with speed, has positioned the Company well to navigate the competitive beauty market.

The Company's family of brands includes e.l.f. Cosmetics, e.l.f. SKIN, Naturium, Well People and Keys Soulcare. 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, Ulta Beauty and other leading retailers that have enabled the Company to expand distribution both domestically and internationally.

Note 2—Summary of significant accounting policies

Basis of presentation

The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company, these interim financial statements contain all adjustments, including normal recurring adjustments, necessary for a fair statement of its financial position as of June 30, 2024, March 31, 2024 and June 30, 2023, and its results of operations and stockholders' equity for the three months ended June 30, 2024 and June 30, 2023 and its cash flows for the three months ended June 30, 2024 and June 30, 2023. All intercompany balances and transactions have been eliminated in consolidation.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024 (the “Annual Report”). Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Segment reporting

Operating segments are components of an enterprise for which separate financial information is available that is evaluated by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Utilizing these criteria, the Company manages its business on the basis of one operating segment and one reportable segment. It is impracticable for the Company to provide revenue by product line.

Significant accounting policies

The Company made no material changes in the application of its significant accounting policies that were disclosed in Note 2, “Summary of significant accounting policies,” to the audited consolidated financial statements as of and for the fiscal year ended March 31, 2024 included in the Annual Report.

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Business combinations

The purchase price of a business acquisition is allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the business combination date. The excess of purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill. Determining fair value of identifiable assets, particularly intangibles, and liabilities acquired also requires the Company to make estimates, which are based on all available information and in some cases assumptions with respect to the timing and amount of future revenues and expenses associated with an asset. Unanticipated events or circumstances may occur that could affect the accuracy of the Company’s fair value estimates, and under different assumptions, the resulting valuations could be materially different.

Costs that are incurred to complete the business combination, such as legal and other professional fees, are not considered as a part of consideration transferred and are charged to selling, general and administrative expense as they are incurred.

Revenue recognition

The Company distributes products both through national and international retailers, as well as direct-to-consumers through its e-commerce channel. The marketing and consumer engagement benefits that the direct-to-consumer channel provides are integral to the Company’s brand and product development strategy and drive sales across channels. As such, the Company views its two primary distribution channels as components of one integrated business, as opposed to discrete revenue streams.

The Company sells a variety of beauty products but does not consider them to be meaningfully different revenue streams given similarities in the nature of the products, the target consumer and the innovation and distribution processes.

The following table provides disaggregated revenue from contracts with customers by geographical market, as the nature, amount, timing and uncertainty of revenue and cash flows can differ between domestic and international customers (in thousands).


	Three months ended June 30,
Net sales by geographic region:		2024		2023
United States		$	271,367	$	188,595
International		53,110		27,744
Total net sales		$	324,477	$	216,339

As of June 30, 2024, other than accounts receivable, the Company had no material contract assets, contract liabilities or deferred contract costs recorded on its unaudited condensed consolidated balance sheet.

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Recent accounting pronouncements

New accounting pronouncements issued but not yet adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting – Improvements to Reportable Segment Disclosures (Topic 280). The standard expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, ASU 2023-07 enhances interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, and contains other disclosure requirements. ASU 2023-07 is effective for the Company’s annual period beginning April 1, 2024, and interim periods within fiscal years beginning April 1, 2025. Entities must adopt the changes to the segment reporting guidance on a retrospective basis. Early adoption is permitted. The Company expects ASU 2023-07 to only impact its disclosures with no impacts to the Company’s results of operations, cash flows, and financial condition.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740). The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. The new requirements apply to all entities subject to income taxes and will be effective for the Company’s annual periods beginning April 1, 2025. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively and early adoption is permitted. The Company expects ASU 2023-09 to only impact its disclosures with no impacts to the Company’s results of operations, cash flows, and financial condition.

Note 3—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 “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 acquisition (in thousands):


Cash consideration			$	275,266
Equity consideration (common stock issued)(1)			57,772
Total consideration transferred			333,038
Less: Net assets acquired
Net assets acquired, excluding liability assumed for acquisition-related seller expenses	$	174,608
Liability assumed for acquisition-related seller expenses(2)	(10,549)
Net assets acquired			(164,059)
Goodwill			$	168,979

(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 acquisition date.

(2) In connection with the Acquisition, the Company paid Naturium’s acquisition-related expenses of $10.5 million recognized as an assumed liability at the acquisition date.

The Company incurred and expensed acquisition transaction costs of $0.4 million and zero during the three months ended June 30, 2024 and June 30, 2023, respectively, which are included as a component of selling, general and administrative expenses in the condensed consolidated statements of operations.

The 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 acquisition date. The purchase price allocation, deferred tax calculations and residual goodwill are

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preliminary and pending finalization. Naturium’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 acquisition date (in thousands):


Cash	$	293
Accounts receivable	7,388
Inventory	16,236
Prepaid expenses and other current assets	1,899

Goodwill(1)	168,979
Intangible assets	162,100
Total assets acquired	356,895
Accounts payable	(15,897)
Accrued expenses and other current liabilities	(6,025)
Net deferred tax liability	(1,935)
Total liabilities assumed	(23,857)
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 this 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, their estimated useful lives and fair value methodology are as follows:


	Fair Value		Estimated Useful Life
	(in thousands)		(in years)	Fair Value Methodology
Customer relationships – retailers	$	20,000	10	Excess earnings method
Customer relationships – e-commerce	17,600		3	Excess earnings method and with and without method
Trademarks	124,500		15	Relief from Royalty method
Total identified intangible assets	$	162,100

Note 4—Goodwill and intangible assets

Information regarding the Company’s goodwill and intangible assets as of June 30, 2024 is as follows (in thousands):


	Estimated useful life	Gross carrying amount		Accumulated amortization		Net carrying amount
Customer relationships – retailers	10 years	$	97,600	$	(74,113)	$	23,487
Customer relationships – e-commerce	3 years	21,540		(8,340)		13,200
Trademarks	10 to 15 years	128,000		(7,742)		120,258
Total finite-lived intangibles		247,140		(90,195)		156,945
Trademarks	Indefinite	63,800		—		63,800
Goodwill		340,600		—		340,600
Total goodwill and other intangibles		$	651,540	$	(90,195)	$	561,345

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Information regarding the Company’s goodwill and intangible assets as of March 31, 2024 is as follows (in thousands):


	Estimated useful life	Gross carrying amount		Accumulated amortization		Net carrying amount
Customer relationships – retailers	10 years	$	97,600	$	(73,393)	$	24,207
Customer relationships – e-commerce	3 years	21,540		(6,874)		14,666
Trademarks	10 to 15 years	128,000		(5,579)		122,421
Total finite-lived intangibles		247,140		(85,846)		161,294
Trademarks	Indefinite	63,800		—		63,800
Goodwill		340,600		—		340,600
Total goodwill and other intangibles		$	651,540	$	(85,846)	$	565,694

Information regarding the Company’s goodwill and intangible assets as of June 30, 2023 is as follows (in thousands):


	Estimated useful life	Gross carrying amount		Accumulated amortization		Net carrying amount
Customer relationships – retailers	10 years	$	77,600	$	(67,720)	$	9,880
Customer relationships – e-commerce	3 years	3,940		(3,940)		—
Trademarks	10 years	3,500		(1,167)		2,333
Total finite-lived intangibles		85,040		(72,827)		12,213
Trademarks	Indefinite	63,800		—		63,800
Goodwill		171,620		—		171,620
Total goodwill and other intangibles		$	320,460	$	(72,827)	$	247,633

Amortization expenses on finite-lived intangible assets were $4.3 million and $2.0 million in the three months ended June 30, 2024 and June 30, 2023, respectively. Certain trademark assets have been classified as indefinite-lived intangible assets and accordingly, are not subject to amortization. There were no impairments of goodwill or intangible assets recorded in the three months ended June 30, 2024 and June 30, 2023.

The estimated future amortization expense related to finite-lived intangible assets, assuming no impairment as of June 30, 2024 is as follows (in thousands):



Remainder of fiscal 2025	$	13,047
2026	17,397
2027	14,463
2028	11,530
2029	11,530
Thereafter	88,978
Total	$	156,945

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Note 5—Accrued expenses and other current liabilities

Accrued expenses and other current liabilities as of June 30, 2024, March 31, 2024 and June 30, 2023 consisted of the following (in thousands):


	June 30, 2024		March 31, 2024		June 30, 2023
Accrued expenses	$	51,511	$	37,782	$	22,767
Accrued inventory	20,307		16,478		84
Accrued marketing	23,337		29,282		12,458
Current portion of operating lease liabilities	8,470		7,016		4,474
Accrued compensation	7,409		17,423		5,165
Taxes payable	3,065		5,814		3,594
Other current liabilities	2,779		3,938		2,495
Accrued expenses and other current liabilities	$	116,878	$	117,733	$	51,037

Note 6—Debt

The Company’s outstanding debt as of June 30, 2024, March 31, 2024 and June 30, 2023 consisted of the following (in thousands):


	June 30, 2024		March 31, 2024		June 30, 2023

Revolving line of credit(1)	$	89,500	$	89,500	$	—
Term loan(1)	173,375		173,375		65,000
Finance lease obligations	—		57		431
Total debt(2)	262,875		262,932		65,431
Less: debt issuance costs	(703)		(806)		(388)
Total debt, net of issuance costs	262,172		262,126		65,043
Less: current portion	(102,938)		(100,307)		(5,431)
Long-term portion of debt	$	159,234	$	161,819	$	59,612

(1) See further discussion below. As of June 30, 2024, the Company was in compliance with all applicable financial covenants under the Amended Credit Agreement (as defined below).

(2) The gross carrying amounts of the Company’s long-term debt, before reduction of the debt issuance costs, and finance lease obligations approximate their fair values, based on Level 2 inputs (quoted prices for similar assets and liabilities in active markets or inputs that are observable), as the stated rates approximate market rates for loans with similar terms. The Company did not transfer any liabilities measured at fair value on a recurring basis to or from Level 2 for any of the periods presented.

Amended Credit Agreement

On April 30, 2021, the Company amended and restated its prior credit agreement (such amended and restated credit agreement, as further amended, supplemented or modified from time to time, the “Amended Credit Agreement”) and refinanced all loans under the prior credit agreement. The Amended Credit Agreement has a five year term and consists of (i) a $100 million revolving credit facility (the “Amended Revolving Credit Facility”) and (ii) a $100 million term loan facility (the “Amended Term Loan Facility”).

Table of Contents

All amounts under the Amended Revolving Credit Facility are available for draw until the maturity date on April 30, 2026. The Amended Revolving Credit Facility is collateralized by substantially all of the Company’s assets and requires payment of an unused fee ranging from 0.10% to 0.30% (based on the Company’s consolidated total net leverage ratio (as defined in the Amended Credit Agreement)) times the average daily amount of unutilized commitments under the Amended Revolving Credit Facility. The Amended Revolving Credit Facility also provides for sub-facilities in the form of a $7 million letter of credit and a $5 million swing line loan; however, all amounts drawn under the Amended Revolving Credit Facility cannot exceed $100 million. The unused balance of the Amended Revolving Credit Facility as of June 30, 2024 was $10.5 million.

Prior to the Second Amendment (as defined below), both the Amended Revolving Credit Facility and the Amended Term Loan Facility bore interest, at the borrowers’ option, at either (i) a rate per annum equal to an adjusted LIBOR rate determined by reference to the cost of funds for the United States (“US”) dollar deposits for the applicable interest period (subject to a minimum floor of 0%) plus an applicable margin ranging from 1.25% to 2.125% based on our consolidated total net leverage ratio or (ii) a floating base rate plus an applicable margin ranging from 0.25% to 1.125% based on our consolidated total net leverage ratio. On March 29, 2023, the Company amended the Amended Credit Agreement to transition the benchmark from LIBOR to an adjusted Secured Overnight Financing Rate (“SOFR”) (which is equal to the applicable SOFR plus 0.10%) (such transaction, the “First Amendment”). In connection with the First Amendment, all outstanding LIBOR loans were converted to SOFR loans. The annual interest rate for SOFR borrowings will be equal to term SOFR plus 0.10%, subject to a floor of 0%, plus a margin ranging from

SEC Form 10-Q filed by e.l.f. Beauty Inc.