How ELF (e.l.f. Beauty) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a beauty and personal care company like ELF Income Statement Overview makes money is essential for investors and anyone interested in the business of cosmetics and skincare. In this post, we break down ELF's quarterly income statement (Q4 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick ELF Overview

ELF Income Statement Overview operates as a leading beauty and personal care brand, specializing in affordable, high-quality cosmetics and skincare products. Revenue comes primarily from the sale of makeup, skincare, and beauty accessories through both retail partners and direct-to-consumer channels. The company focuses on digital-first marketing and leverages influencer partnerships to drive brand awareness and sales. Its business segments include mass retail distribution, e-commerce, and international expansion.

Revenue Breakdown

• Total Revenue (Q4 2025): $343.9M (+14.2% YoY)
  • Segment breakdown not disclosed in latest filing
  • Growth is powered by strong e-commerce sales, expanded retail partnerships, and new product launches.

Gross Profit and Margins

• Gross Profit: $238.9M (69.4% gross margin)
  • Cost of Revenue: $105.1M (+20.8% YoY)
  • ELF maintains robust margins due to its scalable digital business model, efficient supply chain, and focus on affordable product innovation.
• Most costs come from product manufacturing, packaging, and logistics.

Operating Income and Expenses

• Operating Income: $7.7M (-72.4% YoY, 2.2% margin)
• Operating Expenses: $231.1M (+24.2% YoY)
  • R&D: Not separately disclosed for Q4 2025
  • SG&A: $231.1M (+24.2% YoY, 67.2% of revenue) — includes marketing, sales, administrative, and brand-building investments.
  • ELF continues to invest heavily in marketing and brand expansion while maintaining operational efficiency.

Net Income

• Pre-Tax Income: $4.0M (flat YoY, 1.2% margin)
• Income Tax: Not disclosed for Q4 2025
• Net Income: $3.0M (-84.2% YoY, 0.9% net margin)
• ELF converts a modest portion of sales into profit due to aggressive investment in growth and marketing.

What Drives ELF's Money Machine?

• Mass-market cosmetics sales: Overwhelmingly the main revenue driver, accounting for the bulk of total revenue.
• Digital engagement metrics: ELF’s social media reach and influencer partnerships drive high brand awareness and conversion rates.
• Brand-building investment: Strategic spending on marketing and SG&A to expand market share and launch new products.
• International and e-commerce growth: Key future growth areas, though not yet major profit contributors.

Visualizing ELF's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially SG&A) taking the largest chunk.
• Even after significant marketing and brand investments, only 0.9% of revenue drops to the bottom line.

Key Takeaways

• ELF's money comes overwhelmingly from mass-market cosmetics and skincare sales
• High gross margins illustrate the power of ELF's digital-first, scalable business model
• Heavy investment in marketing and SG&A, balanced by operational efficiency
• Ongoing growth is driven by e-commerce expansion, retail partnerships, and new product launches

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FAQ About ELF's Income Statement

1. What is the main source of ELF's revenue in 2025?

ELF generates over 90% of its revenue from mass-market cosmetics and skincare sales. Additional revenue comes from accessories and international markets, though these are smaller contributors.

2. How profitable is ELF in Q4 2025?

ELF reported net income of $3.0M in Q4 2025, with a net margin of approximately 0.9%, reflecting modest profitability driven by high gross margins but offset by heavy operating expenses.

3. What are the largest expense categories for ELF?

The biggest expenses on ELF's income statement are operating expenses, particularly Sales, General & Administrative (SG&A) costs, which reached $231.1M in Q4 2025 (67.2% of revenue), as ELF prioritizes marketing, brand-building, and expansion.

4. Why does the SG&A segment operate at a loss?

SG&A, despite being essential for driving $343.9M in revenue, posted an operating loss due to aggressive investment in marketing, digital engagement, and international expansion, which ELF believes will drive long-term growth—even if the division is unprofitable today.

5. How does ELF's effective tax rate compare to previous years?

ELF's effective tax rate in Q4 2025 was not disclosed, making direct comparison to previous years unavailable. Historically, ELF’s tax rate has been moderate, often influenced by share-based compensation and international structuring.