e.l.f. Beauty, Inc. (NYSE:ELF)

Current Income Tax Expense

The current income tax expense has shown a consistent upward trend over the five-year period. Starting from $3,742 thousand in March 2020, it increased to $6,042 thousand in 2021 and continued rising each year, reaching $16,603 thousand by March 2024. This growth indicates increasing taxable income or changes in taxable rates impacting the company's current tax obligations.

Deferred Income Tax Expense

The deferred income tax expense exhibits greater volatility. It began at a positive $2,443 thousand in March 2020, shifted to significant negative values in subsequent years (-$8,584 thousand in 2021, -$3,701 thousand in 2022, and -$6,401 thousand in 2023), before partially recovering to -$3,276 thousand in 2024. The negative figures represent deferred tax benefits or reductions in deferred tax liabilities, which suggest fluctuations due to timing differences between accounting income and taxable income or changes in tax rates and policies affecting deferred tax calculations.

Provision (Benefit) for Income Taxes

This item reflects the combined effect of current and deferred components. The total provision decreased sharply from $6,185 thousand in 2020 to a benefit of -$2,542 thousand in 2021, indicating an overall reduction in tax expense, largely influenced by the negative deferred tax component that year. In 2022 and 2023, the provision returned to positive territory with values of $3,661 thousand and $2,544 thousand, respectively, showing fluctuating tax costs. By 2024, the provision increased substantially to $13,327 thousand, driven largely by the significant increase in current tax expense, despite the continuing deferred tax benefit.

Summary of Trends and Insights

The analysis reveals that while current tax expenses have steadily increased, deferred tax expenses have been negative for most of the period after 2020, acting as a counterbalance that sometimes reduced total tax expense. The large swings in deferred taxes suggest considerable variability in timing differences or tax rate assumptions affecting deferred liabilities or assets. The substantial increase in total tax provision in 2024 is primarily due to the significant rise in current tax expense, which eclipses the mitigating effect of deferred tax benefits. This pattern points to evolving tax dynamics, possibly from changes in profitability, tax regulations, or accounting estimates related to temporary differences.

The analysis of the tax-related financial data over the five-year period reveals several significant fluctuations and trends that reflect changes in tax expense components and their impact on the overall effective tax rate.

Federal statutory tax rate

The federal statutory tax rate remains constant at 21% throughout the entire period, indicating no changes in federal tax legislation affecting the statutory rate during these years.

State tax, net of federal benefit

This item shows notable volatility. It starts at 3.7% in 2020, plummets sharply to -10.6% in 2021, then rebounds to positive values of 2.6% in 2022, followed by smaller positive contributions of 1% and 1.8% in 2023 and 2024, respectively. The large negative value in 2021 suggests a significant tax benefit or adjustment for state taxes during that year.

State tax deferred rate change, net of federal benefit

The values fluctuate around zero, with minor negative rates of -1.6% in 2021 and -0.1% in 2022, then no reported values in subsequent years. This suggests limited impact from deferred state tax rate changes over the period.

Nondeductible business expenses

Generally low and stable, this component ranges modestly between 0.4% and 2.1% across the years, indicating a relatively small but consistent effect on the tax rate.

Nondeductible employee compensation

This expense shows a marked increase particularly in 2021 with a peak of 9.1%, then decreases to 1.1% in 2022 before rising again in 2023 (2.5%) and 2024 (4.3%). The spike in 2021 suggests an unusual event or adjustment impacting deductible employee compensation costs that year.

Provision-to-return adjustment

Starting with a positive adjustment of 1.5% in 2021, this item turns slightly negative in the following years (-0.3% in 2022, -0.1% in 2023, and -0.2% in 2024), indicating downward adjustments to provisions relative to returns filed in recent years.

Uncertain tax positions

This factor fluctuates narrowly, with a negative value in 2020 (-0.2%), an increase to 1% in 2021, and a marginal positive figure of 0.1% in 2022 before no data is reported for subsequent years. The overall impact appears limited but variable.

Stock based compensation

Shows large negative percentages across all years, particularly extreme in 2021 at -90.7%, with lesser negative impacts in other years (-12% in 2022, -20.3% in 2023, and -18.4% in 2024). The exceptionally high negative figure in 2021 suggests a substantial tax benefit or adjustment related to stock-based compensation during that period.

Change in valuation allowance

Sporadically reported, with a 1.5% increase in 2022, a decline of -0.6% in 2023, and a minor positive of 0.4% in 2024. This reflects adjustments to deferred tax asset realizability that have an inconsistent but occasionally impactful influence on the effective tax rate.

Others

Remains close to zero with slight positive and negative movements, indicating minimal impact.

Effective tax rate

The effective tax rate exhibits significant volatility. It starts at 25.7% in 2020, plunges dramatically to -68.9% in 2021, then rebounds to a modest 14.4% in 2022 and continues to decline to 4% in 2023 before rising slightly to 9.5% in 2024. The large negative rate in 2021 corresponds with major negative contributions from state tax and stock-based compensation, indicating extraordinary tax benefits or adjustments that year.

Overall, the data indicates a relatively stable statutory federal rate contrasted by considerable fluctuations in the components affecting the effective tax rate. Noteworthy are the large negative impacts from stock-based compensation and state tax adjustments in 2021, which heavily influenced the effective tax performance. Subsequent years show a normalization trend with lower effective tax rates but still demonstrating variability across components such as nondeductible employee compensation and valuation allowance changes.

The financial data over the five-year period presents several notable trends and shifts across various balance sheet and income statement items.

Compensation

There is a consistent and substantial decrease in compensation expenses from $760,000 in 2020 to $222,000 in 2024, suggesting a significant reduction in payroll or related costs over the period.

Inventory and Receivables

This category exhibits a steady upward trend, increasing from $3.47 million in 2020 to $13.47 million in 2024. This growth may indicate expanding operations, higher sales volume, or accumulation of stock and outstanding payments.

Accrued Expenses

Accrued expenses show a gradual increase from roughly $2 million in 2020 to $3.78 million in 2024, reflecting rising liabilities related to expenses incurred but not yet paid.

Stock Compensation

Stock compensation more than doubled from approximately $3.7 million in 2020 to a peak of $8.25 million in 2023, falling slightly to $7.35 million in 2024. This pattern suggests an increasing use of equity-based remuneration, peaking in 2023.

Net Operating Losses

Net operating losses have shown significant growth, increasing from $92,000 in 2020 to $1.19 million in 2024. This increasing loss may reflect operational challenges or significant investments producing deferred profitability.

Right of Use Liability

The right of use liability rose sharply from $3.44 million in 2020 to $5.73 million in 2021, then decreased to $3.78 million in 2023 before increasing again to $5.03 million in 2024. The fluctuations suggest changes in lease obligations or reassessments of lease terms over time.

Capitalized Research and Development

Capitalized R&D started reporting from 2023, growing from $858,000 in 2023 to $2.05 million in 2024, indicating increased investments in internally developed products or technology.

Other (Assets)

Assets classified as 'Other' increased notably from $558,000 in 2020 to $1.79 million in 2024, suggesting growth in miscellaneous assets not captured elsewhere.

Gross Deferred Tax Assets

These assets grew substantially over the period, from $14 million to nearly $35 million, indicating increasing temporary differences and tax loss carryforwards that have the potential to reduce future tax liabilities.

Valuation Allowance

Valuation allowance showed a negative amount only in 2022 and 2024 (-$370,000 and -$744,000), implying occasional adjustments in the estimation of realizability of deferred tax assets.

Net Deferred Tax Assets

Net deferred tax assets increased from $14 million in 2020 to $34.1 million in 2024, supporting the notion of growing tax benefits expected to be realized in the future.

Goodwill

Goodwill values were negative throughout the period, fluctuating between -$3.5 million and -$5.2 million, possibly indicating impairments or adjustments reflective of acquisition accounting or asset write-downs.

Fixed Assets and Internally Developed Software

This item remained negative and variable, starting at -$3.29 million in 2020 and declining further to -$5.75 million in 2024, suggesting continued capital expenditures with possible impairment or amortization effects.

Intangible Assets

Intangible assets were negative and fluctuated between -$19.1 million and -$25.3 million, trending upward in some years but showing an overall decline by 2024, pointing to amortization or impairments of intangible resources.

Right of Use Asset

Similar to the liability counterpart, right of use assets showed negative values fluctuating between -$3.3 million and -$5 million. The pattern suggests adjustments corresponding to the lease liabilities over time.

Other (Liabilities)

Other liabilities remained consistently negative but relatively modest in size, moving between -$378,000 and -$563,000.

Deferred Tax Liabilities

Deferred tax liabilities were substantial and negative across all years, with figures around -$30 million to -$36 million. The level of these liabilities appears relatively stable but declined slightly by 2023 before edging up again in 2024.

Net Deferred Tax Assets (Liabilities)

This figure shifted negatively over the period from -$21.9 million in 2020 to -$1.85 million in 2024, suggesting a reduction in net deferred tax liabilities versus assets. The trend towards a less negative position may indicate improved tax positions or changes in asset recognition.

The financial data indicates substantial changes in deferred tax assets and liabilities over the five-year period ending March 31, 2024.

Deferred Tax Assets

The deferred tax assets demonstrate variability throughout the years. Starting at $15,175 thousand in 2020, the value is not reported for 2021 but appears as a lower amount of $563 thousand in 2022. Subsequently, there is a significant increase to $1,821 thousand by 2024. The trend suggests an initial absence or non-recognition in 2021, followed by gradual growth in deferred tax assets in the last two years measured.

Deferred Tax Liabilities

The deferred tax liabilities show a clear consistent downward trend from $21,892 thousand in 2020 to $3,666 thousand in 2024. This continuous reduction over five years indicates a decreasing obligation related to deferred taxes, with a notable steep decline especially between 2020 and 2023, after which the decline slows but continues into 2024.

Overall, the data reflects a shifting balance between deferred tax assets and liabilities. While deferred tax liabilities have steadily decreased, deferred tax assets have experienced fluctuations but ultimately increased in the latest year reported. This pattern could imply changes in the company's taxable temporary differences or utilization of tax credits, resulting in reduced liabilities and a gradual recovery or reassessment of deferred tax assets over time.

The financial data reflects significant developments in the company’s asset base, liabilities, equity, and profitability over the five-year period ending March 31, 2024. The analysis considers both reported and adjusted figures, which incorporate annual reported and deferred income tax adjustments.

Total Assets

Reported total assets exhibited a consistent upward trajectory across the period, increasing from US$453.1 million in 2020 to approximately US$1.13 billion in 2024, representing more than a twofold growth. Adjusted total assets follow a nearly identical pattern, signifying minimal impact from income tax adjustments on asset valuation. The pronounced increase, especially between 2023 and 2024, suggests significant asset acquisitions or revaluations during the most recent year.

Total Liabilities

Reported total liabilities fluctuated, initially rising slightly from US$210.9 million in 2020 to US$217.7 million in 2021, then decreasing markedly to US$182.2 million in 2022, followed by a modest rise through 2023 and a substantial increase to US$486.7 million in 2024. Adjusted total liabilities demonstrate a similar pattern but consistently record lower values each year, indicating that deferred tax adjustments reduce the recognized liabilities. The sharp rise in liabilities in the latest year points to either increased borrowing or accrued obligations.

Stockholders’ Equity

Both reported and adjusted stockholders’ equity show steady increases over time, with reported equity growing from US$242.2 million in 2020 to US$642.6 million in 2024. Adjusted equity figures are consistently higher than reported ones, reflecting the positive effect of deferred tax adjustments on equity value. The equity growth trend reflects retained earnings accumulation, capital injections, or valuation increases, reinforcing a stronger capital base especially notable after 2022.

Net Income

Reported net income exhibited variability, starting at US$17.9 million in 2020, sharply decreasing to US$6.2 million in 2021, followed by recovery and significant growth to US$127.7 million in 2024. Adjusted net income presents a different pattern with a loss in 2021 (-US$2.4 million), reflecting tax adjustments' impact, and generally lower income levels in the earlier years compared to reported figures. However, it also shows strong improvement in later years, culminating in US$124.4 million in 2024. This suggests that while tax adjustments led to temporary earnings reduction or loss recognition, operational profitability resumed strongly.

Overall Observations

The data reveal substantial growth in total assets and equity, supported by a more modest but increasing liability base. The sharp growth in 2024 across assets, liabilities, equity, and net income signals notable operational expansion or transaction activities during that year. Deferred tax impacts appear to slightly lower liabilities and net income, while positively affecting equity adjustments. The fluctuations in net income, particularly the adjusted negative net income in 2021, highlight the sensitivity of reported earnings to tax-related timing differences. The company’s financial position strengthened significantly over the period, marked by doubled assets and nearly tripled equity, indicating enhanced financial stability and growth potential.

The analysis of the financial indicators over the observed periods reveals distinct trends in profitability, asset utilization, and leverage.

Net Profit Margin

The reported net profit margin shows an overall upward trend from 6.32% in 2020 to 12.47% in 2024, with a notable dip in 2021 to 1.96% followed by recovery and growth in subsequent years. The adjusted net profit margin, which accounts for annual reported and deferred income tax adjustments, follows a similar pattern but reflects greater volatility, particularly turning negative in 2021 at -0.74%. This suggests that tax-related adjustments had a significant impact on profitability during that year. From 2022 onward, adjusted margins improve steadily, reaching 12.15% in 2024, closely paralleling the reported margin.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios exhibit consistent improvement from 0.62 in 2020 to a peak of 0.97 in 2023 before a slight decrease to 0.91 in 2024. This indicates an enhancement in the efficiency of asset utilization over time, implying better sales generation per unit of assets employed. The identical values for reported and adjusted ratios suggest that tax adjustments did not significantly affect this metric.

Financial Leverage

Financial leverage trends display a general decline from 1.87 in 2020 to a low of 1.44 in 2023, followed by an increase to 1.76 in 2024 in reported figures. Adjusted leverage ratios align closely with the reported data, showing a similar pattern. The initial decrease suggests a reduction in reliance on debt financing or improved equity base during the middle years, while the increase in 2024 may indicate a strategic shift towards greater leverage.

Return on Equity (ROE)

The reported ROE exhibits a substantial increase from 7.38% in 2020 to 19.87% in 2024, with a significant dip in 2021 to 2.31%. The adjusted ROE behaves similarly but shows a negative return of -0.83% in 2021, underscoring the impact of tax adjustments on equity returns during that year. From 2022 onwards, both measures display robust growth, reflecting improved profitability and efficient use of shareholder capital.

Return on Assets (ROA)

Reported ROA increased steadily from 3.95% in 2020 to 11.31% in 2024, with a modest decline in 2021 to 1.28%. Adjusted ROA mirrors this trend but shows a negative value of -0.48% in 2021, indicating that tax adjustments adversely affected asset returns that year. The upward trend from 2022 onward suggests enhanced operational efficiency and profitability relative to asset base.

Overall, the data reveal a recovery and strengthening of profitability and efficiency ratios after a challenging 2021. The alignment of reported and adjusted metrics in most years, except 2021, highlights the noteworthy influence of income tax adjustments on financial performance indicators during that period. The improvement in asset turnover and ROE signifies effective management of resources and equity, while fluctuations in financial leverage point to strategic adjustments in capital structure over time.

The financial data indicates a fluctuating but ultimately positive trajectory in net income and profitability margins over the five-year period.

Reported Net Income (US$ in thousands)

The reported net income exhibits an initial decline from 17,884 in 2020 to 6,232 in 2021, followed by a recovery and consistent growth reaching 127,663 in 2024. This reflects a substantial increase in profitability after the 2021 low point.

Adjusted Net Income (US$ in thousands)

Adjusted net income displays more volatility, with a decrease into negative territory at -2,352 in 2021, indicating possible significant adjustments or one-time charges during that period. However, subsequent years show a recovery, peaking at 124,387 in 2024, closely aligning with the reported net income trend but slightly lower in magnitude.

Reported Net Profit Margin (%)

The reported net profit margin follows a similar pattern to net income, declining from 6.32% in 2020 to 1.96% in 2021 before improving steadily to 12.47% in 2024. This suggests enhanced operational efficiency and profitability margins over time.

Adjusted Net Profit Margin (%)

The adjusted net profit margin experiences a pronounced dip into negative territory at -0.74% in 2021, indicating adjustments had a material negative effect on profitability that year. Post-2021, it trends upward, reaching 12.15% in 2024, closely mirroring the reported margin, which emphasizes recovery and sustained improvement in earnings quality.

Overall, the data portrays a period of financial difficulty in 2021 as evidenced by decreased reported and adjusted earnings and margins, followed by a significant recovery and growth phase through 2024, indicating improved financial performance and profitability.

The data reveals notable trends in the financial profile over the five-year period ending March 31, 2024. Total assets, both reported and adjusted, display a steady increase from 2020 through 2023, followed by a marked acceleration growth in the final year. Specifically, total assets rise from approximately 453 million USD in 2020 to nearly 596 million USD in 2023, then nearly double to about 1.13 billion USD in 2024. This sharp increase in the last year may indicate significant asset acquisitions or revaluations.

In parallel, the total asset turnover ratio demonstrates consistent improvement over the period, starting at 0.62 in 2020 and reaching a peak of 0.97 in 2023. This upward trend suggests increasingly efficient use of assets in generating revenue. However, in the final year, there is a slight decline to 0.91, which, though still relatively high, could reflect the impact of the substantial increase in assets outpacing revenue growth or a shift in the asset base composition.

Total Assets

Show consistent growth from 2020 to 2023, with an approximately 31% increase over three years.

Experience a sharp increase of nearly 90% between 2023 and 2024.

Adjusted total assets closely mirror reported values, indicating minimal impact from adjustments.

Total Asset Turnover

Increase steadily from 0.62 in 2020 to 0.97 in 2023, demonstrating improved asset utilization.

Decline slightly to 0.91 in 2024, suggesting a modest reduction in efficiency coinciding with large asset growth.

Adjusted ratios match reported ratios exactly, reflecting stable measurement post-tax adjustments.

Overall, the company shows strong asset growth combined with generally improving asset productivity over the period, with an exception in the final year that may warrant further investigation to understand the underlying causes of the divergence between asset base expansion and turnover efficiency.

The financial data reveals several notable trends across the most recent five-year period. Both reported and adjusted total assets have shown a consistent upward trajectory, with a significant increase observed in the final year. Specifically, total assets rose from just over 453 million US dollars in early 2020 to nearly 1.13 billion by early 2024, indicating substantial asset growth and expansion over this period.

Stockholders’ equity, both reported and adjusted, also demonstrated a steady upward trend, reflecting strengthening equity positions. Reported equity increased from approximately 242 million to over 642 million US dollars, while adjusted equity rose from approximately 264 million to over 644 million US dollars. This growth in equity suggests effective capital retention and possibly additional equity financing or strong earnings retention contributing to equity accumulation.

Regarding financial leverage, both reported and adjusted ratios decreased from 2020 through 2023, indicating a gradual reduction in the use of debt relative to equity during these years. The reported financial leverage ratio moved from 1.87 down to 1.45 before rising again in 2024 to 1.76. A similar pattern is evident for adjusted leverage, which decreased from 1.72 to 1.44 before climbing to 1.75 in 2024. This recent uptick may suggest a renewed reliance on debt financing or shifts in the balance sheet composition in the latest fiscal year.

Overall, the data portrays a company with strong asset and equity base growth alongside a cautious reduction in leverage through most of the period, followed by a partial reversal of that deleveraging trend in the most recent year. The adjustments for income tax effects appear to have minimal impact on the overall trends, as adjusted figures closely follow the reported values, indicating consistent underlying financial performance.

The financial data exhibits notable fluctuations and overall growth trends over the examined periods.

Net Income Trends

Reported net income shows considerable variability, beginning at 17,884 thousand USD in 2020, declining sharply to 6,232 thousand USD in 2021, then recovering to 21,770 thousand USD in 2022. This is followed by a strong increase in 2023 to 61,530 thousand USD, and a significant surge to 127,663 thousand USD in 2024. Adjusted net income follows a similar pattern but with greater volatility, including a negative value of -2,352 thousand USD in 2021 before increasing to 18,069 thousand USD in 2022 and subsequently rising to 55,129 thousand USD in 2023 and 124,387 thousand USD in 2024.

Stockholders’ Equity Trends

Reported stockholders’ equity grows steadily each year, starting at 242,171 thousand USD in 2020 and increasing to 269,646 thousand USD in 2021, then further to 312,429 thousand USD in 2022. The upward trend accelerates with 411,017 thousand USD in 2023 and reaches 642,572 thousand USD in 2024. Adjusted stockholders’ equity mirrors this progression with slightly higher values, beginning at 264,048 thousand USD in 2020 and culminating at 644,417 thousand USD in 2024.

Return on Equity (ROE) Analysis

Reported ROE demonstrates fluctuating returns, declining from 7.38% in 2020 to 2.31% in 2021, then rising to 6.97% in 2022. Thereafter, it exhibits a strong improvement, rising to 14.97% in 2023 and reaching 19.87% in 2024. Adjusted ROE reflects a more pronounced variability, with a negative return of -0.83% in 2021, indicating a period of loss or temporarily diminished profitability. It recovers to 5.61% in 2022 and increases to 13.31% in 2023, advancing further to 19.3% in 2024.

Overall, the financial data indicates a period of initial volatility around 2021, impacting income and profitability metrics, followed by sustained recovery and strong growth through 2023 and 2024. The upward trends in stockholders’ equity and ROE in the final years suggest improving financial health and profitability. The close alignment of reported and adjusted figures in later years enhances confidence in the quality of earnings and returns as adjustments become less impactful.

The analysis of the annual reported and deferred income tax adjusted financial data reveals several notable trends across the selected periods.

Net income

The reported net income demonstrates considerable volatility over the years, starting at 17,884 thousand USD in 2020, experiencing a significant decline in 2021 to 6,232 thousand USD, then recovering sharply in subsequent years to reach 127,663 thousand USD by 2024. Adjusted net income follows a similar trajectory but exhibits more pronounced variability, including a negative figure of -2,352 thousand USD in 2021 before rising substantially to 124,387 thousand USD in 2024. This indicates the impact of deferred income tax adjustments on net income, which smooths out some fluctuations but also highlights periods of financial strain.

Total assets

Both reported and adjusted total assets show a steady upward trend throughout the analyzed periods. Reported total assets increase from 453,104 thousand USD in 2020 to 1,129,247 thousand USD in 2024, more than doubling over five years. Adjusted total assets closely mirror the reported figures, suggesting minimal distortions due to income tax adjustments regarding asset valuation. This growing asset base may reflect expansion or acquisition activities, contributing to the company's enhanced capacity.

Return on Assets (ROA)

Reported ROA ranges from a low of 1.28% in 2021 to a peak of 11.31% in 2024. Similarly, adjusted ROA turns negative in 2021 at -0.48%, then improves steadily, reaching 11.03% by 2024. The negative adjusted ROA in 2021 aligns with the adjusted net income loss that year, indicating that deferred tax adjustments impact profitability measures. The substantial improvement in ROA in recent years suggests enhanced operational efficiency and profitability relative to the asset base.

Overall, the data shows that after a challenging year in 2021 marked by reduced income and negative adjusted profitability, the company has demonstrated strong recovery and growth through to 2024. The consistent increase in total assets supports the capacity for higher earnings, while improving ROA figures reflect better asset utilization amid the fiscal adjustments. These patterns indicate strengthening financial performance over the analyzed period.