e.l.f. Beauty, Inc.ELF
e.l.f. Beauty, Inc. Stock Compensation Disclosure
Stock based compensation
Stock plans
The Company grants stock based awards under its 2016 Equity Incentive Award Plan (as amended) (the “2016 Plan”), which replaced its 2014 Equity Incentive Plan (the “2014 Plan”) and became effective immediately prior to the effectiveness of the Company’s registration statement on Form S-1 in September 2016. No grants have been made under the 2014 Plan since the Company’s initial public offering and no further awards will be granted thereunder. Any awards outstanding under the 2014 Plan that are forfeited or lapse unexercised will be added to the shares reserved and available for grant under the 2016 Plan. The 2016 Plan permits the grant of incentive stock options, non-statutory stock options, restricted stock and other stock- or cash-based awards to employees, officers, directors, advisors and consultants. The 2016 Plan allows for option grants of the Company’s common stock based on service, performance and market conditions.
During the fiscal year ended March 31, 2025, no stock options were issued. As of March 31, 2025, a total of 18,825,528 shares have been authorized for issuance under the 2016 Plan, and 9,171,859 remain available for grant. As of March 31, 2025, there were 40,569 options and awards outstanding under the 2014 Plan that, if forfeited, would increase the number of shares authorized for grant under the 2016 Plan.
Service-based vesting stock options
The following table summarizes the activity for options that vest solely based upon the satisfaction of a service condition as follows:
| Options outstanding | Weighted-average exercise price | Weighted-average remaining contractual life (in years) | Aggregate intrinsic values (in thousands) (1) | ||||||||||||||||||||
| Balance as of March 31, 2022 | 1,543,499 | $ | 15.05 | ||||||||||||||||||||
| Exercised | (519,009) | 12.82 | |||||||||||||||||||||
| Balance as of March 31, 2023 | 1,024,490 | $ | 16.17 | 4.1 | $ | 67,796 | |||||||||||||||||
| Exercised | (347,590) | 14.47 | |||||||||||||||||||||
| Canceled or forfeited | (2,900) | 26.84 | |||||||||||||||||||||
| Balance as of March 31, 2024 | 674,000 | $ | 17.01 | 3.3 | $ | 120,660 | |||||||||||||||||
| Exercised | (68,334) | 13.95 | |||||||||||||||||||||
| Balance as of March 31, 2025 | 605,666 | $ | 17.35 | 2.3 | $ | 27,519 | |||||||||||||||||
| Exercisable, March 31, 2025 | 593,666 | $ | 17.39 | 2.3 | $ | 26,951 | |||||||||||||||||
(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the Company's closing stock price of $62.79, as reported on the New York Stock Exchange on March 31, 2025.
Additional information relating to service-based options is as follows (in thousands):
Fiscal year ended March 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Stock based compensation expense | $ | 74 | $ | 147 | $ | 344 | |||||||||||
| Intrinsic value of options exercised | 9,314 | 45,542 | 18,015 | ||||||||||||||
As of March 31, 2025, there was $37 thousand of total unrecognized compensation cost related to service-based stock options, which is expected to be recognized over the remaining weighted-average vesting period of 0.5 years.
No service-based stock options were granted during the fiscal years ended March 31, 2025, March 31, 2024 and March 31, 2023.
The determination of the fair value of stock options on the date of grant using a Black-Scholes option-pricing model is affected by the fair value of the underlying common stock, as well as assumptions regarding a number of variables that are complex, subjective and generally require significant judgment. The assumptions used in the Black-Scholes option-pricing model to calculate the fair value of stock options were:
Fair value of common stock
The fair value of shares of common stock underlying stock options is based on the closing stock price as quoted on the New York Stock Exchange on the date of grant.
Expected term
The expected term of the options represents the period of time that the options are expected to be outstanding. Options granted have a maximum contractual life of 10 years. Prior to the Company’s initial public offering of its common stock in September 2016, the Company estimated the expected term of the option based on the estimated timing of potential liquidity events. For grants upon or after the initial public offering, the Company estimated the expected term based upon the simplified method described in Staff Accounting Bulletin No. 107, as the Company did not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its equity shares had been publicly traded.
Expected volatility
As the Company did not have sufficient trading history for its common stock, the expected stock price volatility for the common stock was estimated by taking the average historic price volatility for industry peers based on daily price observations over a period equivalent to the expected term of the stock option grants. Industry peers consist of several public companies within the same industry, which are of similar size, complexity and stage of development. The Company intends to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of its own share price becomes available, or unless circumstances change such that the identified companies are no longer similar to the Company, in which case, more suitable companies whose share prices are publicly available would be used in the calculation.
Risk-free interest rate
The risk-free interest rate was based on the US Treasury rate, with maturities similar to the expected term of the options.
Expected dividend yield
The Company does not anticipate paying any dividends in the foreseeable future. As such, the Company uses an expected dividend yield of zero.
Performance-based and market-based vesting stock options
The following table summarizes the activity for options that vest based upon the satisfaction of performance or market conditions as follows:
| Options outstanding | Weighted-average exercise price | Weighted-average remaining contractual life (in years) | Aggregate intrinsic values (in thousands) (1) | ||||||||||||||||||||
| Balance as of March 31, 2022 | 1,004,327 | $ | 9.40 | ||||||||||||||||||||
| Exercised | (460,787) | 2.73 | |||||||||||||||||||||
| Canceled or forfeited | (25,800) | 26.84 | |||||||||||||||||||||
| Balance as of March 31, 2023 | 517,740 | $ | 14.46 | 2.4 | $ | 35,151 | |||||||||||||||||
| Exercised | (256,440) | 1.84 | |||||||||||||||||||||
| Balance as of March 31, 2024 | 261,300 | $ | 26.84 | 2.9 | $ | 44,209 | |||||||||||||||||
| Exercised | — | — | |||||||||||||||||||||
| Balance as of March 31, 2025 | 261,300 | $ | 26.84 | 1.9 | $ | 9,394 | |||||||||||||||||
| Exercisable, March 31, 2025 | 261,300 | $ | 26.84 | 1.9 | $ | 9,394 | |||||||||||||||||
(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the Company's closing stock price of $62.79, as reported on the New York Stock Exchange on March 31, 2025.
As of March 31, 2025, there was no further unrecognized compensation cost related to performance-based and market-based vesting stock options.
Additional information relating to options that vest based upon the satisfaction of performance or market conditions is as follows (in thousands):
Fiscal year ended March 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Intrinsic value of options exercised | $ | — | $ | 27,718 | $ | 23,860 | |||||||||||
Restricted stock awards and restricted stock units
The following table summarizes the activities for restricted stock awards (“RSAs”) and restricted stock units (“RSUs”), including performance-based RSUs, as follows:
| Shares of restricted stock outstanding | Weighted-average grant date fair value | ||||||||||
| Balance as of March 31, 2022 | 2,275,742 | $ | 20.85 | ||||||||
| Granted | 1,180,167 | 28.59 | |||||||||
| Vested | (1,066,516) | 18.88 | |||||||||
| Canceled or forfeited | (260,620) | 22.24 | |||||||||
| Balance as of March 31, 2023 | 2,128,773 | $ | 25.94 | ||||||||
| Granted | 526,280 | 111.41 | |||||||||
| Vested | (649,592) | 24.57 | |||||||||
| Canceled or forfeited | (62,594) | 51.75 | |||||||||
| Balance as of March 31, 2024 | 1,942,867 | $ | 48.67 | ||||||||
| Granted | 642,615 | 130.34 | |||||||||
| Vested | (963,266) | 39.17 | |||||||||
| Canceled or forfeited | (68,494) | 102.03 | |||||||||
| Balance as of March 31, 2025 | 1,553,722 | $ | 85.98 | ||||||||
The Company has historically granted both service based and performance-based RSUs to its executive officers. Service based RSUs vest over time based on continued employment of the participant. The performance-based RSUs vest based upon the achievement of certain performance goals and continued employment of the participant through the determination date of the achievement of the respective performance goals. Service based RSU awards are also granted annually to every Company employee, and vest over time based on continued employment of the participant.
As of March 31, 2025, there were no unvested shares subject to RSAs outstanding. Additional information relating to RSAs and RSUs (including performance-based RSUs), is as follows (in thousands):
Fiscal year ended March 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Stock based compensation expense: | |||||||||||||||||
| Cost of sales | $ | 54 | $ | 16 | $ | 112 | |||||||||||
| Selling, general and administrative expense | 71,732 | 40,462 | 28,661 | ||||||||||||||
| Total | $ | 71,786 | $ | 40,478 | $ | 28,773 | |||||||||||
| Intrinsic value of restricted stock released | $ | 170,037 | $ | 73,124 | $ | 47,713 | |||||||||||
As of March 31, 2025, there was $86.2 million of total unrecognized compensation cost related to unvested RSAs and RSUs (including performance-based RSUs), which is expected to be recognized over the remaining weighted-average vesting period of 1.8 years.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | May 29, 2025 | Showing above |
| 2017 | Mar 1, 2018 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.