rhode, by the numbers

they're performing too well

Hey fam and welcome back to dumb rich. Soooooo yeah Knicks in five!?! How about it. I’m going to be beyond disappointed when this wears off but that’s okay. I can always just jump from one hyperfixation to the next. No worries!!!

Let’s get into everyone’s hyperfixation these days: Hailey Beiber’s brand, Rhode.

Obviously every summer is hot girl summer, but every summer for the past few years has also been Rhode girl summer. We are women possessed. Why am I setting alarms to place an order for a bronzer? Literally my 30-something year old friends and I are teenagers. It’s nuts. People are lining up at their pop-ups and actually suffering third degree sunburns to get their hands on product that is sold online and a screen printed sweatshirt.

Are we brainwashed?

These are texts between two highly functioning adults who own businesses, employ people, have interns, and pay taxes. We have access to dozens of other bronzers, but we apparently, we need this one.

Okay, you get it. We’re all falling victim to this incredible marketing. Honestly though, I think the products are great. So, how much of our hard-earned cash is Rhode taking home? And are they actually profitable? Let’s deep dive.

literally me never letting go.

First, we know Hailey Beiber famously sold Rhode to E.l.f. Beauty for an easy $1 billion in May 2025. Nice. The deal was structured as approx $600 million in cash, $300 million in stock and $100 million in earnouts if certain sales goals are met.

Rhode was previously privately owned, but E.l.f. is a publicly traded company. This means they’re required to provide us with financial statements and reports on the company’s performance.

The main report is the Annual 10-K. But it’s dense. It’s basically gossip wearing a blazer. Maybe even a full pantsuit. It includes key risk factors, executive obsessions, who they’re scared of, how much they owe, what keeps them up at night, etc. It’s all in there, written in the driest possible voice and smallest print precisely because the contents are so spicy.

Let’s break out E.l.f.’s most recent 10-K report, which is the first one to fully account for the Rhode acquisition.

the headline - rhode is performing too well and it’s costing e.l.f. more money lol
The main bummer here is that E.l.f. is not required to report Rhode’s earnings separately, so we need to do further digging. As a whole, E.l.f. reported a $49 million net loss. Actually shocking. A company that now owns the brand that has a chokehold on us for an overpriced lip gloss (how expensive can this be to make??) is losing money?!?!

I mentioned that Rhode would receive additional payments if it hit certain targets. In accounting language, this is called "contingent consideration." In normal person language, it's a bonus. Rhode far exceeded those targets. The $7.1 million E.l.f. was expecting to pay to Rhode ended up being off by $57.6 million… oops.

Without having to pay out this $64.7 million, they would’ve been at a nearly $20 million profit. So all good, except Rhode is performing TOO well.

can we put a price on hailey beiber?
This is my favorite genre of 10-K content. The part where a multi-billion-dollar public company has to soberly admit what it’s afraid of.

In the risk factors, E.l.f. flatly states that Rhode’s performance is substantially dependent on key personnel. Specifically Hailey Bieber. The filing notes she’s essential to the brand and prominently involved in its marketing, and that if she were to leave, it could negatively impact the business.

Think about how wild that is. A company worth billions formally telling its investors, in a federal document, “a lot of this rides on one specific person, and if she walks, we have a problem.” Is there insurance on this? I neeeeed to know. Will continue to dig.

how much is rhode actually selling?
As discussed, E.l.f. doesn’t break Rhode out as its own little reportable universe (annoying, but legal), so we squint at the breadcrumbs management leaves around the filing. The breadcrumbs are large. Rhode contributed about $293.5 million to E.l.f.’s net sales for the fiscal year. (Management had originally hinted to roughly $265 million. Of course, Rhode beat that too. Sensing a theme?)

For scale: e.l.f.’s entire company did about $1.64 billion in net sales for the year, up 25%. Rhode is bringing in nearly 20% of that revenue. Not bad for a brand whose entire marketing strategy appears to be making us want lip products attached to phone cases.

what do they think rhode is worth?
When you buy a brand for a billion dollars, the cash leaves your bank account, but the value of the acquired business shows up on the balance sheet as an asset. It helps lessen the blow. It gets reported into two categories:

• Goodwill jumped to about $853 million (from $341 million). Goodwill is the accounting word for “the premium we paid over the tangible stuff,” aka the vibes. A lot of that is Rhode vibes.

• Intangible assets jumped to about $553 million (from $208 million). These are things like the trademark and customer relationships, or the brand.

Translation: E.l.f. paid up enormously for something you cannot hold in your hand, which is the entire thesis of a celebrity beauty line. They bought the name, the audience, and the cultural gravity.

how did e.l.f. pay for this? daddy’s credit card?
e.l.f. took on $600 million in new long-term debt to fund the deal, pushing total debt from about $257 million to roughly $842 million. This information has made it significantly easier for me to justify future impulse purchases.

other fun facts we learned about e.l.f. outside of rhode:

• The $7 price point is the whole strategy. E.l.f. Cosmetics’ average US product is about $7, versus ~$10 for other mass brands and ~$30 for prestige. The business model is dupes, done shamelessly and well.

• The entire empire runs on 849 people. That’s it. Billion-dollar acquisitions, global distribution, five brands, and whatever dark magic is required to convince me I need another lip treatment.

• Everyone gets stock. E.l.f. says it's one of the few public consumer companies that grants equity to every full-time employee, every year. A nice flex, and a retention strategy.

• The board is 60% female. Genuinely rare for a public company, and worth noting in an industry that sells almost entirely to women.

Overall, I am happy Rhode found it’s home a E.l.f. That said, I've heard whispers that some of the products have gotten smaller. TBH, I've had the same cream blush for two years, so it's probably for the best. Rhode is seriously crushing it for them, Hailey Beiber stays winning, and I remain just a nosy bitch. Chat soon xoxoxoxo.