Hailey Bieber’s skincare brand Rhode is proving to be one of the biggest success stories in the beauty industry, and its performance is already impacting the financials of e.l.f. Beauty. In its latest earnings report, the company revealed a $57.6 million fair value adjustment tied to Rhode’s acquisition, signaling that the brand is exceeding expectations and moving closer to unlocking additional payout milestones.
The adjustment relates to an earnout clause included in e.l.f.’s 2025 acquisition of Rhode, a deal valued at up to $1 billion. While the headline number may seem like a routine accounting update, it reflects a significant development. Rhode’s strong revenue performance is increasing the likelihood that e.l.f. will pay out a substantial portion of the remaining earnout tied to the deal.
What the $57.6 Million Adjustment Actually Means
In corporate terms, a “fair value adjustment” can sound technical, but the meaning is straightforward. According to e.l.f.’s earnings disclosure, the company revised its expectations for the earnout portion of the Rhode acquisition because the brand is outperforming its original projections.
The report states that the adjustment was
“driven by the outperformance of rhode’s revenue results relative to the earnout thresholds”
. In simpler terms, Rhode is growing fast enough that e.l.f. now expects to pay more of the promised bonus tied to its acquisition.
This earnout structure included up to $200 million in additional payments, contingent on Rhode hitting specific growth targets over several years. The new $57.6 million adjustment suggests that a significant portion of those targets is already within reach.
How the Rhode Acquisition Was Structured
The original acquisition deal between e.l.f. Beauty and Rhode was split into two parts. The upfront payment totaled $800 million, including $600 million in cash and $200 million in e.l.f. stock. On top of that, the agreement included up to $200 million in earnout payments based on future performance.
This type of structure is common in high-growth acquisitions, especially when a brand has strong momentum but limited long-term track record. By tying part of the purchase price to performance, companies can reduce risk while still rewarding success.
For Rhode, the strategy appears to be working. The brand’s rapid growth has pushed it closer to achieving those milestones sooner than expected, increasing the likelihood of additional payouts.
Hailey Bieber’s Role in Rhode’s Growth
Rhode was launched by Hailey Bieber in 2022 with a focused product lineup and a clear brand identity. Unlike many celebrity-backed ventures, the company emphasized simplicity, affordability, and consistency, quickly gaining traction with consumers.
The brand’s success has been closely tied to Bieber’s personal influence and marketing approach. Her “glazed donut skin” aesthetic became a viral trend on social media, helping drive demand and build a loyal customer base.
Within a few years, Rhode evolved from a direct-to-consumer startup into a major player in the beauty industry. Its rapid rise made it an attractive acquisition target, culminating in the billion-dollar deal with e.l.f. Beauty.
What This Means for Hailey Bieber’s Earnings
While the $57.6 million adjustment does not translate directly into personal income, it provides insight into the scale of Rhode’s success. Industry estimates suggest that Bieber retained a significant ownership stake in the brand prior to its acquisition.
Based on typical ownership ranges, her share of the upfront payment alone likely reached hundreds of millions of dollars. If Rhode continues to hit its earnout targets, her total earnings from the deal could increase substantially.
The current adjustment indicates that those additional payouts are becoming more likely, reinforcing the financial impact of Rhode’s performance.
A Standout Example in Celebrity Entrepreneurship
Rhode’s success stands out in a crowded market of celebrity-founded brands. While many such ventures rely heavily on name recognition, Rhode has demonstrated sustained growth driven by product demand and brand positioning.
The $57.6 million earnout adjustment serves as a measurable indicator of that success. It shows that the brand is not only generating attention but also delivering strong financial results.
For e.l.f. Beauty, the acquisition appears to be paying off as Rhode continues to expand its reach and influence. For Hailey Bieber, it solidifies her position as a serious entrepreneur in the beauty industry.
