E.l.f. Beauty delivered a strong third-quarter performance on Wednesday, far surpassing Wall Street expectations and prompting the company to lift its full-year financial outlook.

The announcement initially sent E.l.f.’s shares surging by as much as 15% in after-hours trading, although most of those gains later faded.

For the third fiscal quarter, the company reported adjusted earnings of $1.24 per share, significantly higher than the 72 cents analysts had anticipated. Revenue also came in above forecasts, reaching $490 million compared with the expected $460 million, according to LSEG estimates.

E.l.f. said its net sales climbed 38% year over year to $489.5 million, up from $355 million in the same period last year. On a per-share basis, earnings rose from 74 cents to $1.24. Management attributed the growth to stronger performance across international markets, expanded retail partnerships, and robust e-commerce momentum. Adjusted net income increased to $74.5 million, compared with $43 million a year earlier.

A key contributor to the quarter’s results was the company’s recent acquisition of Rhode, the skincare brand founded by celebrity Hailey Bieber. The roughly $1 billion deal added $128 million to E.l.f.’s third-quarter net sales. The company now expects Rhode to generate as much as $265 million in net sales this fiscal year, an upward revision of $65 million from its prior estimate.

In light of its performance, E.l.f. raised its full-year revenue guidance by $42 million to $50 million, signaling continued confidence in its growth trajectory.

Chief Executive Officer Tarang Amin highlighted the company’s momentum in a statement, noting that E.l.f. Cosmetics gained 130 basis points in market share during the quarter. He also pointed to the successful launch of the Rhode brand in Sephora stores across the U.K. as a major milestone. Amin emphasized that the company’s competitive pricing, product innovation, and creative marketing strategies remain central to its sustained expansion.