ODD — Oddity Tech Ltd.

ODDITY Q3 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Revenue: $148 million, a 24% year-over-year increase, exceeding guidance of 21%-23%.
• Adjusted EBITDA: $29 million, surpassing guidance of $26 million to $28 million.
• Adjusted Diluted EPS: $0.40, compared to guidance of $0.33 to $0.36.
• Gross Margin: 71.6%, up 170 basis points year-over-year, exceeding guidance of 68%.
• Free Cash Flow: $90 million for the first nine months of 2025.
• Cash Position: $793 million in cash and equivalents, with an additional $200 million available from undrawn credit facilities.

2. Strategic Updates and Business Highlights

• Brand Launch: Official launch of METHODIQ, ODDITY's third brand, aimed at transforming dermatological care through a telehealth platform. Initial focus on acne, hyperpigmentation, and eczema with a portfolio of 28 products.
• International Expansion: International revenue grew 40% year-over-year, with a focus on scaling in existing markets (U.K., Australia) and testing in new ones (France, Italy, Spain).
• IL MAKIAGE: Continued double-digit growth, on track to reach $1 billion in revenue by 2028.
• SpoiledChild: Expected to surpass $225 million in revenue for 2025.
• ODDITY LABS: Significant improvements in systems and infrastructure, with plans to launch 8 new products in 2026.

3. Forward Guidance and Outlook

• Full-Year 2025 Guidance:
  • Net revenue expected between $806 million and $809 million (24%-25% growth).
  • Gross margin projected at approximately 72.5%.
  • Adjusted EBITDA forecasted between $161 million and $163 million.
  • Adjusted diluted EPS expected between $2.10 and $2.12.
• Q4 Revenue Growth: Anticipated to increase between 21% and 23% year-over-year.

4. Bad News, Challenges, or Points of Concern

• Acquisition Costs: Higher acquisition costs noted, though offset by strong repeat customer rates.
• Market Conditions: General softness in the U.S. consumer market observed, although ODDITY's performance remains strong.
• Tariff Impacts: Some gross margin pressure from higher tariffs, though manageable.
• International Revenue: While international growth is strong, it still represents only 17% of total revenue, indicating reliance on U.S. markets.

5. Notable Q&A Insights

• International Growth: Growth primarily driven by existing markets rather than new ones, with 83% of revenue still from the U.S.
• METHODIQ Customer Acquisition: Initial revenue expected to come from existing customers of IL MAKIAGE and SpoiledChild, with plans to expand the user base over time.
• Marketing Strategy: The launch of METHODIQ includes significant offline marketing efforts, including a major TikTok campaign expected to run through Q1 2026.
• Future Product Offerings: METHODIQ will primarily focus on nonprescription products, with some prescription offerings that may initially have lower margins.
• Long-Term Growth: Management remains confident in sustaining a 20% revenue growth rate and 20% adjusted EBITDA margin moving forward.

This summary encapsulates ODDITY's strong financial performance in Q3 2025, strategic initiatives including the launch of METHODIQ, and the outlook for continued growth despite some challenges in the broader market.