Q1 2025 EARNINGS – MAY 8, 2025 DISCLAIMER General Disclaimer This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities of Olaplex Holdings, Inc. (the "Company"), nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Forward Looking Statements This presentation includes certain forwar ...

Core Insights - Olaplex Holdings, Inc. reported revenue of $96.98 million for the quarter ended March 2025, reflecting a year-over-year decline of 2% [1] - The earnings per share (EPS) for the same period was $0.00, compared to $0.03 a year ago, indicating a significant drop [1] - The reported revenue exceeded the Zacks Consensus Estimate of $93.03 million by 4.24%, while the EPS fell short of the consensus estimate of $0.02 by 100% [1] Revenue Breakdown - Professional revenue was $34.50 million, surpassing the five-analyst average estimate of $33.48 million, but showing a year-over-year decline of 10.9% [4] - Direct-to-Consumer (DTC) revenue was $23.90 million, below the average estimate of $25.01 million, representing a year-over-year decrease of 7% [4] - Specialty retail revenue reached $38.60 million, exceeding the average estimate of $34.38 million, with a year-over-year increase of 12.2% [4] Stock Performance - Over the past month, Olaplex shares have returned +7.3%, while the Zacks S&P 500 composite has changed by +11.3% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Olaplex (OLPX) Q1 2025 Earnings Call May 08, 2025 09:00 AM ET Company Participants Allison Malkin - PartnerAmanda Baldwin - CEO & DirectorCatherine Dunleavy - COO & CFOJonna Kim - DirectorSydney Wagner - Equity Research Senior Associate - Beauty & Personal CareKate Grafstein - VP - Equity ResearchDana Telsey - CEO and Chief Research Officer Conference Call Participants Susan Anderson - Managing Director & Senior AnalystShovana Chowdhury - AnalystKorinne Wolfmeyer - Vice President & Senior Equity Research An ...

Olaplex (OLPX) Q1 2025 Earnings Call May 08, 2025 09:00 AM ET Speaker0 Greetings, and welcome to the Olaplex Holdings First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce Alison Malkin, Investor Relations. Alison, please go ahead. Speaker1 Good morning, everyone. Welcome to our first quarter fis ...

[First Quarter 2025 Financial Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20Highlights) [Performance Summary](index=1&type=section&id=Performance%20Summary) Olaplex reported a solid start to 2025, with first-quarter sales exceeding expectations, progressing on its transformation and "Bonds and Beyond" strategy - CEO Amanda Baldwin highlighted a solid start to the year, with **Q1 sales surpassing expectations** and continued progress on the company's transformation strategy[3](index=3&type=chunk) [Key Financial Results (Q1 2025 vs Q1 2024)](index=1&type=section&id=Key%20Financial%20Results%20%28Q1%202025%20vs%20Q1%202024%29) In Q1 2025, net sales decreased slightly by **1.9% to $97.0 million** year-over-year, driven by declines in Professional and Direct-To-Consumer channels, partially offset by Specialty Retail growth Q1 2025 vs Q1 2024 Financial Performance (in thousands) | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $96,978 | $98,906 | (1.9)% | | Gross Profit | $67,356 | $71,343 | (5.6)% | | Net Income | $465 | $7,746 | (94.0)% | | Adjusted EBITDA | $25,664 | $35,484 | (27.7)% | | Diluted EPS | $0.00 | $0.01 | (100.0)% | Q1 2025 Net Sales by Channel (in thousands) | Channel | Q1 2025 | % Change YoY | | :--- | :--- | :--- | | Specialty Retail | $38,600 | 12.0% | | Professional | $34,500 | (10.9)% | | Direct-To-Consumer | $23,900 | (7.2)% | - Geographically, net sales in the United States increased by **0.6%**, while international sales decreased by **4.5%** in Q1 2025[7](index=7&type=chunk) [Balance Sheet and Financial Position](index=1&type=section&id=Balance%20Sheet%20and%20Financial%20Position) As of March 31, 2025, Olaplex maintained a strong cash position with **$580.9 million** in cash and cash equivalents, and subsequently made a **$300.0 million** voluntary debt repayment Balance Sheet Highlights (in millions) | Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $580.9 | $586.0 | | Inventory | $79.2 | $75.2 | | Long-term debt, net | $642.4 | $643.7 | - On May 1, 2025, the company voluntarily repaid **$300.0 million** of its outstanding long-term debt using cash on hand, without incurring prepayment penalties[6](index=6&type=chunk) [Fiscal Year 2025 Guidance](index=3&type=section&id=Fiscal%20Year%202025%20Guidance) [Guidance Overview](index=3&type=section&id=Guidance%20Overview) The company reiterated its full-year 2025 guidance, factoring in ongoing investments in demand generation, innovation, and talent, with Q2 reflecting incremental marketing investments - The company reiterated its fiscal year 2025 guidance, which incorporates continued investments in R&D, marketing, and talent to generate demand and strengthen execution[8](index=8&type=chunk) - The guidance assumes the current consumer spending environment and no material impact from tariffs[8](index=8&type=chunk) [Guidance Metrics](index=3&type=section&id=Guidance%20Metrics) For fiscal year 2025, Olaplex projects net sales between **$410 million and $431 million**, with Adjusted Gross Profit Margin between **70.5% and 71.5%**, and Adjusted EBITDA Margin between **20% and 22%** Fiscal Year 2025 Guidance | Metric | 2025 Guidance | 2024 Actual | | :--- | :--- | :--- | | Net Sales (in millions) | $410 - $431 | $423 | | Adjusted Gross Profit Margin | 70.5% to 71.5% | 71.4% | | Adjusted EBITDA Margin | 20% to 22% | 30.7% | [Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Consolidated%20Financial%20Statements%20%28Unaudited%29) [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets stood at **$1,770,924 thousand**, total liabilities were **$892,595 thousand**, and stockholders' equity increased to **$878,329 thousand** Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $703,856 | $689,713 | | Total assets | $1,770,924 | $1,767,723 | | Total current liabilities | $65,556 | $64,654 | | Total liabilities | $892,595 | $893,321 | | Total stockholders' equity | $878,329 | $874,402 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 2025, net sales were **$97.0 million** and gross profit **$67.4 million**, with increased operating expenses leading to a significant drop in operating income to **$8.5 million** and net income to **$0.5 million** Q1 Statement of Operations Summary (in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net sales | $96,978 | $98,906 | | Gross profit | $67,356 | $71,343 | | Total operating expenses | $58,880 | $51,726 | | Operating income | $8,476 | $19,617 | | Net income | $465 | $7,746 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, net cash used in operating activities was **$2.9 million**, a reversal from Q1 2024, resulting in a net decrease in cash and cash equivalents of **$5.1 million** for the quarter Q1 Statement of Cash Flows Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(2,917) | $43,707 | | Net cash used in investing activities | $(996) | $(1,084) | | Net cash used in financing activities | $(1,161) | $(1,517) | | Net (decrease) increase in cash and cash equivalents | $(5,074) | $41,106 | [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) [Disclosure and Reconciliation](index=4&type=section&id=Disclosure%20and%20Reconciliation) The company provides non-GAAP measures like Adjusted EBITDA and Gross Profit to offer a clearer view of core operating performance, with Q1 2025 Adjusted EBITDA at **$25.7 million** and a **26.5%** margin - Management believes non-GAAP measures provide meaningful supplemental information regarding operating performance and facilitate internal comparisons by excluding certain non-indicative items[16](index=16&type=chunk) Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $465 | $7,746 | | Adjusted EBITDA | $25,664 | $35,484 | | Adjusted EBITDA margin | 26.5% | 35.9% | Reconciliation of Gross Profit to Adjusted Gross Profit (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Gross profit | $67,356 | $71,343 | | Adjusted gross profit | $69,748 | $73,530 | | Adjusted gross profit margin | 71.9% | 74.3% | Reconciliation of SG&A to Adjusted SG&A (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | SG&A | $47,987 | $40,437 | | Adjusted SG&A | $44,349 | $37,249 |

New York, NY, May 08, 2025 (GLOBE NEWSWIRE) -- Olaplex Holdings, Inc. (NASDAQ: OLPX) ("OLAPLEX" or the "Company") today announced financial results for the first quarter ended March 31, 2025. Amanda Baldwin, OLAPLEX’s Chief Executive Officer, commented: "We had a solid start to the year as the quarter marked continued progress on our transformation and our Bonds and Beyond strategy, with first quarter sales coming in ahead of our expectations. As we look ahead, we believe in our ability to navigate the dyna ...

Company Overview - Olaplex Holdings, Inc. is a foundational health and beauty company that focuses on innovative hair care solutions, particularly through its Complete Bond Technology™ [3] - Founded in 2014, Olaplex has transformed the prestige hair care market and offers a comprehensive range of hair health products sold globally through various channels [3] Upcoming Financial Results - The company plans to report its first quarter fiscal 2025 financial results on May 8, 2025, before the market opens [1] - An investor conference call and webcast will be held on the same day at 9:00am ET/6:00am PT to discuss the financial results [2] - The webcast will be accessible via the company's investor relations website, and a replay will be available for 90 days [2]

While Olaplex's (NASDAQ: OLPX ) share price has been fairly range bound over the past 12 months, the business continues to face headwinds. A new CEO and a shift in strategy may have renewed investor optimism butRichard Durant is the leader of Narweena, an asset manager focused on finding market dislocations that are the result of a poor understanding of a businesses long-term prospects. Narweena believes that excess risk adjusted returns can be achieved by identifying businesses with secular growth opportun ...

Financial Performance - Net sales for the year ended December 31, 2024, were $422.67 million, a decrease of 7.8% from $458.3 million in 2023[296]. - Gross profit for 2024 was $292.29 million, down from $318.63 million in 2023, reflecting a gross margin of approximately 69.2%[296]. - Operating income decreased to $66.94 million in 2024, compared to $108.22 million in 2023, indicating a decline of 38.2%[296]. - Net income for 2024 was $19.52 million, a significant drop of 68.3% from $61.59 million in 2023[296]. - Total current assets increased to $689.71 million in 2024 from $613.2 million in 2023, representing a growth of 12.5%[293]. - Total assets as of December 31, 2024, were $1.77 billion, slightly up from $1.74 billion in 2023[293]. - The company reported a basic net income per share of $0.03 for 2024, down from $0.09 in 2023[296]. - Selling, general, and administrative expenses rose to $181.69 million in 2024, an increase of 7.3% from $168.94 million in 2023[296]. - Net income for the year ended December 31, 2024, was $19.522 million, a decrease of 68.3% compared to $61.587 million in 2023 and a significant drop from $244.072 million in 2022[301]. - The weighted average common shares outstanding for basic net income per share increased to 661,980,612 in 2024 from 654,592,923 in 2023, while diluted shares decreased to 665,397,655 from 677,578,245[421]. Cash Flow and Liquidity - The company maintained a strong cash position with cash and cash equivalents of $585.97 million as of December 31, 2024, compared to $466.4 million in 2023[293]. - Net cash provided by operating activities for 2024 was $143.068 million, down 19.4% from $177.532 million in 2023[301]. - Cash and cash equivalents at the end of 2024 were $585.967 million, up from $466.400 million in 2023, indicating a net increase of $119.567 million[301]. - Net cash used in operating activities was $(1,466) thousand for 2024, a reversal from net cash provided of $21,888 thousand in 2023[433]. - Cash flows from financing activities resulted in a net cash provided of $1,466 thousand in 2024, contrasting with $(21,888) thousand used in 2023[433]. Debt and Interest - As of December 31, 2024, the company had $656.4 million of outstanding variable rate loans under the 2022 Term Loan Facility, with a 1% change in the effective interest rate impacting interest costs by approximately $6.6 million over the next 12 months[276]. - The 2022 Term Loan Facility has a principal amount of $675 million, with $656,438 million outstanding as of December 31, 2024[369]. - Interest expense for the years ended December 31, 2024, 2023, and 2022 was $59.6 million, $58.0 million, and $44.0 million, respectively, indicating a year-over-year increase of 2.8% from 2023 to 2024[376]. - The carrying amount of the Company's long-term debt as of December 31, 2024, was $656.4 million, with an estimated fair value of $620.3 million[377]. - The Company recognized a $3.4 million reduction in interest expense during 2024 due to interest rate cap settlements, partially offset by $1.1 million related to amortization of interest rate cap premiums[380]. Taxation - The company is subject to income taxes in the U.S. and the U.K., and changes in tax laws or regulations could materially affect operating results and financial conditions[176]. - The total provision for income taxes for the year ended December 31, 2024, was $7.39 million, compared to $15.13 million in 2023, reflecting a decrease of 51.1%[384]. - The effective tax rate for the Company for the year ended December 31, 2024, was 27.5%, compared to 19.7% in 2023[384]. - The Company expects future payments under the Tax Receivable Agreement to aggregate to $189.3 million, with payments expected to continue through 2041[346]. - The Tax Receivable Agreement liability as of December 31, 2024, was $189.3 million, with $177.5 million recorded in long-term liabilities[390]. Inventory and Sales - Inventory as of December 31, 2024, was $75.17 million, down from $95.92 million in 2023[355]. - The company recorded inventory write-offs of $7.8 million, $15.2 million, and $8.2 million for the years ended December 31, 2024, 2023, and 2022, respectively[355]. - The company recognized net sales reductions for estimated and actual returns of $6.7 million, $9.2 million, and $10.0 million for the years ended December 31, 2024, 2023, and 2022, respectively[326]. - Three customers accounted for 39% of the company's total net sales during the year ended December 31, 2024, compared to two customers representing 21% in 2023[337]. - Net sales in the United States for 2024 were $210.61 million, compared to $207.68 million in 2023 and $397.56 million in 2022[354]. Operational Risks - The company is dependent on outsourced functions, and failures by external service providers could adversely affect business operations[182]. - The company’s operations could be disrupted by natural disasters, public health crises, or political instability, particularly affecting supply chains[183]. - The company utilizes Professional Employer Organizations (PEOs) for employment functions, and failures by these entities could result in significant liabilities[186]. - The company has not engaged in hedging foreign currency transactions to date, and does not anticipate a material effect on financial statements from a 10% change in the value of the U.S. dollar against other currencies[279]. Share-Based Compensation - Share-based compensation expense increased to $11.123 million in 2024 from $9.072 million in 2023, reflecting a rise of 22.5%[301]. - The Company issued 12,496,544 time-based RSUs in 2024, with a weighted average grant-date fair value of $1.77 per share[407]. - The Company recognized a compensation expense of $1.6 million in selling, general, and administrative expenses prior to the modification date[395]. - The fair value of the SARs on the modification date was based on a share price of $17.06, with an expected volatility of 30%[396]. Legal Proceedings - The company intends to vigorously defend against pending legal proceedings, including a consolidated securities class action and derivative actions[416][417][418]. - The company has not recognized any probable or reasonably estimable losses associated with pending legal proceedings as of December 31, 2024[420].

Financial Data and Key Metrics Changes - For Q4 2024, the company reported net sales of $100.7 million, a decline of 9.8% from the same quarter last year [33] - Full-year net sales were $422.7 million, representing a decline of 7.8% from 2023, with adjusted EBITDA at $129.7 million and an adjusted EBITDA margin of 30.7% [15][32] - Adjusted gross profit margin for Q4 was 68.6%, down from 70.6% in Q4 2023, impacted by higher promotional activity and warehousing costs [38] Business Line Data and Key Metrics Changes - Specialty retail sales in Q4 increased by 5.7% to $28.8 million compared to Q4 2023, indicating a positive trend in this channel [36] - Direct-to-consumer (D2C) channel sales decreased by 2.5% year-over-year, with growth at olaplex.com offset by strategic international rationalization [37] - Professional channel sales declined by 27.1% year-over-year, reflecting the company's focus on partnering with fewer but stronger international distributors [38] Market Data and Key Metrics Changes - The company regained the number one position in earned media value among US hair care brands in December [21] - Olaplex had the number one set in US prestige hair care during the 2024 holiday season, showcasing strong brand performance [18] Company Strategy and Development Direction - The company is focused on three transformation priorities: maximizing sales and marketing impact, strengthening capabilities and culture, and developing a long-term roadmap [15][22] - The strategic vision, "Bonds and Beyond," aims to move beyond damage repair to foundational hair health, empowering professionals and creating emotional connections with consumers [49][54] - The company plans to invest aggressively in talent and marketing to support its 2025 strategic priorities, which include generating brand demand, harnessing innovation, and executing with excellence [44][59] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2024 was a year of transformation, with net sales and adjusted EBITDA below 2023 levels due to international headwinds [13] - The company remains optimistic about international growth opportunities and is focused on rationalizing its distributor partnerships [90][94] - For 2025, the company expects net sales to range from a decline of 3% to an increase of 2% compared to 2024, with a focus on improving brand demand and innovation [45][46] Other Important Information - The company ended the year with a strong balance sheet, increasing cash and cash equivalents to $586 million from $466.4 million at the end of fiscal 2023 [42] - Inventory declined by 20.7% to $75.2 million, reflecting improved operational discipline [42] Q&A Session Summary Question: Insights on the professional channel and competition - Management emphasized the importance of the professional channel as both a revenue source and marketing vehicle, noting the need for product support and community building to stabilize this channel [78][81] Question: International business and distributor rationalization - Management is optimistic about international opportunities and is focused on partnering with fewer, stronger distributors to enhance execution [90][92] Question: Fiscal 2025 outlook and product readiness - Management believes that product innovation and effective marketing will drive growth, with a focus on execution and data-driven decision-making [100][105] Question: Marketing investments and customer acquisition - Management stated that brand building takes time and emphasized the importance of a balanced marketing approach to create long-term demand [111][116] Question: Trends in the professional channel and consumer behavior - Management noted that the time between salon visits has stabilized post-COVID, and emphasized the need for additional services to drive consumers back to salons [122] Question: Pricing strategy and customer reactions - Management discussed the thoughtful approach to pricing, balancing innovation with maintaining gross margins, and indicated positive customer reactions to the new pricing strategy [134]