Core Insights - Olaplex Holdings, Inc. has appointed Pamela Edwards and Jerome Griffith to its Board of Directors, effective March 20, 2025, and July 20, 2025, respectively [1][4] Group 1: Board Member Profiles - Pamela Edwards has extensive experience as a financial leader, having served as CFO for several large specialty retailers, including Citi Trends, Inc., L Brands Inc., and Victoria's Secret [2][6] - Jerome Griffith brings decades of experience in leading high-growth multinational companies, having held CEO positions at Brown Jordan, Lands' End, and Tumi [3][8] Group 2: Strategic Goals and Vision - The addition of Edwards and Griffith is aimed at providing strategic oversight and financial guidance to drive the long-term success of Olaplex [4] - The CEO of Olaplex expressed excitement about the new board members, highlighting the company's focus on innovation and growth in the health and beauty sector [5] Group 3: Company Background - Olaplex, founded in 2014, is known for its innovative Complete Bond Technology™, which has revolutionized prestige hair care [9] - The company has recently launched new products, including the No.0.5 Scalp Longevity Treatment and PRO SCALP Rebalancing Concentrate, as part of its refreshed identity and commitment to professional stylists [5]

Core Insights - Moretus Research provides high-quality equity research focused on U.S. public markets, aiming to deliver clarity, conviction, and alpha for serious investors [1] - The research methodology emphasizes a structured framework to identify companies with durable business models and mispriced cash flow potential, prioritizing simplicity and relevance in valuation [1] - The coverage targets underappreciated companies experiencing structural changes or temporary dislocations, where disciplined analysis can yield asymmetric returns [1] Research Methodology - Moretus Research employs rigorous fundamental analysis combined with a judgment-driven process, avoiding noise and overly complex forecasting [1] - Valuation is based on sector-relevant multiples tailored to each company's business model and capital structure, focusing on comparability and simplicity [1] - The research aims to raise the standard for independent investment research by providing actionable insights and a strong filter for essential factors in equity analysis [1]

General Information [Form 10-Q Filing Details](index=1&type=section&id=Form%2010-Q%20Filing%20Details) Olaplex Holdings, Inc. filed its 10-Q for the quarter ended March 31, 2025, indicating compliance with SEC filing requirements and its status as an accelerated filer, with its common stock trading on the Nasdaq Global Select Market under the symbol OLPX - Olaplex Holdings, Inc. filed its Quarterly Report on Form 10-Q for the period ended March 31, 2025[2](index=2&type=chunk) - The company's common stock, par value **$0.001 per share**, trades on the Nasdaq Global Select Market under the symbol OLPX[3](index=3&type=chunk) Filing Metrics | Metric | Value | | :--- | :--- | | Filer Status | Accelerated Filer | | Common Stock Outstanding (as of May 2, 2025) | 665,922,884 shares | [Table of Contents](index=2&type=section&id=Table%20of%20Contents) The table of contents outlines the structured organization of the Form 10-Q, detailing Part I (Financial Information) which includes condensed consolidated financial statements and management's discussion and analysis, and Part II (Other Information) covering legal proceedings, risk factors, and exhibits [Glossary](index=3&type=section&id=Glossary) This section provides definitions for key terms used throughout the Quarterly Report, such as '2022 Credit Agreement,' 'IPO,' 'Penelope,' 'Pre-IPO Stockholders,' 'Pre-IPO Tax Assets,' 'Reorganization Transactions,' and 'Tax Receivable Agreement,' to ensure clarity and consistent understanding - The '2022 Credit Agreement' includes a **$675 million** seven-year senior-secured term loan facility and a **$150 million** five-year senior-secured revolving credit facility[9](index=9&type=chunk) - The 'Tax Receivable Agreement' requires the Company to pay Pre-IPO Stockholders **85%** of the cash savings in U.S. federal, state, or local tax realized following the IPO[9](index=9&type=chunk) [Special Note Regarding Forward-Looking Statements](index=4&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This section advises readers that the report contains forward-looking statements based on management's beliefs and assumptions, which involve known and unknown risks and uncertainties that could cause actual results to differ materially, highlighting various factors that could impact future performance - Forward-looking statements reflect current expectations and projections about future events and financial trends, but are not guarantees of future performance[12](index=12&type=chunk) - Key risks include dependence on the business transformation plan, competition in the beauty industry, ability to maintain brand image, respond to market trends, manage supply chain, and impacts from international operations and legal proceedings[13](index=13&type=chunk)[15](index=15&type=chunk) - Many factors are macroeconomic in nature and beyond the company's control, and actual results may vary materially from projections[14](index=14&type=chunk) Part I. FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) This section presents Olaplex Holdings, Inc.'s unaudited condensed consolidated financial statements, including the balance sheets, statements of operations and comprehensive income, statements of changes in stockholders' equity, and statements of cash flows, along with their accompanying notes, for the quarter ended March 31, 2025, and comparative periods [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Summary | Metric | March 31, 2025 (in $ thousands) | December 31, 2024 (in $ thousands) | | :-------------------------------- | :------------------------------ | :------------------------------- | | Total Assets | $1,770,924 | $1,767,723 | | Total Liabilities | $892,595 | $893,321 | | Total Stockholders' Equity | $878,329 | $874,402 | | Cash and cash equivalents | $580,893 | $585,967 | | Inventory | $79,181 | $75,165 | | Long-term debt | $642,384 | $643,712 | [Condensed Consolidated Statements of Operations and Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Statements of Operations Summary | Metric | Three Months Ended March 31, 2025 (in $ thousands) | Three Months Ended March 31, 2024 (in $ thousands) | YoY Change (in $ thousands) | YoY Change (%) | | :------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :------------------------ | :------------- | | Net sales | $96,978 | $98,906 | $(1,928) | (1.9)% | | Cost of sales | $29,622 | $27,563 | $2,059 | 7.5% | | Gross profit | $67,356 | $71,343 | $(3,987) | (5.6)% | | Operating income | $8,476 | $19,617 | $(11,141) | (56.8)% | | Net income | $465 | $7,746 | $(7,281) | (94.0)% | | Basic Net income per share | $0.00 | $0.01 | $(0.01) | (100.0)% | | Diluted Net income per share | $0.00 | $0.01 | $(0.01) | (100.0)% | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Stockholders' Equity Changes | Metric | March 31, 2025 (in $ thousands) | December 31, 2024 (in $ thousands) | | :------------------------------------------------- | :------------------------------ | :------------------------------- | | Total Stockholders' Equity (End of Period) | $878,329 | $874,402 | | Net income | $465 | $7,746 | | Issuance of shares upon exercise of stock options and vesting of restricted stock units | 1,485,913 shares | 551,742 shares | | Share-based compensation expense | $2,918 | $3,183 | | Unrealized gain (loss) on derivatives, net of tax | $17 | $(361) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary | Metric | Three Months Ended March 31, 2025 (in $ thousands) | Three Months Ended March 31, 2024 (in $ thousands) | | :------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | 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** | | Cash and cash equivalents - end of period | $580,893 | $507,506 | - Cash paid for income taxes was **$615 thousand** in Q1 2025, significantly down from **$4,998 thousand** in Q1 2024[24](index=24&type=chunk) - Cash paid for interest was **$13,135 thousand** in Q1 2025, down from **$14,990 thousand** in Q1 2024[24](index=24&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION](index=9&type=section&id=NOTE%201%20%E2%80%93%20NATURE%20OF%20OPERATIONS%20AND%20BASIS%20OF%20PRESENTATION) This note describes Olaplex Holdings, Inc.'s operations as a health and beauty company focused on innovation inspired by professional hairstylists, and confirms the unaudited interim financial statements adhere to U.S. GAAP and SEC rules - Olaplex Holdings, Inc. operates indirectly through Olaplex, Inc., a foundational health and beauty company focused on breakthrough innovation inspired by professional hairstylists[25](index=25&type=chunk) - The accompanying unaudited, interim Condensed Consolidated Financial Statements are prepared in conformity with U.S. GAAP and SEC rules[26](index=26&type=chunk) [NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=10&type=section&id=NOTE%202%20%E2%80%93%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note details the significant accounting policies, including management estimates for revenue recognition, contingencies, fair value measurements, and the Tax Receivable Agreement, which impacts future payments to Pre-IPO Stockholders - Financial statements require management estimates for revenue recognition, loss contingencies, fair value of share-based options, goodwill/intangible assets, and tax expenses[27](index=27&type=chunk) - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (observable quoted prices for similar assets/liabilities), and Level 3 (unobservable inputs)[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - The Tax Receivable Agreement requires the Company to pay Pre-IPO Stockholders **85%** of the federal, state, or local tax cash savings realized from amortization of intangible assets and capitalized transaction costs existing prior to the IPO[33](index=33&type=chunk) - Future payments under the Tax Receivable Agreement could aggregate to **$189.3 million**, with payments expected to continue through 2041[34](index=34&type=chunk) [NOTE 3 – NET SALES](index=11&type=section&id=NOTE%203%20%E2%80%93%20NET%20SALES) This note provides a breakdown of net sales by channel and geography, highlighting a slight overall decrease in net sales for the three months ended March 31, 2025 Net Sales by Channel | Net Sales by Channel (in $ thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | $ Change (in $ thousands) | % Change | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :------------------------ | :------- | | Professional | $34,538 | $38,746 | $(4,208) | (10.9)% | | Specialty retail | $38,553 | $34,432 | $4,121 | 12.0% | | DTC | $23,887 | $25,728 | $(1,841) | (7.2)% | | **Total net sales** | **$96,978** | **$98,906** | **$(1,928)** | **(1.9)%** | Net Sales by Geography | Net Sales by Geography (in $ thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :---------------------------------- | :-------------------------------- | :-------------------------------- | | United States | $49,161 | $48,845 | | International | $47,817 | $50,061 | | **Total net sales** | **$96,978** | **$98,906** | - No international country exceeded **10%** of total net sales for the three months ended March 31, 2025 and 2024[39](index=39&type=chunk) [NOTE 4 – INVENTORY](index=12&type=section&id=NOTE%204%20%E2%80%93%20INVENTORY) This note details the composition of inventory, including raw materials and finished goods, and reports on the allowance for excess and obsolete inventory and related write-offs Inventory Composition | Inventory (in $ thousands) | March 31, 2025 | December 31, 2024 | | :----------------------- | :------------- | :---------------- | | Raw materials | $21,709 | $20,440 | | Finished goods | $57,472 | $54,725 | | **Total Inventory** | **$79,181** | **$75,165** | - Allowance for excess and obsolete inventory was **$15.9 million** as of March 31, 2025, compared to **$15.7 million** as of December 31, 2024[40](index=40&type=chunk) - Inventory write-offs for product obsolescence were **$1.1 million** for the three months ended March 31, 2025, up from **$0.9 million** for the same period in 2024[40](index=40&type=chunk) [NOTE 5 – FAIR VALUE MEASUREMENT](index=12&type=section&id=NOTE%205%20%E2%80%93%20FAIR%20VALUE%20MEASUREMENT) This note describes the Company's fair value measurements, including details on the 2024 Interest Rate Cap and the classification of financial assets within the fair value hierarchy - The Company entered into a 2024 Interest Rate Cap on May 7, 2024, with a notional amount of **$400.0 million** (amortizing to **$200.0 million** on July 31, 2025) at a strike rate of **5.00%**, expiring July 31, 2026[43](index=43&type=chunk) - The 2024 Interest Rate Cap is classified as **Level 2** in the fair value hierarchy, with its fair value determined using a modification of the Black's model[44](index=44&type=chunk) Fair Value of Assets | Asset (in $ thousands) | March 31, 2025 (Total) | December 31, 2024 (Total) | | :------------------- | :--------------------- | :------------------------ | | 2024 Interest Rate Cap | $48 | $217 | | U.S. Treasury | $64,740 | $64,742 | | Money market funds | $276,565 | $277,901 | [NOTE 6 – GOODWILL AND INTANGIBLE ASSETS](index=13&type=section&id=NOTE%206%20%E2%80%93%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) This note provides a breakdown of the Company's goodwill and intangible assets, including brand name, product formulations, and customer relationships, along with their respective net carrying amounts and amortization expenses Intangible Assets and Goodwill | Intangible Assets (in $ thousands) | March 31, 2025 (Net Carrying Amount) | December 31, 2024 (Net Carrying Amount) | | :------------------------------- | :----------------------------------- | :------------------------------------ | | Brand name | $752,925 | $762,444 | | Product formulations | $89,044 | $91,318 | | Customer relationships | $39,146 | $39,809 | | Software | $5,719 | $5,978 | | **Total finite-lived intangibles** | **$886,834** | **$899,549** | | Goodwill | $168,300 | $168,300 | Amortization Expense | Amortization Expense (in $ thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :---------------------------------- | :-------------------------------- | :-------------------------------- | | Patented formulations | $2,392 | $2,187 | | Brand name and customer relationships | $10,182 | $10,182 | | Software | $711 | $1,107 | | **Total amortization expense of other intangible assets** | **$10,893** | **$11,289** | [NOTE 7 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES](index=14&type=section&id=NOTE%207%20%E2%80%93%20ACCRUED%20EXPENSES%20AND%20OTHER%20CURRENT%20LIABILITIES) This note details the components of accrued expenses and other current liabilities, including sales tax, professional fees, payroll, and advertising, showing a decrease in total liabilities Accrued Expenses and Current Liabilities | Accrued Expenses (in $ thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------ | :------------- | :---------------- | | Sales tax payable | $1,277 | $6,273 | | Accrued professional fees | $5,004 | $3,649 | | Payroll liabilities | $4,156 | $6,405 | | Accrued freight | $1,915 | $2,541 | | Accrued advertising | $4,627 | $5,267 | | Deferred revenue | $839 | $877 | | Income tax payable | $0 | $1,447 | | Accrued promotional allowance | $1,506 | $5,381 | | Other accrued expenses and current liabilities | $3,306 | $3,799 | | **Total accrued expenses and other current liabilities** | **$22,630** | **$35,639** | [NOTE 8 – LONG-TERM DEBT](index=15&type=section&id=NOTE%208%20%E2%80%93%20LONG-TERM%20DEBT) This note outlines the Company's long-term debt, primarily from the 2022 Term Loan Facility, including outstanding amounts, interest rates, and a significant voluntary principal repayment made post-period end Long-Term Debt Details | Long-Term Debt (in $ thousands) | March 31, 2025 | December 31, 2024 | | :---------------------------- | :------------- | :---------------- | | 2022 Term Loan Facility | $654,750 | $656,438 | | Debt issuance costs | $(5,616) | $(5,976) | | Current portion | $(6,750) | $(6,750) | | **Long-term debt, net** | **$642,384** | **$643,712** | - The interest rate on outstanding debt under the 2022 Term Loan Facility was **7.9%** per annum as of March 31, 2025[51](index=51&type=chunk) - On May 1, 2025, the Company voluntarily repaid **$300.0 million** of outstanding principal on the 2022 Term Loan Facility using available cash on hand, without prepayment penalties[54](index=54&type=chunk) - Interest expense for the three months ended March 31, 2025, was **$13.7 million**, compared to **$14.5 million** for the same period in 2024[52](index=52&type=chunk) [NOTE 9 – INCOME TAXES](index=16&type=section&id=NOTE%209%20%E2%80%93%20INCOME%20TAXES) This note explains the Company's effective tax rate, which significantly increased to 47.2% in Q1 2025 due to discrete tax expenses and lower book income - The Company's effective tax rate was **47.2%** for the three months ended March 31, 2025, significantly higher than **25.3%** for the same period in 2024[59](index=59&type=chunk) - The higher effective tax rate in Q1 2025 was primarily due to discrete tax expenses for changes in prior year estimates, write-off of deferred tax assets, and forfeitures of non-qualified stock options and restricted stock units, exacerbated by lower book income[60](index=60&type=chunk) [NOTE 10 – EQUITY](index=16&type=section&id=NOTE%2010%20%E2%80%93%20EQUITY) This note details the issuance of common stock during the three months ended March 31, 2025 and 2024, resulting from the exercise of stock options and vesting of restricted stock units - During the three months ended March 31, 2025, the Company issued **1,485,913 shares** of common stock (**692,681** from stock options, **793,232** from RSU vesting)[62](index=62&type=chunk) - During the three months ended March 31, 2024, the Company issued **551,742 shares** of common stock (**225,566** from stock options, **326,176** from RSU vesting)[62](index=62&type=chunk) [NOTE 11 – RELATED PARTY TRANSACTIONS](index=17&type=section&id=NOTE%2011%20%E2%80%93%20RELATED%20PARTY%20TRANSACTIONS) This note discloses related party transactions, specifically payments to Pacvue Corporation for digital media services and the absence of payments under the Tax Receivable Agreement - Payments to Pacvue Corporation (affiliated with Advent International, a majority stockholder) were de minimis in Q1 2025, down from **$0.2 million** in Q1 2024, for digital media services[63](index=63&type=chunk) - No payments were made pursuant to the Tax Receivable Agreement during either the three months ended March 31, 2025, or 2024[64](index=64&type=chunk) [NOTE 12 – COMMITMENTS AND CONTINGENCIES](index=17&type=section&id=NOTE%2012%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines ongoing legal proceedings, including a securities class action and derivative actions, and states that potential losses are not probable or reasonably estimable at this time - A putative securities class action (Lilien v. Olaplex Holdings, Inc. et al.) is ongoing, with the court denying the Company's motion to dismiss and setting a trial for October 2025[67](index=67&type=chunk) - Two purported derivative actions (Ciuf o v. Dagousset, et al. and Hutchinson v. Advent International Corporation, et al.) are stayed pending resolution of the Lilien action[68](index=68&type=chunk)[69](index=69&type=chunk) - A product liability complaint (Albahae, et al. v. Olaplex Holdings, Inc., et al.) was dismissed, and the remaining plaintiff voluntarily dismissed claims without prejudice; no re-filing as of the report date[70](index=70&type=chunk) - Any potential loss associated with these pending legal proceedings is not probable or reasonably estimable at this time[71](index=71&type=chunk) [NOTE 13 – NET INCOME PER SHARE](index=18&type=section&id=NOTE%2013%20%E2%80%93%20NET%20INCOME%20PER%20SHARE) This note presents basic and diluted net income per share, along with the weighted average common shares outstanding and details on anti-dilutive shares excluded from calculations Net Income Per Share Data | Net Income Per Share | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------- | :-------------------------------- | :-------------------------------- | | Basic EPS | $0.00 | $0.01 | | Diluted EPS | $0.00 | $0.01 | | Weighted average common shares outstanding – basic | 664,685,462 | 660,821,930 | | Dilutive common equivalent shares | 1,775,252 | 2,743,361 | Anti-dilutive Shares Excluded | Anti-dilutive Shares Excluded | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :---------------------------- | :-------------------------------- | :-------------------------------- | | Stock options | 8,891,906 | 8,455,797 | | RSUs | 10,964,556 | 5,943,682 | | SARs | 39,555 | 234,990 | [NOTE 14 – SEGMENT REPORTING](index=19&type=section&id=NOTE%2014%20%E2%80%93%20SEGMENT%20REPORTING) This note clarifies that the Company operates as a single reportable segment, with performance assessed by the CEO based on net income across three sales channels - The Company operates as a single reportable segment, managing its business based on three sales channels: professional, specialty retail, and direct-to-consumer (DTC)[74](index=74&type=chunk) - The Chief Executive Officer, as the chief operating decision maker (CODM), assesses the Company's performance based on net income[75](index=75&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Olaplex's financial condition and results of operations for the three months ended March 31, 2025, discussing company overview, strategic priorities, business environment, detailed financial performance, liquidity, and critical accounting estimates [Company Overview](index=20&type=section&id=Company%20Overview) Olaplex is a foundational health and beauty company known for its patent-protected bond-building technology, operating through a synergistic omnichannel model - Olaplex is a foundational health and beauty company powered by breakthrough innovation, starting with and inspired by professional hairstylists[79](index=79&type=chunk) - The company revolutionized haircare in 2014 with its patent-protected bond-building technology, Bis-aminopropyl diglycol dimaleate, expanding to **25 products**[80](index=80&type=chunk)[81](index=81&type=chunk) - Olaplex employs a synergistic omnichannel model, leveraging professional, specialty retail, and direct-to-consumer (DTC) channels[82](index=82&type=chunk) [Our Strategy](index=20&type=section&id=Our%20Strategy) Olaplex's 2025 strategic priorities focus on generating brand demand through marketing, harnessing innovation in hair health, and executing with excellence by optimizing operations and partnerships - Strategic priorities for 2025 include generating brand demand through elevated visual identity, 360-degree marketing, and enhancing Pro community presence[83](index=83&type=chunk)[84](index=84&type=chunk) - Harnessing innovation by building a future pipeline grounded in foundational hair health, expanding beyond damage repair to strength, elasticity, shine, smoothness, softness, and shape retention[85](index=85&type=chunk) - Executing with excellence by evolving operational and strategic processes, realigning international distribution, enhancing partnerships, and using data-driven insights for growth[86](index=86&type=chunk) [Business Environment & Trends](index=21&type=section&id=Business%20Environment%20%26%20Trends) The Company monitors an unpredictable global macro-economic environment, including risks of recession, inflationary pressures, competitive products and discounting, and currency volatility - The Company monitors an unpredictable global macro-economic environment, including risks of recession, inflationary pressures, competitive products and discounting, and currency volatility[87](index=87&type=chunk) - Increased competitive activity and discounting have been observed in the prestige haircare category[88](index=88&type=chunk) - Olaplex believes its brand reputation, product quality, science-based innovation, asset-light operating model, and engagement with Pro and consumer communities position it to compete effectively[88](index=88&type=chunk) [Results of operations](index=22&type=section&id=Results%20of%20operations) This section provides a detailed analysis of Olaplex's financial performance for the three months ended March 31, 2025, covering net sales, cost of sales, operating expenses, and net income Consolidated Results of Operations | Metric | Three Months Ended March 31, 2025 (in $ thousands) | % of net sales (2025) | Three Months Ended March 31, 2024 (in $ thousands) | % of net sales (2024) | | :------------------------------------ | :--------------------------------------------- | :-------------------- | :--------------------------------------------- | :-------------------- | | Net sales | $96,978 | 100.0% | $98,906 | 100.0% | | Cost of sales | $29,622 | 30.5% | $27,563 | 27.9% | | Gross profit | $67,356 | 69.5% | $71,343 | 72.1% | | Operating expenses | $58,880 | 60.7% | $51,726 | 52.3% | | Operating income | $8,476 | 8.7% | $19,617 | 19.8% | | Net income | $465 | 0.5% | $7,746 | 7.8% | [Net Sales](index=22&type=section&id=Net%20Sales_MD%26A) Total net sales decreased by 1.9% due to lower consumer demand, partially offset by new product launches and customer acquisitions Net Sales by Channel Performance | Net Sales by Channel (in $ thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | $ Change (in $ thousands) | % Change | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :------------------------ | :------- | | Professional | $34,538 | $38,746 | $(4,208) | (10.9)% | | Specialty retail | $38,553 | $34,432 | $4,121 | 12.0% | | DTC | $23,887 | $25,728 | $(1,841) | (7.2)% | | **Total Net sales** | **$96,978** | **$98,906** | **$(1,928)** | **(1.9)%** | - Total net sales decreased **1.9%** primarily due to a lower level of consumer demand, partially offset by product launches and new customers[90](index=90&type=chunk) [Cost of Sales and Gross Profit](index=23&type=section&id=Cost%20of%20Sales%20and%20Gross%20Profit_MD%26A) Cost of sales increased by 7.5%, leading to a 5.6% decrease in gross profit and a 2.6 percentage point reduction in gross profit margin Cost of Sales and Gross Profit Analysis | Metric (in $ thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | $ Change (in $ thousands) | % Change | | :-------------------- | :-------------------------------- | :-------------------------------- | :------------------------ | :------- | | Cost of sales | $29,622 | $27,563 | $2,059 | 7.5% | | Gross profit | $67,356 | $71,343 | $(3,987) | (5.6)% | | Gross profit margin | 69.5% | 72.1% | -2.6 pp | | - Cost of sales increased primarily due to product mix and **$1.1 million** in inventory write-offs for product obsolescence in Q1 2025 (vs. **$0.9 million** in Q1 2024)[91](index=91&type=chunk) [Operating Expenses](index=23&type=section&id=Operating%20Expenses_MD%26A) Total operating expenses increased by 13.8%, driven primarily by higher advertising and marketing expenses and increased legal and professional fees Operating Expenses Breakdown | Metric (in $ thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | $ Change (in $ thousands) | % Change | | :------------------------------------ | :-------------------------------- | :-------------------------------- | :------------------------ | :------- | | Selling, general, and administrative | $47,987 | $40,437 | $7,550 | 18.7% | | Amortization of other intangible assets | $10,893 | $11,289 | $(396) | (3.5)% | | **Total operating expenses** | **$58,880** | **$51,726** | **$7,154** | **13.8%** | - The increase in selling, general and administrative expenses was primarily driven by a **$4.8 million** increase in non-payroll advertising and marketing expenses and **$2.2 million** in legal and professional fees[93](index=93&type=chunk) [Interest Expense, Net](index=23&type=section&id=Interest%20Expense,%20Net_MD%26A) Net interest expense decreased by 6.4% due to lower interest rates during the three months ended March 31, 2025 Net Interest Expense Analysis | Metric (in $ thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | $ Change (in $ thousands) | % Change | | :-------------------- | :-------------------------------- | :-------------------------------- | :------------------------ | :------- | | Interest expense | $13,725 | $14,504 | $(779) | (5.4)% | | Interest income | $(5,952) | $(6,203) | $251 | (4.0)% | | **Interest expense, net** | **$7,773** | **$8,301** | **$(528)** | **(6.4)%** | - Net interest expense decreased due to lower interest rates during the three months ended March 31, 2025, compared to the same period in the previous year[94](index=94&type=chunk) [Other (Income) Expense, Net](index=23&type=section&id=Other%20(Income)%20Expense,%20Net_MD%26A) Other (income) expense, net, increased by 118.8% primarily due to foreign currency transaction gains driven by the performance of the U.S. dollar Other (Income) Expense Analysis | Metric (in $ thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | $ Change (in $ thousands) | % Change | | :-------------------- | :-------------------------------- | :-------------------------------- | :------------------------ | :------- | | Other (income) expense, net | $(178) | $947 | $(1,125) | 118.8% | - Other (income) expense, net, increased primarily due to foreign currency transaction gains driven by the performance of the U.S. dollar[95](index=95&type=chunk) [Income Tax Provision](index=24&type=section&id=Income%20Tax%20Provision_MD%26A) The income tax provision decreased by 84.1%, but the effective tax rate significantly increased to 47.2% due to discrete tax expenses and lower book income Income Tax Provision Analysis | Metric (in $ thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | $ Change (in $ thousands) | % Change | | :-------------------- | :-------------------------------- | :-------------------------------- | :------------------------ | :------- | | Income tax provision | $416 | $2,623 | $(2,207) | (84.1)% | | Effective tax rate | 47.2% | 25.3% | +21.9 pp | | - The effective tax rate for Q1 2025 was higher than the statutory rate of **21%** primarily due to discrete tax expenses for a change in prior year estimates, write-off of deferred tax assets, and forfeitures of stock options/RSUs, impacting lower book income[97](index=97&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=24&type=section&id=Financial%20Condition,%20Liquidity%20and%20Capital%20Resources) This section discusses Olaplex's financial position, cash flow generation, liquidity, debt obligations, and capital resources, including the 2022 Credit Facility and Tax Receivable Agreement [Overview](index=24&type=section&id=Overview_Financial%20Condition) The Company's primary cash sources are product sales, while uses include working capital, operating costs, capital expenditures, and debt servicing, with anticipated lower cash generation and increased legal costs - Primary recurring source of cash is the collection of proceeds from product sales[99](index=99&type=chunk) - Primary use of cash is for working capital, operating costs (employee-related, marketing, fulfillment, overhead, innovation), capital expenditures, and debt servicing[100](index=100&type=chunk) - The Company expects to generate less cash from operations in the current year compared to the prior year, as it funds working capital needs for business growth[100](index=100&type=chunk) - Anticipates increased legal costs associated with the Lilien federal securities class action litigation[100](index=100&type=chunk) [Cash Flows](index=25&type=section&id=Cash%20Flows_Financial%20Condition) Net cash used in operating activities was $2.9 million in Q1 2025, a significant decrease from the prior year, while investing and financing activities also used cash Cash Flow Summary | Cash Flows (in $ thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 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** | - Net cash used in operating activities was **$2.9 million** in Q1 2025, primarily reflecting net income of **$0.5 million** and a **$21.4 million** decrease from changes in operating assets and liabilities[105](index=105&type=chunk) - Net cash used in investing activities was **$1.0 million** in Q1 2025, primarily for software purchase and development[107](index=107&type=chunk) - Net cash used in financing activities was **$1.2 million** in Q1 2025, consisting of **$1.7 million** in principal payments for the 2022 Term Loan Facility, partially offset by **$0.5 million** from stock option exercises[108](index=108&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources_Financial%20Condition) As of March 31, 2025, Olaplex had a total liquidity position of $730.9 million, including cash and available borrowing capacity, which management believes is sufficient for future needs - As of March 31, 2025, the Company had **$580.9 million** of cash and cash equivalents and **$150.0 million** of available borrowing capacity under the 2022 Revolver, totaling a liquidity position of **$730.9 million**[102](index=102&type=chunk) - Including working capital (excluding cash and cash equivalents) of **$57.4 million**, the total liquidity position was **$788.3 million**[102](index=102&type=chunk) - Management believes current cash, cash equivalents, and cash generated from operations will be sufficient to meet anticipated operating costs, debt payments, working capital needs, and capital expenditures over both the short and long term[110](index=110&type=chunk) [2022 Credit Facility](index=26&type=section&id=2022%20Credit%20Facility) As of March 31, 2025, outstanding debt under the 2022 Credit Agreement was $654.8 million, with the Company in compliance with all covenants, and a $300.0 million principal repayment made post-period - As of March 31, 2025, outstanding indebtedness under the 2022 Credit Agreement was **$654.8 million**, with **$6.8 million** classified as current[112](index=112&type=chunk) - The interest rate on outstanding amounts under the 2022 Term Loan Facility was **7.9%** per annum as of March 31, 2025[113](index=113&type=chunk) - The Company was in compliance with all affirmative and negative covenants under the 2022 Credit Agreement as of March 31, 2025, and December 31, 2024[114](index=114&type=chunk) - On May 1, 2025, the Company voluntarily repaid **$300.0 million** of outstanding principal on the 2022 Term Loan Facility using available cash on hand[117](index=117&type=chunk) [Tax Receivable Agreement Obligations](index=26&type=section&id=Tax%20Receivable%20Agreement%20Obligations_Financial%20Condition) The Company is obligated to pay Pre-IPO Stockholders 85% of tax cash savings from intangible asset amortization, with future payments potentially aggregating to $189.3 million through 2041 - The Company is required to pay Pre-IPO Stockholders **85%** of the federal, state, or local tax cash savings realized from the amortization of intangible assets and capitalized transaction costs existing as of the IPO date[118](index=118&type=chunk) - Future payments under the Tax Receivable Agreement relating to Pre-IPO tax assets could aggregate to **$189.3 million**, with payments expected to continue through 2041[119](index=119&type=chunk) [Contractual Obligations and Commitments](index=27&type=section&id=Contractual%20Obligations%20and%20Commitments) There were no material changes to the Company's contractual obligations since the filing of its 2024 Form 10-K - There were no material changes to the Company's contractual obligations since the filing of its 2024 Form 10-K[120](index=120&type=chunk) [Critical Accounting Estimates](index=27&type=section&id=Critical%20Accounting%20Estimates) This section outlines critical accounting estimates, focusing on the annual impairment evaluation of goodwill and the key assumptions used in its fair value assessment [Goodwill](index=27&type=section&id=Goodwill) Goodwill is evaluated for impairment annually, with the latest assessment as of October 1, 2024, concluding no impairment, though future changes in market conditions could necessitate a charge - Goodwill is evaluated for impairment annually during the fourth fiscal quarter, or more frequently if circumstances indicate impairment[122](index=122&type=chunk) - A quantitative assessment as of October 1, 2024, concluded that the fair value of the reporting unit exceeded its carrying value by approximately **19%**, resulting in no impairment of goodwill[123](index=123&type=chunk) - The fair value was estimated using income and market approaches, with key assumptions including a projected terminal growth rate of **3.0%** and an estimated weighted-average cost of capital of **11.0%**[124](index=124&type=chunk) - The Company continues to monitor all assumptions and may be required to record a goodwill impairment charge in the future due to changes in market conditions or interest rates[126](index=126&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) There have been no material changes to Olaplex's market risk exposures or management of market risk from those disclosed in its 2024 Form 10-K - No material changes to market risk exposures or management of market risk from those disclosed in the 2024 Form 10-K[127](index=127&type=chunk) [Item 4. Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that Olaplex's disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2025. There were no material changes in internal control over financial reporting during the quarter [Evaluation of Disclosure Controls and Procedures](index=28&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management, under the supervision of the CEO and CFO, concluded that disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2025 - Management, under the supervision of the Chief Executive Officer and Chief Financial Officer, concluded that disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2025[129](index=129&type=chunk) [Changes in Internal Control Over Financial Reporting](index=28&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) There were no material changes in internal control over financial reporting during the quarter ended March 31, 2025 - There were no changes in internal control over financial reporting during the quarter ended March 31, 2025, that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[130](index=130&type=chunk) Part II. OTHER INFORMATION [Item 1. Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) Olaplex is involved in various legal actions, including intellectual property and consumer claims, which can adversely impact its reputation and financial condition, with details in Note 12 - The Company is involved in litigation or other legal proceedings incidental to its business, including related to intellectual property, regulatory matters, contract, advertising, and other consumer claims[132](index=132&type=chunk) - Litigation can have an adverse impact on the Company's reputation, financial condition, and business, including by utilizing resources and diverting management attention[132](index=132&type=chunk) - For detailed information on certain legal proceedings, refer to 'Note 12 - Commitments and Contingencies - Pending Legal Proceedings' in the financial statements[133](index=133&type=chunk) [Item 1A. Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) An investment in Olaplex common stock involves risks, with a detailed discussion available in 'Item 1A. – Risk Factors' of the 2024 Form 10-K - An investment in the Company's common stock involves risks[134](index=134&type=chunk) - For a detailed discussion of the risks affecting the business, refer to 'Item 1A. – Risk Factors' in the Annual Report on Form 10-K for the year ended December 31, 2024[134](index=134&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports no unregistered sales of equity securities or use of proceeds for the period covered by this Quarterly Report on Form 10-Q - No unregistered sales of equity securities or use of proceeds to report[135](index=135&type=chunk) [Item 3. Defaults Upon Senior Securities](index=29&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms that there were no defaults upon senior securities to report for the period covered by this Quarterly Report on Form 10-Q - No defaults upon senior securities to report[136](index=136&type=chunk) [Item 4. Mine Safety Disclosures](index=29&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Olaplex Holdings, Inc., as its operations do not involve activities related to mine safety - This item is not applicable to the Company[137](index=137&type=chunk) [Item 5. Other Information](index=29&type=section&id=Item%205.%20Other%20Information) During the three months ended March 31, 2025, no director or officer of the Company adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended March 31, 2025[138](index=138&type=chunk) [Item 6. Exhibits](index=29&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, executive officer certifications, and Inline XBRL documents for financial data - Exhibits include corporate governance documents (Restated Certificate of Incorporation, Bylaws) and certifications from the Principal Executive Officer and Principal Financial Officer[139](index=139&type=chunk) - The filing also includes Inline XBRL documents for the instance, schema, calculation, definition, label, and presentation linkbase[139](index=139&type=chunk) [Signatures](index=30&type=section&id=Signatures) The Quarterly Report on Form 10-Q is duly signed by Olaplex Holdings, Inc.'s CEO and COO/CFO as of May 8, 2025, affirming compliance with the Securities Exchange Act of 1934 - The report is signed by Amanda Baldwin, Chief Executive Officer, and Catherine Dunleavy, Chief Operating Officer and Chief Financial Officer[144](index=144&type=chunk) - The signing date for the report is May 8, 2025[144](index=144&type=chunk)

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]

Financial Data and Key Metrics Changes - First quarter net sales were $97 million, a decline of 1.9% year over year, but ahead of internal expectations [10][30] - Adjusted EBITDA was $25.7 million, representing a margin of 26.5%, down from 35.9% a year ago [32][33] - Cash and cash equivalents increased to $580.9 million from $507.5 million in Q1 of fiscal 2024 [34] - Inventory decreased to $79.2 million, down $15.5 million from Q1 of fiscal 2024 [34] Business Line Data and Key Metrics Changes - Specialty retail sales grew 12% year over year to $38.6 million, driven by strong retailer support [31] - Professional channel sales declined 10.9% to $34.5 million, primarily due to softness in international markets [31] - Direct to consumer sales decreased 7.2% to $23.9 million, aligning with a strategy to reduce promotional intensity [32] Market Data and Key Metrics Changes - North America showed modest growth, while international sales declined year over year but were better than expected [11][30] - The U.S. represented 51% of total net sales, with international sales making up 49% [36] Company Strategy and Development Direction - The company introduced the "Bonds and Beyond" strategy, focusing on foundational hair health and innovation [7][8] - Strategic priorities include generating brand demand, harnessing innovation, and executing with excellence [13][22] - The company aims to enhance emotional connections with consumers and expand its product offerings [9][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the resilience of the beauty category despite macroeconomic challenges [48][49] - The company reaffirmed its 2025 guidance, expecting net sales to range from a decline of 3% to an increase of 2% compared to fiscal 2024 [41][40] - Management acknowledged the ongoing transformation and the need for disciplined execution [30][29] Other Important Information - The company invested $18.1 million in non-payroll sales and marketing, an increase of $4.8 million year over year [17] - The company paid down $300 million in debt, reducing its gross leverage ratio from around seven times to four times [34][40] Q&A Session Summary Question: Insights on DTC channel performance and customer engagement - Management noted a deliberate strategy shift in the DTC channel, focusing on promotional activity during key moments [46] - They remain optimistic about the DTC channel's role in the overall strategy [48] Question: Changes in outlook due to macro trends - Management reiterated confidence in the beauty category's resilience and the company's long-term vision [49] Question: Marketing initiatives and KPIs - Management highlighted early positive KPIs from the new marketing campaign, indicating strong engagement [57] Question: Specialty retail channel performance and inventory health - Management confirmed healthy inventory levels and attributed specialty retail growth to strong retailer support [63] Question: Promotional strategy across channels - Management emphasized a strategic approach to promotions, using them selectively rather than broadly [75] Question: Marketing spend cadence for the year - Management indicated that marketing spend would increase in the second quarter and continue throughout the year [98] Question: Tariff impact and inventory planning - Management expects minimal impact from tariffs and is proactively managing inventory levels [35][39]

Financial Data and Key Metrics Changes - First quarter net sales were $97 million, a decline of 1.9% year over year, but ahead of internal expectations [10][31] - Adjusted EBITDA was $25.7 million, representing a margin of 26.5%, down from 35.9% a year ago [33] - Cash and cash equivalents increased to $580.9 million from $507.5 million in Q1 of fiscal 2024 [35] - Inventory decreased to $79.2 million, down $15.5 million from Q1 of fiscal 2024 [35] Business Line Data and Key Metrics Changes - Specialty retail sales grew 12% year over year to $38.6 million, driven by strong retailer support [32] - Professional channel sales declined 10.9% to $34.5 million, largely due to softness in international markets [32] - Direct to consumer sales declined 7.2% to $23.9 million, aligning with a strategy to reduce promotional intensity [33] Market Data and Key Metrics Changes - North America saw modest growth, while international sales declined year over year but were better than expected [11][31] - The U.S. represented 51% of total net sales, with international sales making up 49% [36] Company Strategy and Development Direction - The company is focusing on a "Bonds and Beyond" strategy to position itself as a foundational health and beauty company [6][7] - Strategic vision is based on three pillars: moving beyond damage repair, empowering professionals, and creating emotional connections with consumers [8][9] - Plans to launch two to three strategic products annually, supported by strong consumer education and stylist engagement [22] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the beauty category's resilience despite macroeconomic challenges [49] - The company is committed to executing its strategy and maintaining its 2025 guidance, reflecting confidence in its long-term vision [29][41] - Management acknowledges the ongoing complexity of operating through change but sees early signs of progress in transformation efforts [30] Other Important Information - The company invested $18.1 million in non-payroll sales and marketing, an increase of $4.8 million year over year [17] - The company has reduced outstanding debt by $300 million, lowering its gross leverage ratio and unlocking estimated annual interest savings of $20 million [35] Q&A Session Summary Question: Insights on DTC channel customer acquisition and retention - Management noted a deliberate strategy change in the DTC channel, focusing on using promotions strategically during key moments [47][48] Question: Changes in outlook due to macro trends - Management remains optimistic about the beauty category's resilience and reiterated guidance for the year [51][52] Question: Marketing initiatives and KPIs - Management highlighted early positive KPIs from the new marketing campaign, indicating a focus on emotional connections with consumers [59][60] Question: Specialty retail channel performance and inventory - Management confirmed healthy inventory levels and attributed specialty retail growth to strong retailer support and belief in the brand's future [65][66] Question: Promotional strategy across channels - Management clarified that the strategy to reduce promotional intensity applies across all channels, focusing on strategic use during critical moments [76][78] Question: Marketing spend cadence for the year - Management indicated that marketing spend would increase in the second quarter, with a focus on executing the brand strategy [101] Question: Tariff impacts and inventory planning - Management expects any tariff impacts to be modest and is proactively managing inventory to mitigate potential issues [36][41]

[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 |

Financial Performance - The company reported net sales of $96.978 million for Q1 2025, a decrease of 1.9% compared to $98.906 million in Q1 2024 [3][5] - Gross profit for the quarter was $67.356 million, down 5.6% from $71.343 million in the same period last year [3][5] - Net income significantly declined to $0.465 million, a 94% drop from $7.746 million in Q1 2024, resulting in diluted EPS of $0.00 compared to $0.01 in the prior year [3][5][26] Operational Highlights - Specialty Retail sales increased by 12.0% to $38.6 million, while Professional and Direct-To-Consumer channels saw declines of 10.9% and 7.2%, respectively [5] - The company had $580.9 million in cash and cash equivalents as of March 31, 2025, slightly down from $586.0 million at the end of 2024 [4] Debt Management - On May 1, 2025, the company voluntarily repaid $300 million of long-term debt using available cash, with no prepayment penalties incurred [6] Guidance for Fiscal Year 2025 - The company reiterated its guidance for fiscal year 2025, expecting net sales between $410 million and $431 million, adjusted gross profit margin of 70.5% to 71.5%, and adjusted EBITDA margin of 20% to 22% [7][8] - The guidance reflects management's expectations regarding investments in demand generation, innovation, and execution capabilities [7] Strategic Focus - The CEO emphasized the company's commitment to navigating a dynamic environment and investing in strategic priorities to drive growth [2]

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]