Oddity Tech .(ODD) - 2024 Q2 - Quarterly Report

ODDITY TECH Q2 2024 Earnings Release Second Quarter 2024 Financial Highlights ODDITY reported record Q2 results with significant growth in revenue and profitability, surpassing all guidance Q2 2024 Financial Performance vs. Q2 2023 | Metric | Q2 2024 | Q2 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Revenue | $193 million | $151 million | +27% | | Gross Profit | $139 million | $107 million | +30% | | Net Income | $45 million | $30 million | +52% | | Adjusted Net Income | $51 million | $32 million | +58% | | Adjusted EBITDA | $62 million | $42 million | +49% | | Diluted EPS | $0.73 | $0.52 | +40% | | Adjusted Diluted EPS | $0.82 | $0.56 | +46% | Q2 2024 Actual Results vs. Guidance | Metric | Actual Results | June 7 Updated Guidance | May 7 Initial Guidance High End | | :--- | :--- | :--- | :--- | | Net Revenue | $193 million | ~$189 million | $189 million | | Gross Margin | 72.2% | ~71.0% | 71.0% | | Adjusted EBITDA | $62 million | ~$60 million | $56 million | - The company maintained a strong balance sheet with $268 million in cash, cash equivalents, and investments, and zero outstanding debt as of June 30, 2024[2][4] - Generated a record $104 million of free cash flow in the first half of 2024[1][2] Management Commentary and Strategic Initiatives Management highlighted strong performance driven by technology, new brand development, and a share buyback program - CEO Oran Holtzman stated the business is "firing on all cylinders" and plans to continue investing cash flow in technology, science, and new brands to maintain a competitive edge[2] - Key Q2 achievements include exceeding financial guidance, raising the full-year outlook, achieving profitable growth at both IL MAKIAGE and SpoiledChild, and developing new brands[2] - The company initiated a share repurchase program, buying back 250,000 shares for $10 million, with $140 million remaining on the $150 million authorization[2] - Dr. Ido Bachelet, with postdoctoral research experience from MIT and Harvard, was appointed as the new Chief Science Officer to lead ODDITY LABS[6] Financial Outlook The company raised its full-year 2024 guidance and provided a strong outlook for the third quarter Full Year 2024 Outlook (Raised) | Metric | Current FY2024 Outlook | Prior FY2024 Outlook | | :--- | :--- | :--- | | Net Revenue | $633 - $640 million | $626 - $635 million | | Gross Margin | ~71.0% | ~71.0% | | Adjusted EBITDA | $142 - $146 million | $139 - $143 million | | Adjusted Diluted EPS | $1.71 - $1.76 | $1.57 - $1.62 | Third Quarter 2024 Outlook | Metric | Q3 2024 Outlook | | :--- | :--- | | Net Revenue | $115 - $117 million | | Gross Margin | ~68.0% | | Adjusted EBITDA | $21 - $23 million | | Adjusted Diluted EPS | $0.21 - $0.23 | - The company expects to deliver 2024 financials ahead of its long-term growth algorithm of 20%-plus revenue growth and 20%-plus adjusted EBITDA margin[7] Consolidated Financial Statements This section presents unaudited consolidated income statements, balance sheets, and cash flow statements Consolidated Statements of Income Consolidated Statements of Income (U.S. dollar in thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Net revenue | $192,774 | $151,311 | $404,402 | $316,965 | | Gross profit | $139,097 | $106,845 | $295,203 | $224,330 | | Operating income | $53,042 | $36,833 | $92,023 | $61,554 | | Net income | $45,491 | $29,997 | $78,474 | $49,587 | | Diluted earnings per share | $0.73 | $0.52 | $1.26 | $0.87 | Consolidated Balance Sheets Consolidated Balance Sheet Highlights (U.S. dollar in thousands) | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $86,853 | $36,538 | | Total current assets | $283,180 | $223,812 | | Total assets | $518,836 | $404,906 | | Liabilities & Equity | | | | Total current liabilities | $130,923 | $109,312 | | Total liabilities | $144,634 | $121,799 | | Total shareholders' equity | $374,202 | $283,107 | | Total liabilities and shareholders' equity | $518,836 | $404,906 | Consolidated Statements of Cash Flows Consolidated Statements of Cash Flows (U.S. dollar in thousands) | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $105,440 | $75,967 | | Net cash used in investing activities | ($55,518) | ($45,680) | | Net cash used in financing activities | ($1,711) | ($4,575) | | Net increase in cash, cash equivalents and restricted cash | $48,219 | $25,597 | Reconciliation of GAAP to Non-GAAP Measures This section provides reconciliations for non-GAAP measures including Adjusted EBITDA, Adjusted Net Income, and Free Cash Flow Reconciliation of Net Income to Adjusted EBITDA (U.S. dollar in thousands) | | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $45,491 | $29,997 | $78,474 | $49,587 | | Adjustments | $16,807 | $11,795 | $31,968 | $20,637 | | Adjusted EBITDA | $62,298 | $41,792 | $110,442 | $70,224 | Reconciliation of Net Income to Adjusted Net Income (U.S. dollar in thousands) | | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $45,491 | $29,997 | $78,474 | $49,587 | | Adjustments | $5,598 | $2,272 | $10,995 | $3,716 | | Adjusted Net Income | $51,089 | $32,269 | $89,469 | $53,303 | Reconciliation of Net Operating Cash Flow to Free Cash Flow (U.S. dollar in thousands) | | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net operating cash flow | $105,440 | $75,967 | | Purchase of property and equipment | ($1,502) | ($761) | | Free cash flow | $103,938 | $75,206 | Supplementary Information This section defines non-GAAP financial measures and includes the forward-looking statements disclaimer - The company defines non-GAAP measures like Adjusted EBITDA, Adjusted Net Income, and Free Cash Flow to provide supplemental information for evaluating business performance[13][14][15] - The report contains forward-looking statements regarding business strategy and financial outlook, which are subject to risks and uncertainties detailed in SEC filings[16]