Olaplex (OLPX) - 2025 Q1 - Quarterly Results

First Quarter 2025 Financial Highlights Performance Summary 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] Key Financial Results (Q1 2025 vs Q1 2024) 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] Balance Sheet and Financial Position 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] Fiscal Year 2025 Guidance Guidance Overview 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] - The guidance assumes the current consumer spending environment and no material impact from tariffs[8] Guidance Metrics 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) Condensed Consolidated Balance Sheets 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 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 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 Disclosure and Reconciliation 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] 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 |