Olaplex (OLPX) - 2025 Q2 - Quarterly Results

Executive Summary & Q2 2025 Highlights CEO Commentary OLAPLEX CEO Amanda Baldwin reported solid performance in H1 2025, with encouraging progress in various transformations and confidence in executing the 'Bonds and Beyond' strategy - CEO Amanda Baldwin stated the company achieved solid performance in H1 2025, with encouraging progress in various transformations, expressing confidence in future execution of the 'Bonds and Beyond' strategy[2] Second Quarter 2025 Financial Performance OLAPLEX's Q2 2025 net sales grew 2.3% to $106.3 million, but the company reported a net loss of $7.7 million and diluted EPS of $(0.01), with H1 net sales slightly up 0.2% and a net loss Three Months Ended June 30, 2025 Q2 2025 Key Financial Data (vs. Q2 2024) | Metric (in thousands) | 2025 | 2024 | % Change | | :-------------------- | :---------- | :---------- | :------- | | Net Sales | $106,284 | $103,943 | 2.3% | | Gross Profit | $75,635 | $72,437 | 4.4% | | Gross Profit Margin | 71.2% | 69.7% | | | Adjusted Gross Profit | $77,819 | $74,739 | 4.1% | | Adjusted Gross Profit Margin | 73.2% | 71.9% | | | SG&A | $65,909 | $45,423 | 45.1% | | Adjusted SG&A | $54,348 | $42,555 | 27.7% | | Net (loss) income | $(7,742) | $5,779 | (234.0)% | | Adjusted EBITDA | $24,550 | $32,054 | (23.4)% | | Adjusted EBITDA Margin | 23.1% | 30.8% | | | Diluted EPS | $(0.01) | $0.01 | (200.0)% | Six Months Ended June 30, 2025 H1 2025 Key Financial Data (vs. H1 2024) | Metric (in thousands) | 2025 | 2024 | % Change | | :-------------------- | :---------- | :---------- | :------- | | Net Sales | $203,262 | $202,849 | 0.2% |\n| Gross Profit | $142,991 | $143,780 | (0.5)% |\n| Gross Profit Margin | 70.3% | 70.9% | |\n| Adjusted Gross Profit | $147,567 | $148,269 | (0.5)% |\n| Adjusted Gross Profit Margin | 72.6% | 73.1% | |\n| SG&A | $113,896 | $85,860 | 32.7% |\n| Adjusted SG&A | $98,697 | $79,804 | 23.7% |\n| Net (loss) income | $(7,277) | $13,525 | (153.8)% |\n| Adjusted EBITDA | $50,214 | $67,538 | (25.7)% |\n| Adjusted EBITDA Margin | 24.7% | 33.3% | |\n| Diluted EPS | $(0.01) | $0.02 | (150.0)% | - Q2 2025 net sales increased by 2.3% to $106.3 million; professional channel sales grew 12.1%, DTC channel sales grew 12.8%, while specialty retail channel sales decreased by 16.7%[6] - Q2 2025 net loss was $7.7 million, compared to a net income of $5.8 million in Q2 2024; diluted EPS was $(0.01), compared to $0.01 in Q2 2024[6] Financial Position and Debt Management Balance Sheet Snapshot As of June 30, 2025, cash and cash equivalents were $289.3 million, a significant decrease from $586 million at year-end 2024, with inventory slightly up to $78.3 million and net long-term debt reduced to $351.9 million Key Balance Sheet Items (in millions USD) | Metric | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | Cash and cash equivalents | $289.3 | $586.0 | | Inventory | $78.3 | $75.2 | | Long-term debt, net | $351.9 | $643.7 | Debt Repayment On May 1, 2025, the company voluntarily repaid $300 million of long-term debt using existing cash, incurring no prepayment penalties or fees - On May 1, 2025, the company voluntarily repaid $300 million of long-term debt using existing cash, incurring no prepayment penalties or fees[9] Fiscal Year 2025 Guidance The company reaffirmed its FY2025 guidance for net sales between $410 million and $431 million, adjusted gross profit margin, and adjusted EBITDA margin, anticipating high-single-digit net sales decline in Q3 and growth in Q4 Fiscal Year 2025 Guidance (in millions USD) | Metric | 2025 Guidance | 2024 Actual | | :---------------------- | :------------ | :---------- | | Net Sales | $410 - $431 | $423 | | Adjusted Gross Profit Margin* | 70.5% to 71.5% | 71.4% | | Adjusted EBITDA Margin* | 20% to 22% | 30.7% | - Management anticipates a high-single-digit net sales decline in Q3 2025 and high-single-digit growth in Q4, reflecting the impact of innovation, replenishment shipment timing, and promotional activities on consumer demand[10] Company Overview About OLAPLEX OLAPLEX, a health and beauty company founded in 2014, revolutionized premium haircare with its breakthrough 'Complete Bond Technology™', selling products globally through professional, specialty retail, and direct-to-consumer channels - OLAPLEX is a health and beauty company founded in 2014, driven by breakthrough innovation and professional hairstylists, revolutionizing premium haircare with its 'Complete Bond Technology™'[13] - OLAPLEX's award-winning products are sold globally through an omnichannel model, serving professional, specialty retail, and direct-to-consumer channels[13] Investor Call Information The company will host an investor conference call and webcast on August 7, 2025, at 9:00 AM ET to review Q2 2025 financial results - The company plans to host an investor conference call and webcast on August 7, 2025, at 9:00 AM ET to review Q2 2025 financial results[12] Important Disclosures Cautionary Note Regarding Forward-Looking Statements This press release contains forward-looking statements based on management's beliefs and assumptions regarding financial condition, operating results, growth, and FY2025 guidance, which are not guarantees of future performance and may differ materially due to known and unknown risks and uncertainties - This press release contains forward-looking statements regarding the company's financial condition, operating results, growth, sales, profitability, and FY2025 financial guidance[14] - Forward-looking statements are predictions based on potentially inaccurate assumptions, not guarantees of future performance, involving known and unknown risks, inherent uncertainties, and other unpredictable factors that could cause actual results to differ materially from expectations[15][16] Disclosure Regarding Non-GAAP Financial Measures The company uses non-GAAP financial measures like Adjusted EBITDA, Adjusted Gross Profit, and Adjusted SG&A to provide supplementary information for performance evaluation, but cannot reconcile forward-looking non-GAAP guidance to GAAP without unreasonable effort - The company utilizes non-GAAP financial measures such as Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Profit, Adjusted Gross Profit Margin, and Adjusted SG&A to provide meaningful supplementary information for evaluating operating performance[19] - The company cannot provide a reconciliation of forward-looking Adjusted EBITDA Margin and Adjusted Gross Profit Margin guidance to the most directly comparable GAAP measures without unreasonable effort, due to the inability to accurately estimate relevant variables and adjustments[22] Condensed Consolidated Financial Statements (Unaudited) Condensed Consolidated Balance Sheets As of June 30, 2025, total assets were $1.517 billion, total liabilities $642.8 million, and stockholders' equity $874.2 million, with cash decreasing from $586 million to $289.3 million and long-term debt from $643.7 million to $351.9 million Condensed Consolidated Balance Sheets (in thousands USD) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :---------------- | | Assets | | | | Cash and cash equivalents | $289,339 | $585,967 | | Accounts receivable, net | $32,643 | $14,934 | | Inventory | $78,323 | $75,165 | | Total current assets | $462,669 | $689,713 | | Intangible assets, net | $873,840 | $899,549 | | Goodwill | $168,300 | $168,300 | | Total assets | $1,516,923 | $1,767,723 | | Liabilities and stockholders' equity | | | | Accounts payable | $25,061 | $10,423 | | Accrued expenses and other current liabilities | $82,944 | $35,639 | | Total current liabilities | $119,945 | $64,654 | | Long-term debt | $351,902 | $643,712 | | Total liabilities | $642,752 | $893,321 | | Total stockholders' equity | $874,171 | $874,402 | | Total liabilities and stockholders' equity | $1,516,923 | $1,767,723 | Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) In Q2 2025, net sales were $106.3 million and gross profit $75.6 million, resulting in an operating loss of $1.2 million and a net loss of $7.7 million; H1 net sales were $203.3 million, with operating income of $7.3 million and a net loss of $7.3 million Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (in thousands USD) | Metric (Three Months Ended June 30) | 2025 | 2024 | Metric (Six Months Ended June 30) | 2025 | 2024 | | :---------------------------------- | :---------- | :---------- | :-------------------------------- | :---------- | :---------- | | Net sales | $106,284 | $103,943 | Net sales | $203,262 | $202,849 | | Gross profit | $75,635 | $72,437 | Gross profit | $142,991 | $143,780 | | Operating (loss) income | $(1,204) | $16,278 | Operating income | $7,272 | $35,895 | | Net (loss) income | $(7,742) | $5,779 | Net (loss) income | $(7,277) | $13,525 | | Diluted EPS | $(0.01) | $0.01 | Diluted EPS | $(0.01) | $0.02 | Condensed Consolidated Statements of Cash Flows In H1 2025, net cash from operating activities was $18 million, investing activities used $1.3 million, and financing activities used $313.3 million, resulting in period-end cash and cash equivalents of $289.3 million, a $296.6 million decrease from the start of the year Condensed Consolidated Statements of Cash Flows (in thousands USD) | Metric (Six Months Ended June 30) | 2025 | 2024 | | :-------------------------------- | :---------- | :---------- | | Net (loss) income | $(7,277) | $13,525 | | Net cash provided by operating activities | $17,987 | $59,949 | | Net cash used in investing activities | $(1,325) | $(2,178) | | Net cash used in financing activities | $(313,290) | $(16,246) | | Net (decrease) increase in cash and cash equivalents | $(296,628) | $41,525 | | Cash and cash equivalents - end of period | $289,339 | $507,925 | Reconciliation of Non-GAAP Financial Measures to GAAP Equivalents Reconciliation of Net (Loss) Income to Adjusted EBITDA This section provides a reconciliation of net (loss) income to Adjusted EBITDA, including adjustments for depreciation and amortization, net interest expense, income tax provision, share-based compensation, and certain litigation-related expenses Reconciliation of Net (Loss) Income to Adjusted EBITDA (in thousands USD) | Metric (Three Months Ended June 30) | 2025 | 2024 | Metric (Six Months Ended June 30) | 2025 | 2024 | | :---------------------------------- | :---------- | :---------- | :-------------------------------- | :---------- | :---------- | | Net (loss) income | $(7,742) | $5,779 | Net (loss) income | $(7,277) | $13,525 | | Depreciation and amortization | $13,206 | $13,172 | Depreciation and amortization | $26,578 | $26,798 | | Interest expense, net | $8,848 | $8,335 | Interest expense, net | $16,621 | $16,636 | | Income tax provision | $(1,323) | $1,900 | Income tax provision | $(907) | $4,523 | | Share-based compensation | $3,463 | $2,861 | Share-based compensation | $6,381 | $6,044 | | Certain litigation related expenses | $8,098 | $0 | Certain litigation related expenses | $8,818 | $0 | | Executive reorganization cost | $0 | $7 | Executive reorganization cost | $0 | $12 | | Adjusted EBITDA | $24,550 | $32,054 | Adjusted EBITDA | $50,214 | $67,538 | | Adjusted EBITDA margin | 23.1% | 30.8% | Adjusted EBITDA margin | 24.7% | 33.3% | Reconciliation of Gross Profit to Adjusted Gross Profit This section provides a reconciliation of gross profit to Adjusted Gross Profit, with the primary adjustment being amortization of patented formulations Reconciliation of Gross Profit to Adjusted Gross Profit (in thousands USD) | Metric (Three Months Ended June 30) | 2025 | 2024 | Metric (Six Months Ended June 30) | 2025 | 2024 | | :---------------------------------- | :---------- | :---------- | :-------------------------------- | :---------- | :---------- | | Gross profit | $75,635 | $72,437 | Gross profit | $142,991 | $143,780 | | Amortization of patented formulations | $2,184 | $2,302 | Amortization of patented formulations | $4,576 | $4,489 | | Adjusted gross profit | $77,819 | $74,739 | Adjusted gross profit | $147,567 | $148,269 | | Adjusted gross profit margin | 73.2% | 71.9% | Adjusted gross profit margin | 72.6% | 73.1% | Reconciliation of SG&A to Adjusted SG&A This section provides a reconciliation of Selling, General, and Administrative (SG&A) expenses to Adjusted SG&A, primarily adjusting for share-based compensation, certain litigation-related expenses, and executive reorganization costs Reconciliation of SG&A to Adjusted SG&A (in thousands USD) | Metric (Three Months Ended June 30) | 2025 | 2024 | Metric (Six Months Ended June 30) | 2025 | 2024 | | :---------------------------------- | :---------- | :---------- | :-------------------------------- | :---------- | :---------- | | SG&A | $65,909 | $45,423 | SG&A | $113,896 | $85,860 | | Share-based compensation | $(3,463) | $(2,861) | Share-based compensation | $(6,381) | $(6,044) |\n| Certain litigation related expenses | $(8,098) | $0 | Certain litigation related expenses | $(8,818) | $0 |\n| Executive reorganization cost | $0 | $(7) | Executive reorganization cost | $0 | $(12) |\n| Adjusted SG&A | $54,348 | $42,555 | Adjusted SG&A | $98,697 | $79,804 | - Litigation expenses related to the Lilien securities class action lawsuit are considered non-recurring and non-ordinary, adjusted in non-GAAP metrics starting Q1 2025, following the court's denial of the company's motion to dismiss in February 2025[31] Contacts This section provides contact information for investor relations and financial media - Investor Relations Contact: Michael Oriolo, Vice President, Investor Relations, Email: michael.oriolo@olaplex.com[32] - Financial Media Contact: Lisa Bobroff, Vice President, Global Communications & Consumer Engagement, Email: lisa.bobroff@olaplex.com[32]