Core Insights - Waldencast plc reported a 5.6% year-over-year increase in net revenue for Q2 2025, reaching $66.8 million, with an Adjusted EBITDA Margin of 5.0% [2][10] - The company experienced contrasting performances across its brands, with Obagi Medical showing strong growth while Milk Makeup faced challenges in international markets [2][6] - Waldencast has updated its FY 2025 guidance to reflect current trends and investments aimed at long-term growth [1][8] Obagi Medical - Obagi Medical achieved double-digit net revenue growth in Q3 2025, driven by strong e-commerce and international market performance [3][19] - The brand is preparing for the launch of Obagi Saypha®, which will double its addressable market in the U.S. [3][4] - The sale of the Obagi Japan trademark for $82.5 million and credit facility refinancing has strengthened the company's balance sheet [5][8] Milk Makeup - Milk Makeup's net revenue for Q3 2025 was $25.2 million, a decline of 20.1% compared to Q3 2024, despite an 8% increase in U.S. consumption [20][23] - The brand's growth in the U.S. was supported by retail expansion and successful product launches, but international performance was weaker [6][20] - Transformation initiatives are being implemented to revitalize the brand, including team restructuring and increased investment in international markets [7][8] Financial Performance - For H1 2025, Waldencast's net revenue increased by 0.5% year-over-year to $132.3 million, with a net loss of $185.2 million primarily due to impairment charges [13][14] - Adjusted EBITDA for H1 2025 was $7.7 million, representing a margin of 5.8%, down from 13.4% in H1 2024 [15][16] - Q3 2025 net revenue decreased by 3.4% year-over-year to $67.8 million, with Obagi Medical contributing $42.6 million and Milk Makeup $25.2 million [18][23] Strategic Initiatives - Waldencast is conducting a strategic review to maximize shareholder value, having retained Lazard as a financial advisor [8][9] - The company is focused on building a leading dermatological megabrand at the intersection of skincare and medical aesthetics [4][5] - Continued investments in innovation, digital capabilities, and new distribution channels are expected to drive sustainable growth [25][24]

Financial Performance - Q1 2025 - Net Revenue was $65.4 million, a decrease of 4.1% compared to the previous year[23, 102] - Adjusted Gross Profit was $50.0 million, a decrease of 4.0% compared to the previous year[23, 102] - Adjusted EBITDA was $4.4 million, a decrease of 61.5% compared to the previous year[23, 102] - Obagi Medical's Net Revenue increased by 7.1% to $36.2 million, with an Adjusted Gross Profit of $29.7 million and Adjusted EBITDA of $5.9 million[23, 102] - Milk Makeup's Net Revenue decreased by 15.1% to $29.3 million, with an Adjusted Gross Profit of $20.4 million and Adjusted EBITDA of $4.4 million[23, 102] Liquidity - Net Debt was $172.1 million as of March 31, 2025[34] - Cash and Cash Equivalents were $10.8 million as of March 31, 2025[34] - $22.5 million undrawn commitment under revolving credit facility as of April 30, 2025[34] FY 2025 Outlook - The company anticipates mid-teens Net Revenue growth for FY 2025[35] - The company anticipates mid-to-high teens Adjusted EBITDA Margin for FY 2025[35] Milk Makeup - Hydro Grip Gel Skin Tint - The Hydro Grip Gel Skin Tint launch generated $18 million in EMV (Earned Media Value)[50] - The Hydro Grip Gel Skin Tint launch achieved 406 million in reach and 245 million impressions[50, 51]

Financial Performance - Q1 2025 net revenue was $65.4 million, representing a 4.1% decline from Q1 2024 [4][10] - Adjusted gross margin improved to 76.4%, an increase of 10 basis points year-over-year [5][10] - Adjusted EBITDA for Q1 2025 was $4.4 million, or 6.7% of net revenue, reflecting a significant decline of 61.5% compared to Q1 2024 [6][10] Brand Performance - Milk Makeup's net revenue decreased by 15.1% to $29.3 million, impacted by the previous year's successful product launch and inventory reductions [12][13] - Obagi Medical achieved net revenue of $36.2 million, up 7.1% from $33.8 million in Q1 2024, driven by strong direct-to-consumer sales [13][10] Strategic Initiatives - The company is increasing marketing investments by high teens percentage to build brand equity and support long-term growth objectives [3][5] - Milk Makeup's entry into Ulta Beauty and the launch of Hydro Grip Gel Tint are expected to drive future sales growth [3][12] Liquidity and Debt - Waldencast secured a new $205 million five-year credit facility, enhancing financial flexibility and extending debt maturity to March 2030 [7][8] - As of March 31, 2025, the company held $10.8 million in cash and cash equivalents and had a net debt of $172.1 million [8][10] Outlook - The company aims for mid-teens net revenue growth and an adjusted EBITDA margin in the mid-to-high teens for fiscal 2025 [14][15]

Financial Performance - FY 2024 - Waldencast's Net Revenue reached $273.9 million, with a Comparable Net Revenue Growth of 27.5%[39] - The Adjusted Gross Profit was $203.6 million, representing a 74.3% Adjusted Gross Margin[39] - Adjusted EBITDA stood at $40.3 million, resulting in a 14.7% Adjusted EBITDA Margin[39] - Adjusted Free Cash Flow was $31.7 million, with an Adjusted EBITDA to Adjusted Free Cash Flow Conversion of 78.8%[41] Financial Performance - Q4 2024 - Net Revenue for Q4 2024 was $72.1 million, showing a 29.4% Comparable Net Revenue Growth[36] - Adjusted Gross Profit for Q4 reached $52.6 million, with a 73.0% Adjusted Gross Margin[36] - Adjusted EBITDA for Q4 was $11.2 million, resulting in a 15.5% Adjusted EBITDA Margin[36] Brand Performance - FY 2024 - Obagi Medical's Net Revenue was $149.3 million, with a Comparable Net Revenue Growth of 30.7% and an Adjusted EBITDA of $30.5 million[80] - Milk Makeup's Net Revenue was $124.6 million, with an Adjusted EBITDA of $29.1 million[80] Future Outlook - For FY 2025, the company anticipates mid-teens Net Revenue growth and mid-to-high teens Adjusted EBITDA Margin[45]

Financial Data and Key Metrics Changes - Net revenue for Q4 reached $72.1 million, a 29.4% increase year-over-year, with Milk Makeup growing 31.9% and Obagi Medical growing 27.7% [18][19] - For the full fiscal year, net revenue was $273.9 million, a 27.5% increase compared to the previous year [20] - Adjusted EBITDA for Q4 doubled to $11.2 million, with an adjusted EBITDA margin of 15.5%, reflecting strong revenue momentum [19][21] - Adjusted gross profit for the full year rose to $203.6 million, a 35.3% increase, with an adjusted gross profit margin of 74.3% [20][21] Business Line Data and Key Metrics Changes - Milk Makeup generated Q4 net revenue of $29.9 million, a 31.9% increase, with adjusted EBITDA rising to $4.8 million [28][30] - Obagi Medical achieved Q4 net revenue of $42.2 million, a 27.7% increase, with adjusted EBITDA of $9.8 million [38][39] - For the fiscal year, Milk Makeup's net revenue was $124.6 million, a 24% increase, while Obagi Medical's net revenue was $149.3 million, a 30.7% increase [30][39] Market Data and Key Metrics Changes - The prestige beauty market grew 7% in 2024, with professional skincare growing 8% and prestige makeup growing 5% [7][8] - The company noted that its brands are outperforming the market, with Milk Makeup growing five times faster than the overall beauty market rate [14][47] Company Strategy and Development Direction - The company aims to build a multi-brand platform encompassing various strategic categories and geographies, focusing on operational efficiency and brand equity [12][16] - The growth strategy for Milk Makeup includes expanding brand awareness, launching innovative products, and broadening distribution both online and offline [31][34] - Obagi Medical's strategy focuses on dermatological brand DNA, cutting-edge innovation, and increasing brand awareness to fuel growth [40][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of beauty consumers despite a changing macro environment, emphasizing premiumization trends [72] - The company anticipates strong performance in 2025, expecting mid-teens net revenue growth and further expansion of adjusted EBITDA margins [25][26] Other Important Information - The company secured a new $205 million credit facility, enhancing financial flexibility and extending debt maturity [24] - Cash position at the end of 2024 was $14.8 million, with an additional $30 million available on the revolving credit facility [23] Q&A Session Summary Question: Can you provide details on the cadence of innovation and confidence in sales acceleration? - Management highlighted that Q1's flat guidance is due to anniversary effects of previous successful launches and retail inventory adjustments, with expectations for strong sequential growth throughout the year [50][52][54] Question: What are the marketing strategies for the year? - Management plans to increase marketing investments, focusing on broader paid campaigns while maintaining organic growth strategies [61][63] Question: How is the macro environment affecting consumer health? - Management noted that the beauty industry remains resilient, with consumers continuing to spend on premium products despite some normalization in growth rates [70][72] Question: Will the Ulta launch affect Sephora sales? - Management confirmed that there is no loss of space at Sephora due to the Ulta launch, and the overall impact is expected to be incremental [88][90]