Financial Data and Key Metrics Changes - ODDITY reported a record revenue of $810 million for 2025, representing a 25% increase year-over-year [4][21] - Adjusted EBITDA reached $163 million, with an adjusted EBITDA margin of 20.2%, consistent with long-term targets [4][21] - The company experienced a gross margin of 70.5% in Q4, which compressed by 220 basis points year-over-year [19] Business Line Data and Key Metrics Changes - IL MAKIAGE generated approximately $560 million in revenue, with low double-digit growth, and IL MAKIAGE SKIN accounted for about 40% of brand revenue [6][7] - SpoiledChild achieved approximately $250 million in revenue, marking a strong performance for a brand launched only four years ago [7] - The launch of Methodic, a medical telehealth platform, is off to a promising start, focusing on dermatological treatments [8] Market Data and Key Metrics Changes - ODDITY's international revenue grew by 42%, representing 17.5% of overall net revenue for 2025 [7] - The company noted that many competitors generate over 65% of their net sales from international markets, highlighting ODDITY's growth potential [7] Company Strategy and Development Direction - ODDITY is focused on leveraging its platform and technology to expand into new product categories and brands, with significant investments in ODDITY Labs and tech infrastructure [5][9] - The company aims to address consumer pain points with high-performance products and has a robust product development pipeline [9][10] - Despite challenges in user acquisition costs, ODDITY remains committed to its long-term growth strategy and online distribution model [17][36] Management's Comments on Operating Environment and Future Outlook - Management acknowledged unprecedented increases in user acquisition costs due to algorithm changes from a major advertising partner, impacting new user acquisition efficiency [12][13] - The company expects a negative impact on 2026 financial results, particularly in the first half, but does not foresee a structural issue in its business model [17][18] - Management remains optimistic about returning to growth and believes the current challenges are temporary [36][38] Other Important Information - ODDITY ended the year with $776 million in cash and cash equivalents, positioning itself well for future investments and potential stock buybacks [22] - The company is navigating a situation where current customer acquisition costs are significantly higher than historical levels, affecting profitability on first orders [24] Q&A Session Summary Question: Inquiry about LTV changes and user acquisition issues - Management noted that the issue was first observed in the second half of 2025 and worsened in 2026, with ongoing efforts to address it while maintaining the try-before-you-buy model [28][29][30] Question: Concerns about guidance and user acquisition shifts - Management confirmed no change in strategy towards online distribution and expressed confidence in returning to growth despite current challenges [34][36] Question: Discussion on advertising spend strategy - Management emphasized the need to balance spending to feed algorithms while managing costs effectively during high CPA periods [41][43] Question: Clarification on changes within the acquisition funnel - Management explained that the dislocation affects multiple brands and highlighted the importance of maintaining a diversified advertising strategy [51][52] Question: Strength in international opportunities and brand launches - Management reported strong initial success with the Methodic brand and emphasized the need for user acquisition to support growth [59][60]

Financial Data and Key Metrics Changes - ODDITY reported a record revenue of $810 million for 2025, representing a 25% increase year-over-year [4][21] - Adjusted EBITDA reached $163 million, with an adjusted EBITDA margin of 20.2%, consistent with long-term targets [21] - The company experienced a gross margin of 72.7%, which expanded by 30 basis points year-over-year [21] - Advertising costs increased approximately 50% year-over-year, impacting profitability [21] Business Line Data and Key Metrics Changes - IL MAKIAGE generated approximately $560 million in revenue, with low double-digit growth, and IL MAKIAGE SKIN accounted for about 40% of brand revenue [6][7] - SpoiledChild achieved revenue of approximately $250 million, marking strong growth for a brand launched only four years ago [7] - METHODIQ, the newly launched brand, is positioned in the medical-grade space and is off to a promising start [8] Market Data and Key Metrics Changes - ODDITY's international revenue grew by 42%, representing 17.5% of overall net revenue for 2025 [7] - The company noted that many competitors generate over 65% of their net sales from international markets, indicating a potential growth opportunity for ODDITY [7] Company Strategy and Development Direction - ODDITY is focused on leveraging its platform, brand, and technology to drive growth in the beauty and wellness categories [5] - The company is committed to investing in ODDITY Labs and new product development, maintaining a long-term growth strategy despite short-term challenges [9][25] - The management emphasized that the current user acquisition cost issues are technical and not indicative of a structural problem in the business model [18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged unprecedented increases in user acquisition costs due to algorithm changes from a major advertising partner, impacting new user acquisition efficiency [12][13] - Despite these challenges, management remains confident in the company's ability to return to growth and does not plan to change its long-term strategy [17][25] - The company expects a negative impact on 2026 financial results, particularly in the first half, but anticipates normalization in the second half of the year [23][24] Other Important Information - ODDITY ended the year with a strong liquidity position, holding $776 million in cash and cash equivalents [22] - The company plans to opportunistically return cash to shareholders through stock buybacks [22] Q&A Session Summary Question: Inquiry about LTV change and its relation to Google's Andromeda - Management observed the issue starting in the second half of 2025, worsening into 2026, and is working on solutions while maintaining the try before you buy model [28][29][30] Question: Concerns about guidance and user acquisition shifts - Management confirmed no change in strategy, emphasizing confidence in online growth and the temporary nature of current challenges [34][35][36] Question: Discussion on advertising spend strategy post-normalization - Management intends to balance advertising spend to maintain algorithm signals while avoiding overspending at high CPA levels [41][43] Question: Clarification on changes within the acquisition funnel - Management noted that the dislocation affects multiple brands and is working on adjustments to improve performance [51][52][54] Question: Impact of dislocation on METHODIQ launch - The launch of METHODIQ is expected to continue growing without significant negative effects due to its smaller scale compared to other brands [68]

Financial Data and Key Metrics Changes - ODDITY reported a record revenue of $810 million for 2025, representing a 25% increase year-over-year [4][22] - Adjusted EBITDA reached $163 million, with an adjusted EBITDA margin of 20.2%, consistent with long-term targets [4][22] - The company experienced a gross margin of 72.7%, which expanded by 30 basis points year-over-year [22] - In Q4 2025, net revenue grew by 24% to $153 million, exceeding guidance [20] Business Line Data and Key Metrics Changes - IL MAKIAGE generated approximately $560 million in revenue, with low double-digit growth, and IL MAKIAGE SKIN accounted for about 40% of brand revenue [6][22] - SpoiledChild achieved revenue of approximately $250 million, marking a strong performance for a brand launched only four years ago [8][22] - The launch of Methodic, a medical telehealth platform, is off to a strong start, focusing on dermatological treatments [9] Market Data and Key Metrics Changes - ODDITY's international revenue grew by 42%, representing 17.5% of overall net revenue for 2025 [7] - The company noted that many competitors generate over 65% of their net sales from international markets, indicating room for growth [7] Company Strategy and Development Direction - ODDITY is focused on expanding its brand portfolio and investing in technology and product development, particularly through ODDITY Labs [5][10] - The company aims to leverage its platform and technology to maintain a competitive edge in the beauty and wellness market [5] - Despite challenges in user acquisition costs, the long-term strategy remains unchanged, emphasizing online consumer migration [5][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged unprecedented increases in user acquisition costs due to algorithm changes from a major advertising partner, impacting new user acquisition efficiency [13][19] - The company expects a negative impact on 2026 financial results, particularly in the first half, but remains committed to correcting the issue and returning to growth [18][25] - Management believes the current challenges are technical rather than structural, and they anticipate normalization in the second half of 2026 [19] Other Important Information - ODDITY ended the year with a strong liquidity position, holding $776 million in cash and cash equivalents [24] - The company plans to repurchase stock opportunistically, with $103 million remaining on its repurchase authorization [24] Q&A Session Summary Question: Inquiry about LTV change and its relation to Google's Andromeda - Management observed issues starting in the second half of 2025, worsening into 2026, and is working on solutions while maintaining the try-before-you-buy model [29][30][32] Question: Concerns about guidance and user acquisition shifts - Management confirmed no change in strategy, emphasizing online growth and addressing current user acquisition challenges without moving into retail [36][37] Question: Discussion on advertising spend strategy post-normalization - Management indicated a balanced approach to advertising spend, continuing to feed algorithms while managing costs effectively [42][44] Question: Clarification on changes within the acquisition funnel - Management noted that the dislocation affects multiple brands and is working on adjustments to improve performance [52][53] Question: Strength in international opportunities and brand rollout - The launch of Methodic is performing well, and management remains focused on growth despite current challenges [60][61]

Core Insights - ODDITY Tech Ltd. reported strong financial results for Q4 2025, exceeding guidance in revenue, profit, and earnings per share for the 11th consecutive quarter since going public [2][3] - The company experienced a dislocation in user acquisition costs due to changes in algorithms from its largest advertising partner, which led to increased costs [2][3] - Despite challenges, ODDITY remains focused on long-term growth and has identified solutions to address the acquisition cost issues [2][3] Financial Performance - Q4 2025 net revenue reached $153 million, a 24% increase year-over-year, with adjusted EBITDA of $13 million [5][7] - Full year 2025 net revenue was $810 million, up 25% year-over-year, with adjusted EBITDA of $163 million [5][11] - The company reported a Q4 net income of $6 million, compared to $5 million in Q4 2024, and a full year net income of $110.7 million, up from $101.5 million in 2024 [7][11] Shareholder Returns - ODDITY plans to return cash to shareholders through a share buyback program, with $103 million remaining from a $150 million authorization [4] Strategic Initiatives - The successful launch of the new brand METHODIQ during Q4 2025 is seen as a key growth driver [2][6] - The company continues to invest in its ODDITY LABS molecule discovery platform, indicating a commitment to innovation and future growth [6] Cash Position - ODDITY holds a strong cash position with $776 million in cash, cash equivalents, and investments as of December 31, 2025 [6][39] - The company amended its credit agreements to secure credit facilities totaling $350 million in January 2026 [6]

Core Insights - ODDITY Tech Ltd. will release its fourth quarter and full year 2025 financial results on February 25, 2026, before market opening, followed by a conference call at 8:30 a.m. Eastern Time [1] Company Overview - ODDITY is a consumer tech company focused on building and scaling digital-first brands to disrupt the traditional beauty and wellness industries [3] - The company serves approximately 60 million users through its AI-driven online platform, utilizing data science to identify consumer needs and develop beauty and wellness products [3] - ODDITY owns brands such as IL MAKIAGE, SpoiledChild, and METHODIQ, with headquarters in New York City, an R&D center in Tel Aviv, Israel, and a biotechnology lab in Boston [3]

Core Viewpoint - ODDITY Tech (NASDAQ:ODD) is recognized as a promising mid-cap consumer staples stock with a significant upside potential, supported by positive analyst ratings and strong product performance [1][3]. Group 1: Analyst Ratings and Price Target - Evercore ISI analyst Mark Mahaney has reaffirmed an outperform rating for ODDITY Tech, projecting a price target of $80, indicating an upside of nearly 126% [1][3]. - Citizens also assigned an outperform rating to ODDITY Tech, estimating a similar 126% upside based on the same price target of $80 [3]. Group 2: Product Performance and Revenue Potential - The latest skin care offering, METHODIQ, has received a promising market response, with expectations of generating incremental revenues between $80 million and $200 million by 2028 [2]. - METHODIQ has outperformed the SpoiledChild product at a comparable stage, suggesting strong growth and cross-selling opportunities in the future [4]. Group 3: Financial Performance - ODDITY Tech has demonstrated strong fundamental performance, achieving EBITDA margins of nearly 20% for nine consecutive quarters and over 20% topline growth for ten consecutive quarters [3]. Group 4: Business Model and Innovation - ODDITY Tech operates as a consumer technology business that disrupts the beauty and wellness industries through an AI-enabled platform, utilizing data science, machine learning, and biotechnology to develop digital-first brands like SpoiledChild and IL MAKIAGE [5].

Group 1: Company Performance - Oddity Tech Ltd. reported a 24% year-over-year revenue increase to $148 million in Q3 2025, with a simultaneous 24% rise in adjusted diluted EPS [2] - The company's growth was driven by a 40% year-over-year surge in international revenue, particularly in established markets like the UK and Australia [2] - Oddity is testing new markets in France, Italy, and Spain as part of its international expansion strategy [2] Group 2: Financial Guidance - Oddity raised its full-year 2025 revenue guidance, now forecasting total revenue between $806 million and $809 million, representing 24% to 25% growth [3] - The adjusted diluted EPS is projected to be in the range of $2.10 to $2.12 for the full year [3] Group 3: Strategic Developments - A major highlight of the quarter was the launch of METHODIQ, a new dermatology-focused medical care brand, expected to scale faster than the previous successful launch of SpoiledChild [3] - Although METHODIQ is anticipated to initially carry lower gross margins due to third-party physician network costs, management remains optimistic about its growth potential [3] Group 4: Analyst Ratings - JPMorgan analyst Cory Carpenter lowered the price target on Oddity to $59 from $67 while maintaining an Overweight rating on the shares [1] - The firm updated its investment ratings and price targets for companies within the small- and mid-cap internet and video game sectors as part of its 2026 market forecast [1]

Core Insights - ODDITY Tech Ltd. reported strong third quarter results for 2025, exceeding guidance in revenue, profit, and earnings per share, and is positioned for continued growth with new brand launches and investments in technology [2][3][4] Financial Performance - Third quarter net revenue reached $148 million, a 24% increase year-over-year from $119 million [4][6] - Gross profit for the third quarter was $106 million, up 27% from $83 million in the same period last year, with a gross margin of 71.6%, an increase of 170 basis points [4][6] - Adjusted EBITDA for the third quarter was $29 million, a 16% increase from $25 million year-over-year [4][6] - Net income for the third quarter was $18 million, consistent with the previous year, while adjusted net income rose to $25 million, a 26% increase from $20 million [4][6] Business Developments - The company successfully launched its new brand, METHODIQ, aimed at transforming the medical care system with advanced technology and precise treatments [2][5] - ODDITY is expanding its ODDITY LABS molecule discovery platform, indicating a focus on innovation and new product development [5] Financial Outlook - ODDITY raised its full-year 2025 financial outlook, projecting net revenue between $806 million and $809 million, representing a year-over-year growth of 24% to 25% [9][10] - The company anticipates a gross margin of approximately 72.5% and adjusted EBITDA between $161 million and $163 million for the full year [10] - For the fourth quarter of 2025, ODDITY expects net revenue between $149 million and $152 million, with a gross margin of approximately 69% [11]

Core Viewpoint - Oddity Tech Ltd. is identified as an oversold mid-cap stock with significant growth potential, despite a recent price target reduction by KeyBanc Capital Markets from $90 to $80, maintaining an Overweight rating [1][2]. Group 1: Company Overview - Oddity Tech Ltd. operates as an AI-driven beauty and wellness platform, known for brands like IL MAKIAGE and SpoiledChild, utilizing machine learning and proprietary data to personalize products in skincare, cosmetics, and wellness [4]. - The company went public in 2023 and has rapidly gained attention in the digital beauty market [4]. Group 2: Financial Performance and Projections - KeyBanc projects that Oddity can achieve revenue growth exceeding 20% and long-term EBITDA margins above 20%, indicating strong potential for both top-line and margin expansion [2]. - The recent adjustment in price target is attributed to broader market trends affecting mid-cap growth stocks rather than any decline in Oddity's fundamentals [3]. Group 3: Strategic Positioning - Oddity's vertically integrated direct-to-consumer (DTC) model, along with aggressive investments in research and development, positions the company uniquely within the beauty-tech sector [3].

Performance Overview - Baron International Growth Fund gained 16.91% during Q2 2025, outperforming its benchmark MSCI ACWI ex USA Index, which appreciated 12.03% [3] - The Fund has exceeded both the Benchmark and Proxy Benchmark on a one-year trailing basis [3] Annualized Performance - For the 1-year period ended June 30, 2025, the Fund's Institutional Shares returned 19.72%, compared to 17.72% for the MSCI ACWI ex USA Index [4] - Over the last 3 years, the Fund's Institutional Shares returned 10.34%, while the Benchmark returned 13.99% [4] Market Catalysts - The U.S. trade/tariff policy pivot and strong momentum towards a pro-growth tax reduction and fiscal spending bill were key drivers of global capital markets [5] - Despite tariff deferrals, there remains a risk of retaliation and a weaker U.S. dollar, which could shift capital flows towards non-dollar assets [5] Sector Performance - The Energy sector, particularly investments in Waga Energy SA, was the largest contributor to the Fund's relative performance [6] - Strong stock selection in Consumer Staples and Industrials sectors also contributed positively, while Health Care sector allocation detracted from performance [6] Country Contributions - Overweight positioning in Korea, particularly in shipbuilding, significantly contributed to relative performance [7] - Positive stock selection in France, India, and Israel also bolstered results, while China showed modest adverse stock selection effects [7] Top Contributors - HD Korea Shipbuilding & Offshore Engineering Co., Ltd. contributed 1.66% to returns, driven by improving profit margins and backlog growth [8] - Waga Energy SA and ODDITY Tech Ltd. also made significant contributions, with returns of 1.48% and 1.01% respectively [9] Top Detractors - Alibaba Group Holding Limited detracted 0.26% from performance due to results that fell short of investor expectations amid geopolitical uncertainty [12] - Full Truck Alliance Co. Ltd. and Argenx SE also detracted from performance due to revised earnings guidance and sales below expectations, respectively [13][14] Recent Activity - New investments were made in Centum Electronics Limited and XP Inc., focusing on global security and fintech disruption themes [22][24] - Increased exposure to existing positions, including AMG Critical Materials N.V. and SK hynix Inc., while exiting several positions to concentrate on higher conviction investments [26] Outlook - The Fund anticipates continued relative outperformance of non-U.S. equities, driven by changing U.S. priorities and fiscal expansion in the EU [30] - The focus remains on sectors and companies positioned to benefit from geopolitical shifts and technological advancements, particularly in Korea and India [32]