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]