Company Overview - Oddity Tech Ltd. (ODD) operates as a personal care company with a digital-first direct-to-consumer (DTC) model [1] - The company's brand portfolio includes Il Makiage, SpoiledChild, and the newer telehealth concept MethodIQ [1] Recent Challenges - ODD has encountered difficulties due to an abnormal spike in user acquisition costs, which are linked to recent changes in the market [1]

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]

Company Overview - Oddity Tech, trading under NASDAQ:ODD, is recognized for its innovative beauty brands, Il Makiage and SpoiledChild, which have gained popularity due to their strong online presence and unique product offerings [1] - The company operates in the competitive beauty and skincare industry, facing competition from major players like Estée Lauder and L'Oréal [1] Financial Performance - Oddity's net revenue increased by 24% year over year, reaching $148 million, driven by strong online sales for its brands [3] - The company's gross margin improved to 71.6%, up from 69.9% the previous year, indicating effective cost management [3][6] - Adjusted net income soared by 26% to $25 million, or $0.40 per share, surpassing Wall Street's forecast of $0.35 per share [4][6] Market Activity - Following a price target set by Truist Financial at $80, indicating a potential increase of about 84.71%, ODD shares surged over 10% by midday [2][6] - The current stock price is $39.57, reflecting a 6.49% increase, with a market capitalization of approximately $2.25 billion [5]

Financial Data and Key Metrics Changes - ODDITY reported a 24% year-over-year revenue growth in Q3, reaching $148 million, exceeding guidance of 21% to 23% growth [16][19] - Adjusted diluted earnings per share increased to $0.40, surpassing guidance of $0.33 to $0.36 [18] - Gross margins expanded to 71.6%, up 170 basis points from the previous year, exceeding guidance of 68% [17] Business Line Data and Key Metrics Changes - Il Makiage experienced double-digit online revenue growth, with a target of $1 billion revenue by 2028 [11] - SpoiledChild is expected to generate $225 million in revenue for 2025, showing strong performance [12] - METHODIQ, the new brand, aims to launch 28 products addressing various skin conditions, with a focus on dermatology [8][9] Market Data and Key Metrics Changes - International revenue increased approximately 40% year-over-year in the first nine months of 2025, with significant growth in existing markets like the U.K. and Australia [11][24] - The U.S. still accounts for 83% of total revenue, indicating room for international expansion [23] Company Strategy and Development Direction - ODDITY is focused on expanding its international presence while responsibly managing growth across brands and geographies [23] - The company aims to leverage technology and innovation, particularly through ODDITY Labs, to enhance product offerings and consumer experience [14][52] - METHODIQ is positioned to transform the medical care system by providing high-efficacy treatments without traditional barriers [6][7] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the industry but emphasized strong financial performance and growth potential [5][16] - The company raised its full-year guidance, expecting net revenue between $806 million and $809 million for 2025, representing 24% to 25% growth [19] - Management remains optimistic about the consumer environment, citing strong repeat purchase rates as a buffer against acquisition cost increases [40] Other Important Information - ODDITY plans to launch a major media campaign for METHODIQ, including a significant TikTok activation [10][89] - The company has a strong cash position with $793 million in cash and equivalents, plus $200 million available on undrawn credit facilities [19][60] Q&A Session Summary Question: Can you unpack the 40% year-to-date growth in international markets? - Management noted that 83% of revenue still comes from the U.S., with international growth primarily from existing markets like Canada and the U.K. [23][24] Question: How does METHODIQ plan to attract new customers? - METHODIQ is expected to draw customers from existing brands while also focusing on user acquisition [27] Question: What is the growth outlook for Il Makiage and SpoiledChild? - Management aims for sustained 20% growth across brands, with Il Makiage targeting $1 billion by 2028 [75] Question: How is the company addressing higher acquisition costs? - Management highlighted strong repeat purchase rates as a key factor in offsetting higher acquisition costs [40] Question: What is the financial profile of METHODIQ? - METHODIQ is expected to have a similar long-term growth framework as Il Makiage and SpoiledChild, with a focus on repeat business [50] Question: How will the company leverage its physician network for METHODIQ? - The company is currently using third-party networks for physicians and plans to integrate technology to enhance treatment outcomes [67]