Financial Data and Key Metrics Changes - In Q1 2025, revenue grew 27% to $268 million, with adjusted EBITDA of $52 million, representing a 19.5% adjusted EBITDA margin and free cash flow of $87 million [5][24][27] - The company expects full year revenue growth to be between 22-23%, or between $790 million and $798 million, raising the gross margin outlook to 71% for the full year [29][30] Business Line Data and Key Metrics Changes - The growth in net revenue was driven primarily by increased orders, with average order value increasing by 4% year over year, influenced by a mix of higher-priced products [24][26] - Il Makiage is on track to meet its $1 billion revenue goal by 2028, with skin products expected to approach 40% of brand revenue this year [10][11] Market Data and Key Metrics Changes - International markets contributed to growth, although they currently represent less than 20% of the business, with both U.S. and international markets growing in double digits [36][62] - The company is expanding its presence in international markets, having tested large-scale operations in countries like France, Italy, and Spain, with positive results [63] Company Strategy and Development Direction - The company aims to build one of the largest beauty companies globally by focusing on online sales and high-efficacy products, investing heavily in technology and data-driven user customization [6][7] - The strategic priorities for 2025 include driving existing brands, accelerating international expansion, and launching new brands [10][11][19] Management's Comments on Operating Environment and Future Outlook - Management views the current environment as a significant opportunity, with the business model allowing for aggressive growth despite economic challenges [21][22] - The company remains confident in its ability to exceed long-term growth targets of 20% revenue growth and 20% adjusted EBITDA margins [30] Other Important Information - The company has zero debt and exited the quarter with $257 million in cash equivalents and investments, along with a $200 million undrawn credit line [27][28] - The company is actively looking for acquisition opportunities to enhance its platform, focusing on brands and technology that can provide significant value [28][62] Q&A Session Summary Question: Contribution of international markets to the quarter - Management confirmed that international markets are a core part of the growth strategy, with both U.S. and international markets growing double digits in Q1, although international is still less than 20% of the business [36][62] Question: Impact of the FTC's click-to-cancel rule - Management does not foresee a significant impact from the regulation, as the company has already adapted its subscription and cancellation processes to be user-friendly [38][39] Question: Factors driving gross margin increases - Management highlighted that gross margin improvements are due to cost efficiencies and product mix, with a focus on contribution margin rather than gross margin as a key performance indicator [44][47] Question: Details on Brand three and its launch - Management expressed excitement about Brand three, emphasizing the extensive testing and technology development that has been completed, positioning the brand for success upon launch [53][55] Question: Strategic focus for acquisitions - Management indicated that acquisitions would focus on brands with strong products or technology that would take significant time to develop internally, particularly in biotech and AI [62][63]
Oddity Tech .(ODD) - 2025 Q1 - Earnings Call Transcript