Oddity Tech .(ODD)2024-05-08 21:35Financial Data and Key Metrics Changes - The company achieved a net revenue growth of 28% to 48 million, with a margin of 22.7%, reflecting a 559 basis point increase from the prior year [37] - The company generated 252 million in cash and equivalents, with zero debt [37][56] Business Line Data and Key Metrics Changes - Both IL MAKIAGE and SpoiledChild contributed to revenue growth, with IL MAKIAGE's skin line expected to grow from 20% to 25% of brand revenue in 2024 [33][36] - The company reported that repeat purchases accounted for over half of sales last year, indicating strong customer loyalty and retention [34][82] Market Data and Key Metrics Changes - The company operates in a large total addressable market (TAM) that is still dominated by offline competitors, providing significant growth opportunities [33] - The online beauty market is transforming, with a shift towards science-backed products, which the company is strategically investing in [55] Company Strategy and Development Direction - The company is focused on long-term growth with a strategy to maintain over 20% revenue growth and 20% adjusted EBITDA margin [61] - Investments are being made in new brands (Brand 3 and Brand 4) and ODDITY LABS to enhance product efficacy and expand the product portfolio [41][61] - The company emphasizes a data-driven approach to customer acquisition and retention, which differentiates it from competitors [87] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue growing despite a challenging consumer environment, noting no signs of slowing in user acquisition or behavior [21][55] - The company is proactively managing growth to avoid over-delivery on revenue and profit objectives, indicating a disciplined approach to scaling [38][67] Other Important Information - The company has a unique business model that allows for efficient scaling, with a focus on repeat purchases and cross-selling across brands [34][82] - The company is building a robust infrastructure for ODDITY LABS, focusing on high efficacy and safety protocols for future product launches [41] Q&A Session Summary Question: Insights on LABS and commercialization timeline - Management indicated that ODDITY LABS is focused on developing higher efficacy molecules and will not launch products until efficacy and safety are 100% assured [41] Question: Gross margin expectations for the back half of the year - Management explained that gross margins are not a primary KPI; instead, they focus on contribution margins and are confident in achieving their gross margin targets [9][61] Question: Return rates and consumer behavior in a tougher environment - Management reported no uptick in return rates, indicating strong customer retention and acquisition metrics despite a challenging consumer environment [21][23] Question: Marketing strategy and user acquisition - The company highlighted a favorable acquisition environment and a data-driven approach that allows for efficient user acquisition without damaging margins [87]