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01/10 19:46
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary reveals mixed signals: strong financial performance and optimistic guidance, but concerns about new customer acquisition and the health of the U.S. consumer. The Q&A section highlights uncertainties around METHODIQ's financial impact and management's reluctance to provide specific guidance. While international expansion and new brand launches are positives, the lack of clarity on key metrics and potential external market softness tempers enthusiasm. Given the company's market cap, these factors suggest a neutral stock price movement over the next two weeks.
Revenue $148 million in Q3 2025, a 24% year-over-year increase. Growth driven by double-digit online growth at IL MAKIAGE and SpoiledChild.
Gross Margins 71.6% in Q3 2025, expanded by 170 basis points year-over-year. Expansion due to cost efficiencies and favorable mix, despite higher tariffs.
Adjusted EBITDA $29 million in Q3 2025, exceeding guidance of $26 million to $28 million. Reflects investments in growth engines like METHODIQ and tech platform.
Adjusted Diluted Earnings Per Share $0.40 in Q3 2025, a 24% year-over-year increase. Excludes $9 million of share-based compensation expense.
Free Cash Flow $90 million for the first 9 months of 2025. Includes $16 million outflows related to inventory for METHODIQ and tariff planning.
International Revenue Increased around 40% year-over-year for the first 9 months of 2025. Growth driven by scaling in markets like U.K. and Australia, and tests in France, Italy, and Spain.
IL MAKIAGE Revenue Double-digit online growth in Q3 2025. Skin category on track to be 40% of brand revenue for the year.
SpoiledChild Revenue Expected to cross $225 million in 2025. Strong performance attributed to innovation lineup.
Launch of METHODIQ: ODDITY launched METHODIQ, a telehealth platform and brand focused on dermatology, aiming to transform medical care with customized, high-efficacy treatments. The launch includes 28 prescription and nonprescription products, with plans to expand into other medical domains.
Product innovation: METHODIQ products include oral supplements, topical treatments, and medical-grade makeup. Four products formulated with proprietary ODDITY LABS molecules will address skin conditions like dark spots and eczema.
AI and tech integration: METHODIQ uses AI-driven vision tools and a tracking app for weekly check-ins, ensuring compliance and progress tracking for users.
International expansion: ODDITY's international revenue grew 40% year-over-year in the first 9 months of 2025. The company scaled in markets like the U.K. and Australia and tested new markets such as France, Italy, and Spain.
Growth in IL MAKIAGE: IL MAKIAGE revenue grew double digits online, with a target of $1 billion revenue by 2028. Skin products are expected to account for 40% of the brand's revenue in 2025.
Financial performance: ODDITY achieved 24% revenue growth in Q3 2025, with adjusted EBITDA of $29 million and gross margins of 71.6%. Full-year 2025 revenue is projected to reach $806-$809 million.
Cost management: Despite tariff headwinds, gross margins expanded due to cost efficiencies and favorable mix. No price increases are planned to offset tariffs.
Focus on durable growth: ODDITY is leveraging the consumer shift online and demand for high-efficacy products to drive growth.
Investment in innovation: The company is investing in METHODIQ, ODDITY LABS, and AI-driven tech platforms to sustain long-term growth.
Tariff Headwinds: The company experienced gross margin impact from higher tariffs during the period, which is expected to remain manageable but persist into 2026.
Average Order Value Decline: Average order value declined by around 1%, impacted by mix, including faster growth in international markets which carry lower AOV.
Media Costs: Higher-than-planned media costs were incurred during the quarter, although the media backdrop improved as the quarter progressed.
Inventory Outflows: The company experienced $16 million of outflows related to inventory, including building inventory for METHODIQ and modifying shipment timing for tariff planning purposes.
Dermatology Market Challenges: The dermatology market faces challenges such as lack of efficacy and personalization in drugstore products, high friction in accessing dermatologists, and declining standards of care for conditions like acne, hyperpigmentation, and eczema.
Revenue Growth: Full year 2025 net revenue is expected to be between $806 million and $809 million, representing 24%-25% year-over-year growth. Fourth quarter revenue is expected to increase between 21%-23% year-over-year.
Gross Margin: Expected to be approximately 72.5% for the full year 2025.
Adjusted EBITDA: Expected to be between $161 million and $163 million for the full year 2025.
Adjusted Diluted Earnings Per Share: Expected to be between $2.10 and $2.12 for the full year 2025, assuming no share buybacks.
METHODIQ Launch and Expansion: METHODIQ, a new brand, has been launched with plans to expand into additional medical domains beyond dermatology. Within the first 6 months, 4 products formulated with proprietary molecules will address skin conditions like dark spots, eczema, and scarring. Future expansion into other medical domains is under development.
IL MAKIAGE Revenue Target: The brand remains on track to achieve $1 billion in revenue by 2028. International revenue increased by 40% year-over-year in the first 9 months of 2025, with plans for further scaling in 2026.
SpoiledChild Revenue: The brand is expected to cross $225 million in revenue in 2025, with new product innovations planned for 2026.
ODDITY LABS Product Development: At least 8 products with proprietary molecules are planned for 2026, including 4 for METHODIQ and 4 for IL MAKIAGE and SpoiledChild.
Technology and AI Initiatives: Continued investment in AI-driven commerce agents, advertising creative, and customer-facing initiatives to enhance direct-to-consumer engagement.
Share Buybacks: The company expects adjusted diluted earnings per share will be between $2.10 and $2.12, assuming no share buybacks in 2025.
The earnings call summary reveals mixed signals: strong financial performance and optimistic guidance, but concerns about new customer acquisition and the health of the U.S. consumer. The Q&A section highlights uncertainties around METHODIQ's financial impact and management's reluctance to provide specific guidance. While international expansion and new brand launches are positives, the lack of clarity on key metrics and potential external market softness tempers enthusiasm. Given the company's market cap, these factors suggest a neutral stock price movement over the next two weeks.
The earnings call summary reveals strong financial performance with revenue and EBITDA growth, alongside optimistic guidance. The Q&A section highlights strategic growth plans, particularly in international markets and new brand launches, despite some vagueness in management's responses. The company's raised gross margin outlook and successful EPS exceeding guidance further bolster the positive sentiment. The market cap suggests a moderate reaction, leading to a predicted stock price increase of 2% to 8% over the next two weeks.
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