• Revenue: Grew 27% to $647 million in 2024.
• Adjusted EBITDA: $150 million at a 23.3% margin, growing 40% year over year.
• Free Cash Flow: Generated $134 million, converting over 130% of net income into cash.
• Q4 Revenue: Increased 27% to $97 million.
• Gross Margin: 72.7% in Q4, expanded 330 basis points year over year.
• Adjusted EBITDA Margin: 12.3% in Q4.
• Adjusted Diluted EPS: $0.20 in Q4.
• Average Order Value: Increased 12% year over year.
• Cash and Equivalents: $169 million with zero debt at year-end.
• Share Buybacks: Repurchased 3.6 million shares for approximately $147 million in 2024.
• 2025 Revenue Growth Target: 20% with an adjusted EBITDA margin of 20%.

• Warning! GuruFocus has detected 4 Warning Signs with COMM.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• ODDITY Tech Ltd (NASDAQ:ODD) reported a 27% revenue growth in 2024, reaching $647 million, with an adjusted EBITDA of $150 million, marking a 40% year-over-year increase.
• The company achieved a strong free cash flow of $134 million, converting over 130% of net income into cash.
• ODDITY Tech Ltd (NASDAQ:ODD) has consistently beaten earnings guidance for seven consecutive quarters since going public.
• Both brands, Il Makiage and Spoiled Child, experienced double-digit revenue growth, with Il Makiage surpassing $500 million in revenue.
• The company is expanding its international presence, with promising growth in markets like the UK, Germany, and Australia, and plans for further expansion.

Negative Points

• ODDITY Tech Ltd (NASDAQ:ODD) faces increased media costs, which could impact customer acquisition expenses.
• The company anticipates lower gross margins for Brand 3 due to higher costs associated with prescription products and doctor networks.
• There is a potential risk if TikTok, a platform used for customer acquisition, ceases operations in the US, although the company claims minimal impact.
• ODDITY Tech Ltd (NASDAQ:ODD) is making significant investments in new brands and Oddity Labs, which may not contribute materially to 2025 revenue.
• The company is operating in a competitive market with challenges from traditional beauty companies and macroeconomic concerns affecting consumer confidence.

Q & A Highlights

Q: Can you elaborate on your international strategy and why you're focusing on it now? A: Oran Holtzman, Co-founder and CEO: We have been working on accelerating our international growth for years. In 2025, we decided to increase our presence in markets like the UK, Germany, and Australia, as well as test new markets. This decision was not due to any softness in the US market but rather a strategic choice to leverage the massive opportunity international markets present. Our competitors have a significant portion of their business internationally, and we aim to build localized experiences for each market to ensure strong performance from day one.

Q: Are you seeing any consumer weakness or trade-down due to macroeconomic concerns? A: Oran Holtzman, Co-founder and CEO: We haven't observed any significant consumer weakness. Our direct-to-consumer model and focus on online sales have insulated us from some of the challenges faced by competitors focused on brick-and-mortar. We believe the shift to online is still in its early stages, and we remain bullish about the future.

Q: Can you discuss the repeat purchase behavior and its impact on your business? A: Oran Holtzman, Co-founder and CEO: Repeat purchases are a significant part of our revenue, growing to over 60% in 2024. Our 12-month net revenue repeat rate is over 100%, which is among the best in the D2C space. We drive repeat purchases through strong product satisfaction, expanding wallet share with new products, and cross-selling between brands.

Q: What are the key milestones for Brand 3, and how do you plan to scale it? A: Oran Holtzman, Co-founder and CEO: Brand 3 is a telehealth platform focusing on skin and body issues like acne and eczema. We plan to soft launch in Q3 and officially launch in Q4. We've invested significantly in developing a comprehensive product line and telehealth infrastructure. The brand leverages our platform and user base, and we are confident in its potential to scale.

Q: How do you balance organic growth at Oddity Labs with M&A opportunities? A: Oran Holtzman, Co-founder and CEO: We focus on building internal capabilities while also exploring M&A opportunities to strengthen Oddity Labs. We look for strong teams with advanced technologies that align with our target areas. This approach allows us to accelerate development and enhance our capabilities in molecule discovery and product innovation.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.