Oddity Tech (ODD) Q1 2026 earnings summary

Executive summary

• Q1 2026 net revenue was $197.9 million, a 26% year-over-year decline, but slightly better than the expected 30% drop, mainly due to a technical issue with the largest advertising partner causing abnormally high customer acquisition costs (CPA).

• IL MAKIAGE and SpoiledChild experienced severe CPA spikes across multiple markets, impacting new customer acquisition and overall unit economics, with IL MAKIAGE seeing a CPA index of 2.8 in H1 2026.

• Remediation efforts, including shifting 40% of acquisition revenue from Try Before You Buy to standard Buy, showed early signs of improvement, with May marking the first sequential CPA recovery since Q4 2025.

• Methodiq, the new telehealth platform, is performing in line with expectations, targeting $25 million in revenue for 2026, with strong initial demand and product innovation.

• Share buyback program authorized up to $200 million, with 6–6.1 million shares repurchased for $82–$82.3 million, reducing share count by about 10–10.6%.

Financial highlights

• Gross margin compressed by 520 basis points to 69.7% due to product mix and lower average order value (AOV).

• Adjusted EBITDA was -$7 million, reflecting high CPA and continued investment in growth initiatives.

• Adjusted diluted EPS was -$0.17; free cash flow was -$21 million.

• Ended Q1 with $667–$667.4 million in cash, cash equivalents, and investments; $350 million credit facility undrawn.

• Net loss for Q1 2026 was $21.4 million, compared to net income of $37.8 million in Q1 2025.

Outlook and guidance

• Full-year adjusted EBITDA expected to be positive, but visibility on other P&L items remains limited.

• Q2 2026 net revenue expected to decline 25–30% year-over-year; adjusted EBITDA guidance is $8–$10 million.

• Recovery initiatives are ongoing, with normalization targeted for the second half of 2026.