Oddity Tech (ODD) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 and H1 2024 results, with Q2 net revenue of $193M (up 27% year-over-year) and adjusted EBITDA of $62M (up 49%), surpassing guidance and prior year performance.

• Both IL MAKIAGE and SpoiledChild brands delivered strong double-digit growth, with IL MAKIAGE skin products now 25% of brand revenue and the skin segment scaling to $100M annualized revenue.

• Business model is highly profitable, driven by strong repeat sales, efficient customer acquisition, and robust free cash flow generation.

• ODDITY LABS and new brands (Brand 3 and 4) are in development, with launches planned for H2 2025.

• Appointed Dr. Ido Bachelet as Chief Science Officer for ODDITY LABS, succeeding Dr. Evan Zhao.

Financial highlights

• Q2 2024 net revenue was $193M, up 27% year-over-year, with average order value up 6%.

• Q2 gross margin expanded 154–150 bps to 72.2% year-over-year, driven by supply chain and logistics efficiencies.

• Q2 adjusted EBITDA was $62M (32.3% margin, up 470 bps), and adjusted diluted EPS was $0.82 (up 46%).

• Free cash flow year-to-date reached $104M, with cash, cash equivalents, and investments totaling $268M as of June 30, 2024, and no debt.

• FY 2023 net revenue was $508.7M, up 57% year-over-year; adjusted EBITDA was $107.3M, up 172%.

Outlook and guidance

• Raised 2024 full-year guidance: net revenue $633M–$640M (24–26% growth), gross margin 71%, adjusted EBITDA $142M–$146M, and adjusted EPS $1.71–$1.76.

• Q3 2024 net revenue expected at $115M–$117M (22–24% year-over-year growth), gross margin ~68%, and adjusted EBITDA $21M–$23M.

• 2025 outlook: net revenue growth of 20% and adjusted EBITDA margin of 20%, with significant investments in new brands and ODDITY LABS.

• Outlook incorporates accelerated investments in growth, expected to impact adjusted EBITDA margin in H2 2024.

• FY 2024 guidance was raised twice during the year, reflecting strong business momentum.