Oddity Tech (ODD) Q2 2026 earnings summary

Executive summary

• Net revenue for Q2 2026 declined 25% year-over-year to $181 million, mainly due to IL MAKIAGE's advertising algorithm dislocation, which sharply increased customer acquisition costs and reduced both first and repeat order revenue.

• SpoiledChild delivered strong growth, on track for at least 35% growth in 2026 and approaching $350 million in net revenue, with robust customer metrics and high repeat rates.

• METHODIQ, launched less than a year ago, is expected to surpass SpoiledChild's first-year revenue, driven by demand for both prescription and non-prescription products, especially in hyperpigmentation, and is showing high customer satisfaction and retention.

• The company is actively working to resolve IL MAKIAGE's ad account issue and expects normalization and a return to growth in 2027.

• Strong liquidity with $561 million in cash, cash equivalents, and investments, and $350 million in undrawn credit facilities as of June 30, 2026.

Financial highlights

• Adjusted EBITDA was $13 million for Q2 2026, ahead of guidance ($8–$10 million), but down year-over-year due to higher CPA and revenue decline at IL MAKIAGE.

• Gross margin was 68.7% in Q2 2026, down from 72.3% last year, mainly due to lower AOV and product mix shift.

• Adjusted diluted EPS was $0.20 for Q2 2026, a 78% decrease year-over-year.

• Free cash flow increased by $14 million in Q2 but was negative $7.5 million for the first half of 2026.

• LTM Q2 2026 net revenue totaled $679 million; LTM adjusted EBITDA was $47 million with a 7% margin.

Outlook and guidance

• Q3 2026 net revenue expected to decline ~5% year-over-year, a sequential improvement from Q2.

• Q3 adjusted EBITDA guidance: $18–$20 million.

• Full-year 2026 net revenue expected to decline ~19% year-over-year, with adjusted EBITDA between $30–$32 million.

• Guidance reflects conservatism due to ongoing uncertainty in ad spend allocation and market volatility.