- Record full year net revenue of $509 million, up 57% from year ago
- Record net income of $59 million, up 169% from year ago, and record adjusted net income of $77 million, up 181% from year ago
- Record adjusted EBITDA of
$107 million , up 172% from year ago - Record
$85 million of free cash flow generation
“Our fourth quarter delivered an outstanding finish to a record breaking year. We continued to deliver as promised. We achieved net revenue growth of 57% with adjusted EBITDA of
“I truly believe there is no limit to what we can build at ODDITY. We are playing in a huge TAM that is being transformed,” Holtzman continued. “And we have positioned our business to lead in two pillars of this transformation. First, the consumer shift online, where we believe we are already the largest direct-to-consumer platform in the market. Second, the shift to science-backed, NEW high-performance products, where we are ALL-IN, building the industry’s largest and most advanced platform for new molecule discovery. If we do it right, ODDITY LABS will change our industry and our company.”
ODDITY achieved a number of objectives in the past year, supporting strong financial performance today and positioning the business for the future. These include:
- Exceeding guidance for financial results for the fourth quarter and the full year ended
December 31, 2023 . - Crossing the
$500 million milestone of net revenue. - Crossing the
$100 million milestone of adjusted EBITDA. - Crossing the 50 million milestone of platform users.
- Establishing ODDITY LABS as the industry’s leading molecule discovery platform, powered by our acquisition and integration of Revela.
- Successful completion of our IPO.
- Strong balance sheet, including
$168 million of cash, cash equivalents, and investments, with no outstanding debt, as ofDecember 31, 2023 , and the addition of a$100 million credit facility.
“We are pleased with our financial results for the quarter and full year, which beat our guidance across revenue, adjusted EBITDA, and adjusted EPS. Our topline growth translated into strong free cash generation, with
Fourth Quarter Fiscal 2023 Financial Highlights1:
Results for the fourth quarter ended
- Net revenue was
$97 million compared to$67 million in the fourth quarter of 2022, representing a 44% year-over-year increase. - Gross profit was
$67 million compared to$44 million in the fourth quarter of 2022, representing a 53% year-over-year increase. Gross margin was 69.4%, increasing by 400 bps versus gross margin of 65.4% in the fourth quarter of 2022. - Net income was
$5.1 million compared to net loss of$0.7 million in the fourth quarter of 2022. Net income margin was 5.3% compared to -1.0% in the fourth quarter of 2022. - Adjusted net income was
$10.4 million compared to$0.6 million in the fourth quarter of 2022, representing a 1,700% year-over-year increase. Adjusted net income margin was 10.7% compared to 0.9% in the fourth quarter of 2022. - Adjusted EBITDA was
$16.3 million compared to$2.6 million in the fourth quarter of 2022, representing a 520% increase. Adjusted EBITDA margin was 16.8%, increasing by 1,290 bps versus adjusted EBITDA margin of 3.9% in the fourth quarter of 2022. - The weighted average number of outstanding shares used in computing our basic earnings per share (“EPS”) was 56.9 million and 53.4 million for the fourth quarter of 2023 and 2022, respectively. The weighted average number of outstanding shares used in computing our diluted EPS and adjusted diluted EPS was 60.9 million and 53.4 million for the fourth quarter of 2023 and 2022, respectively.
- Diluted EPS were
$0.08 compared to diluted loss per share of$0.01 in the fourth quarter of 2022. Adjusted diluted EPS were$0.17 compared to$0.01 in the fourth quarter of 2022. - Cash and cash equivalents, restricted cash, short-term deposits and marketable securities were
$168 million , with no outstanding debt as ofDecember 31, 2023 .
The tables below set forth our actual results for the three months and full year ended
Three months ended December 31, 2023 | |||
Actual Results | Guidance Low End | Guidance High End | |
Net Revenue Growth | 44.1% | 22.0% | 26.0% |
Gross Margin | 69.4% | 66.0% | 66.0% |
Adjusted EBITDA Margin | 16.8% | 15.5% | 16.5% |
Adjusted Diluted EPS |
Year ended December 31, 2023 | |||
Actual Results | Guidance Low End | Guidance High End | |
Net Revenue Growth | 56.7% | 52.0% | 53.0% |
Gross Margin | 70.4% | 70.0% | 70.0% |
Adjusted EBITDA Margin | 21.1% | 21.0% | 21.0% |
Adjusted Diluted EPS |
Key initiatives for 2024
ODDITY is focused on key initiatives to support strong financial results in 2024; leveraging its platform model for future growth through new brands, products, and addressable markets; and strengthening its competitive position. These include:
- Delivering continued profitable growth in our existing brand portfolio across categories and markets.
- Accelerating our investment in ODDITY LABS by expanding the team and the scope of projects in development.
- Brand 3, a medical-grade skin and body brand, planned to launch in 2025.
- Brand 4, planned to launch in 2025.
Financial outlook
ODDITY expects to deliver 2024 financials ahead of its long-term growth algorithm of 20%-plus revenue growth and 20%-plus adjusted EBITDA margin. ODDITY is providing the following guidance for the full year ending
- Net revenue between
$620 million and$630 million , representing year-over-year growth between 22% and 24%. - Gross margins of approximately 70.5%.
- Adjusted EBITDA between
$136 million and$140 million . - Adjusted diluted EPS between
$1.49 and$1.54 . This assumes a tax rate of approximately 25.0% and average fully diluted shares of approximately 64.5 million.
FY2023 Actuals | FY2024 Outlook | |
Net Revenue | ||
Gross Margin | 70.4% | 70.5% |
Adjusted EBITDA | ||
Adjusted Diluted EPS |
ODDITY is providing the following guidance for the first quarter ending
- Net revenue between
$204 million and$207 million , representing year-over-year growth between 23% and 25%. - Gross margin of approximately 71.0%.
- Adjusted EBITDA between
$43 million and$45 million . - Adjusted diluted EPS between
$0.47 and$0.50 . This assumes a tax rate of approximately 25.0% and average fully diluted shares of approximately 63 million.
1Q 2024 Outlook | |
Net Revenue | |
Gross Margin | 71.0% |
Adjusted EBITDA | |
Adjusted Diluted EPS |
Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income, Adjusted net income margin and Adjusted diluted EPS are non-GAAP financial measures. Please see the sections titled “Non GAAP Financial Measures” and “Reconciliations of GAAP to Non-GAAP Measures” below for more information regarding ODDITY’s use of non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures. ODDITY has not provided a quantitative reconciliation of its Adjusted EBITDA and Adjusted diluted EPS outlook to the corresponding net income and diluted EPS GAAP measures, because the quantification of certain items included in the calculation of GAAP net income and GAAP diluted EPS cannot be calculated or predicted at this time without unreasonable efforts. ODDITY is unable to address the probable significance of the unavailable reconciling items, which could have a potentially unpredictable, and potentially significant, impact on its future GAAP financial results.
The financial outlook figures presented above are forward-looking statements that are subject to a variety of assumptions and estimates. Actual results may differ materially from ODDITY’s financial outlook as a result of, among other things, the factors described under “Forward-Looking Statements” below.
Conference Call Details:
A conference call to discuss ODDITY’s Q4 2023 financial and business results and outlook is scheduled for tomorrow,
Non-GAAP Financial Measures:
In addition to the GAAP financial measures set forth in this press release, ODDITY has included the following non-GAAP financial measures: Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income, Adjusted net income margin and Adjusted diluted EPS. ODDITY believes these non-GAAP financial measures provide useful supplemental information to management and investors to help evaluate ODDITY’s business, measure its performance, identify trends, prepare financial projections and make business decisions.
ODDITY defines “Adjusted EBITDA” as net income before financial expenses (income), net, taxes on income, and depreciation and amortization as further adjusted to exclude share-based compensation expense and non-recurring items. “Adjusted EBITDA margin” is defined as Adjusted EBITDA divided by net revenue. ODDITY believes Adjusted EBITDA and Adjusted EBITDA margin are useful for financial and operational decision-making and as a means to evaluate period-to-period comparisons. By excluding certain items that may not be indicative of its recurring core operating results, ODDITY believes that Adjusted EBITDA and Adjusted EBITDA margin provide meaningful supplemental information regarding its performance. In addition, Adjusted EBITDA and Adjusted EBITDA margin are widely used by investors and securities analysts to measure a company’s operating performance without regard to items such as depreciation and amortization, interest expense, and interest income, which can vary substantially from company to company depending on their financing and capital structures and the method by which their assets were acquired.
ODDITY defines “Adjusted net income” as net income adjusted for the impact of share-based compensation, non-recurring items and the tax effect of non-GAAP adjustments and “Adjusted net income margin” as Adjusted net income divided by net revenue. In addition, ODDITY defines “Adjusted diluted earnings per share” as Adjusted net income divided by diluted shares outstanding. ODDITY believes the presentations of Adjusted net income, Adjusted net income margin, and Adjusted diluted earnings per share are useful because they are frequently used by analysts, investors and other interested parties to evaluate companies in our industry. Further, ODDITY believes these measures are helpful in highlighting trends in our operating results, because they exclude the impact of items that are outside the control of management or not reflective of our ongoing operations and performance.
ODDITY’s non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, its financial results prepared in accordance with
Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included with the financial tables at the end of this release under the heading “Reconciliations of GAAP to Non-GAAP Measures.”
Forward-Looking Statements:
Certain statements in this press release may constitute “forward-looking” statements and information, within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the safe harbor provisions of the
About ODDITY:
ODDITY is a consumer tech company that builds and scales digital-first brands to disrupt the offline-dominated beauty and wellness industries. The company serves approximately 50 million users with its AI-driven online platform, deploying data science to identify consumer needs, and developing solutions in the form of beauty and wellness products. ODDITY owns IL MAKIAGE and SpoiledChild. The company operates with business headquarters in
Contacts:
Press:
michaelb@oddity.com
Investor:
investors@oddity.com
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
Three months ended December 31, | Year ended December 31, | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
(Unaudited) | (Unaudited) | (Audited) | |||||||||||||
Net revenue | $ | 97,246 | $ | 67,499 | $ | 508,685 | $ | 324,520 | |||||||
Cost of revenue | 29,761 | 23,369 | 150,456 | 106,470 | |||||||||||
Gross profit | 67,485 | 44,130 | 358,229 | 218,050 | |||||||||||
Selling, general and administrative | 61,033 | 44,272 | 283,911 | 190,385 | |||||||||||
Operating income (loss) | 6,452 | (142 | ) | 74,318 | 27,665 | ||||||||||
Financial expenses (income), net | (1,400 | ) | 301 | (4,283 | ) | (1,247 | ) | ||||||||
Income (loss) before taxes on income | 7,852 | (443 | ) | 78,601 | 28,912 | ||||||||||
Taxes on income | 2,739 | 217 | 20,067 | 7,184 | |||||||||||
Net income (loss) | $ | 5,113 | $ | (660 | ) | $ | 58,534 | $ | 21,728 | ||||||
Basic earnings per share | $ | 0.09 | $ | (0.01 | ) | $ | 1.06 | $ | 0.41 | ||||||
Diluted earnings per share | $ | 0.08 | $ | (0.01 | ) | $ | 1.00 | $ | 0.39 |
CONSOLIDATED BALANCE SHEETS | |||||||
2023 | 2022 | ||||||
ASSETS | (Unaudited) | (Audited) | |||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 36,538 | $ | 40,955 | |||
Short-term deposits | 78,000 | 18,000 | |||||
Marketable securities | 1,108 | - | |||||
Trade receivables | 9,916 | 7,576 | |||||
Inventories | 84,106 | 70,230 | |||||
Prepaid expenses and other current assets | 14,144 | 9,172 | |||||
Total current assets | 223,812 | 145,933 | |||||
LONG-TERM ASSETS: | |||||||
Marketable securities | 50,507 | - | |||||
Property, plant and equipment, net | 9,245 | 9,468 | |||||
Deferred tax asset, net | 3,924 | 2,334 | |||||
Intangible assets, net | 36,001 | 26,800 | |||||
64,904 | 16,237 | ||||||
Operating lease right-of-use assets | 13,557 | 13,278 | |||||
Other assets | 2,956 | 2,358 | |||||
Total long-term assets | 181,094 | 70,475 | |||||
Total assets | $ | 404,906 | $ | 216,408 |
CONSOLIDATED BALANCE SHEETS | |||||||
2023 | 2022 | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | (Unaudited) | (Audited) | |||||
CURRENT LIABILITIES: | |||||||
Trade payables | $ | 56,185 | $ | 44,807 | |||
Other accounts payable and accrued expenses | 49,325 | 37,792 | |||||
Short-term debt and current maturities of long-term debt | - | 3,917 | |||||
Operating lease liabilities, current | 3,802 | 3,890 | |||||
Total current liabilities | 109,312 | 90,406 | |||||
LONG-TERM LIABILITIES: | |||||||
Operating lease liabilities, non-current | 8,712 | 8,076 | |||||
Digital securities liability | - | 648 | |||||
Other long-term liabilities | 3,775 | 6,298 | |||||
Total liabilities | 121,799 | 105,428 | |||||
COMMITMENTS AND CONTINGENCIES | |||||||
Redeemable A shares | - | 12,275 | |||||
SHAREHOLDERS' EQUITY: | |||||||
Class A Ordinary shares | 14 | 12 | |||||
Class | 3 | 4 | |||||
Additional paid-in capital | 178,910 | 53,707 | |||||
Accumulated other comprehensive income | 2,402 | 1,738 | |||||
Retained earnings | 101,778 | 43,244 | |||||
Total shareholders' equity | 283,107 | 98,705 | |||||
Total liabilities and shareholders' equity | $ | 404,906 | $ | 216,408 |
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
Year ended | |||||||
2023 | 2022 | ||||||
Cash flows from operating activities: | (Unaudited) | (Audited) | |||||
Net income | $ | 58,534 | $ | 21,728 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 8,605 | 4,408 | |||||
Share-based compensation | 24,111 | 6,697 | |||||
Accretion of discount of marketable securities | (547 | ) | - | ||||
Deferred income taxes | (1,256 | ) | (1,515 | ) | |||
Increase in trade receivables | (2,340 | ) | (2,435 | ) | |||
Increase in prepaid expenses and other receivables | (4,299 | ) | (1,802 | ) | |||
Increase in inventories | (13,599 | ) | (18,773 | ) | |||
Increase in trade payables | 9,278 | 7,788 | |||||
Increase in other accounts payable and accrued expenses | 8,654 | 23,651 | |||||
Change in operating lease right-of-use assets | 4,618 | 5,009 | |||||
Change in operating lease liability | (4,349 | ) | (6,321 | ) | |||
Other | 45 | 597 | |||||
Net cash provided by operating activities | 87,455 | 39,032 | |||||
Cash flows from investing activities: | |||||||
Purchase of property, plant and equipment | (2,101 | ) | (2,347 | ) | |||
Capitalization of software development costs | (3,518 | ) | (5,051 | ) | |||
Investment in marketable securities | (50,012 | ) | - | ||||
Investment in short-term deposits | (60,000 | ) | (18,000 | ) | |||
Acquisition of a business, net of cash acquired | (23,173 | ) | - | ||||
Other investing activities | (1,187 | ) | (382 | ) | |||
Net cash used in investing activities | (139,991 | ) | (25,780 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from Initial Public Offering, net of issuance costs | 53,006 | (607 | ) | ||||
Proceeds from issuance of digital securities | - | 648 | |||||
Proceeds from exercise of options | 1,747 | 75 | |||||
Repayment of loans and borrowings | (4,313 | ) | (362 | ) | |||
Other financing activities | (1,629 | ) | - | ||||
Net cash provided by (used in) financing activities | 48,811 | (246 | ) | ||||
Effect of exchange rate fluctuations on cash and cash equivalents | (623 | ) | (781 | ) | |||
Net (decrease) increase in cash, cash equivalents and restricted cash | (4,348 | ) | 12,225 | ||||
Cash, cash equivalents and restricted cash at the beginning of the period | 43,114 | 30,889 | |||||
Cash, cash equivalents and restricted cash at the end of the period | $ | 38,766 | $ | 43,114 |
Reconciliation of GAAP to Non-GAAP Financial Information | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||
Reconciliation of Net Income and Adjusted EBITDA | |||||||||||||||
Net Income (loss) | $ | 5,113 | $ | (660 | ) | $ | 58,534 | $ | 21,728 | ||||||
Financial (income) expenses, net | (1,400 | ) | 301 | (4,283 | ) | (1,247 | ) | ||||||||
Taxes on Income | 2,739 | 217 | 20,067 | 7,184 | |||||||||||
Depreciation and amortization | 2,371 | 1,098 | 8,605 | 4,408 | |||||||||||
Share-based compensation | 7,507 | 1,678 | 24,111 | 6,697 | |||||||||||
Non-recurring adjustments | - | - | 300 | 701 | |||||||||||
Adjusted EBITDA | $ | 16,330 | $ | 2,634 | $ | 107,334 | $ | 39,471 | |||||||
Reconciliation of Net Income and Adjusted Net Income | |||||||||||||||
Net Income | $ | 5,113 | $ | (660 | ) | $ | 58,534 | $ | 21,728 | ||||||
Share-based compensation | 7,507 | 1,678 | 24,111 | 6,697 | |||||||||||
Non-recurring adjustments | - | - | 300 | 701 | |||||||||||
Tax impact | (2,220 | ) | (440 | ) | (6,232 | ) | (1,828 | ) | |||||||
Adjusted Net Income | $ | 10,400 | $ | 578 | $ | 76,713 | $ | 27,298 | |||||||
Diluted earnings per share | $ | 0.08 | $ | (0.01 | ) | $ | 1.00 | $ | 0.39 | ||||||
Adjusted diluted earnings per share | $ | 0.17 | $ | 0.01 | $ | 1.31 | $ | 0.48 |
Reconciliation of net cash provided by operating activities to free cash flow | |||||||
Year Ended | |||||||
2023 | 2022 | ||||||
(Unaudited) | |||||||
Net operating cash flow | $ | 87,455 | $ | 39,032 | |||
Purchase of property and equipment | (2,101 | ) | (2,347 | ) | |||
Free cash flow | $ | 85,354 | $ | 36,685 | |||
_____________________________________
1 Results greater than
Source:
2024 GlobeNewswire, Inc., source