ODDITY Tech Ltd.

Latest Report Overview

Oddity Tech Ltd (ODD) reported Form 20-F for the fiscal year ended December 31, 2025 (Issuer fiscal FY2025), delivering total annual revenue of $739.71 million representing a TTM growth of 5.15% YoY, alongside a robust gross margin of 71.1% and a net profitability margin of 7.0%. The company sustained positive net income for the year of $51.6 million, though recent performance highlights a sharp sequential and year-over-year revenue contraction to $197.94 million (-26.2% YoY) in the most recent quarterly reporting window alongside a diluted EPS loss of -$0.38 per share. Management commentary centered heavily on customer acquisition hurdles stemming from a major algorithm update implemented by its largest advertising partner. This change negatively impacted the cost-efficiency of Oddity's hallmark "Try Before You Buy" customer acquisition funnel, which was down-weighted due to its structurally higher product return rates. Consequently, customer acquisition costs escalated rapidly, prompting the company to initiate remedial advertising redirection measures to steer campaigns toward higher-intent audiences. Looking ahead into fiscal 2026, management expects these elevated customer acquisition costs to persist as a major headwind on results of operations, with the heaviest margin and volume impact expected in the first half of the year. Lower initial customer acquisition volumes are also projected to restrict down-funnel repeat sales velocity over the coming quarters. Oddity is actively diversifying its model through investment in ODDITY LABS, its Boston-based biotechnology center, targeting advanced molecule predictions for beauty and wellness applications.

Key Takeaways for Oddity Tech Ltd

• Oddity Tech Ltd experienced a severe quarterly revenue contraction of -26.2% YoY to $197.94 million, driving a diluted EPS loss of -$0.38 per share due to marketing disruptions [1.1].
• A major algorithm update by the company's largest social media advertising partner directly targeted and down-weighted Oddity's high-return 'Try Before You Buy' model, causing customer acquisition costs to spike.
• Management expects elevated customer acquisition costs and restricted customer growth to materially pressure financial results throughout fiscal 2026, with the most severe impact concentrated in the first half of the year.
• Free cash flow fell deeply negative to -$39.34 million over the trailing twelve months, reflecting deteriorating operational cash generation amid higher advertising cash burn.
• Oddity repurchased $80.04 million of Class A ordinary shares in the latest quarter, following $90.63 million of share buybacks executed in the year-ago comparative quarter.
• The dual-class stock structure concentrates overwhelming voting control with the co-founders, leaving Class A public shareholders with minimal influence over strategic or corporate governance actions.