Oddity Tech's Q2 2025: Unpacking Contradictions in International Growth, Margins, and Brand Investments

International market growth and focus, gross margin expectations and impact of tariffs, investment in new brands and Oddity Labs, investment in new brands and product launch timing are the key contradictions discussed in Oddity Tech Ltd.'s latest 2025Q2 earnings call.



Revenue and Profitability Growth:
- ODITY grew revenue by 26% to $509 million in the first half of 2025, generating adjusted EBITDA of $122 million and free cash flow of $99 million.
- This growth was driven by strong financial performance across its brands and expansion in online and international markets.

International Market Expansion:
- Sales outside the U.S. grew over 40%, contributing around $85 million, with $75 million from established markets and $10 million from new testing markets.
- The expansion is due to increased focus and investment in international markets, leveraging the demand for beauty products online and a large untapped market.

Brand 3 and New Initiatives:
- Brand 3 is scheduled to launch in Q4, with the company focused on a successful launch to expand into medical-grade products without relying on Brand 3 for 2025 revenue objectives.
- The brand aims to leverage technology and personalization to solve medical problems, targeting a large consumer base with underserved issues and utilizing the existing user base.

Strong Financial Performance and Guidance:
- Adjusted diluted EPS was $0.92, exceeding guidance, with an adjusted EBITDA margin of 28.8%, reflecting strong financial health.
- The company guided for full-year 2025 net revenue between $799 million and $804 million, reiterating confidence in its long-term growth algorithm.