Oddity Tech Beats Q4 & FY 2025 Earnings, But Forecasts 30% Q1 2026 Revenue Decline Due to Ad Costs

summarizeSummary

Oddity Tech exceeded Q4 and full-year 2025 financial guidance but issued a significantly negative Q1 2026 revenue forecast, projecting a 30% year-over-year decline due to increased advertising costs, despite maintaining a strong cash position and an active share buyback program.

check_boxKey Events

• Exceeded Q4 & Full Year 2025 Financial Guidance

  Oddity Tech reported Q4 2025 net revenue of $153 million (up 24% YoY) and full-year net revenue of $810 million (up 25% YoY), beating its own guidance across revenue, gross margin, adjusted EBITDA, and adjusted diluted EPS for both periods.

• Significant Q1 2026 Revenue Decline Forecast

  The company expects first quarter 2026 revenue to decline approximately 30% year-over-year, a substantial reduction driven by operational challenges.

• Increased User Acquisition Costs Identified as Headwind

  The Q1 2026 revenue forecast is primarily due to a 'dislocation' with its largest advertising partner, resulting in significant increases in new user acquisition costs from algorithm changes. Management anticipates improvement in H2 2026.

• Share Buyback Program Continues

  Oddity Tech has $103 million remaining on its previously announced $150 million share repurchase authorization, which expires on June 30, 2027.

auto_awesomeAnalysis

Oddity Tech reported strong financial results for the fourth quarter and full year 2025, exceeding its own guidance across all key metrics including revenue, gross margin, adjusted EBITDA, and adjusted diluted EPS. However, the company issued a significantly negative outlook for the first quarter of 2026, forecasting a 30% year-over-year revenue decline. This anticipated decline is attributed to a 'dislocation' with its largest advertising partner, leading to abnormally high new user acquisition costs due to algorithm changes. Management believes the root cause has been identified and expects material improvement in the second half of 2026, with acquisition costs returning to normal levels in Q3 or Q4. This substantial forward guidance cut, especially as the stock trades near its 52-week low, is a critical market-moving event. The company also highlighted a strong cash position of $776 million and confirmed the previously announced $350 million expanded credit facility secured in January 2026. A $103 million authorization remains on its share buyback program, signaling continued intent to return capital to shareholders.