ODDITY Q2 Earnings & Sales Beat Estimates, DTC Sales Rise Y/Y

ODDITY Tech Ltd. ODD reported impressive second-quarter 2025 results, wherein both net sales and earnings surpassed the Zacks Consensus Estimate. Also, the top and bottom lines increased year over year. Also, direct-to-consumer (DTC) sales improved year over year.

Backed by robust top-line growth, expanding innovation investments and a strong liquidity position, ODDITY raised its full-year outlook. The company’s ongoing strategy to disrupt the beauty and wellness space through technology, product development and data science-driven personalization supported yet another quarter of double-digit growth and high profitability.

More on ODD’s Q2 Results

ODDITY reported adjusted earnings per share (EPS) of 92 cents, beating the Zacks Consensus Estimate of 88 cents. Also, the bottom line increased 12.2% from the year-ago quarter’s reported figure.

Net sales totaled $241.1 million, which surpassed the Zacks Consensus Estimate of $239 million and increased 25.1% from $192.8 million in the prior-year quarter. 

The rise was driven by a strong digital performance, with online DTC sales increasing 29.6% to $235.2 million from $181.5 million a year ago. This represented 98% of total sales, up from 94% in the prior year. Sales from other sources, which include Israeli retail and marketing affiliates, declined 47.1% to $5.98 million from $11.3 million, contributing just 2% of total sales versus 6% in the prior-year period.

ODDITY’s Margin & Cost Details

Gross profit was $174.4 million, up 25.3% from $139.1 million last year. We note that the gross margin increased 10 basis points year over year to 72.3% in the quarter under review.

Selling, general and administrative (SG&A) expenses for the quarter were $117.3 million, rising 36.3% from $86.1 million in the prior-year period. SG&A expenses, as a percentage of net sales, rose 200 basis points year over year to 48.6%.

Operating income for the quarter was $57.1 million, up 7.6% year over year, whereas the operating margin declined 380 basis points year over year to 23.7% in the second quarter.

Adjusted EBITDA came in at $69.5 million, a 11.6% increase from $62.3 million in the year-ago period. The adjusted EBITDA margin stood at 28.8%, down 350 basis points from 32.3% in the prior-year period.

ODD Stock Past 3-Month Performance

ODD’s Financial Health Snapshot

As of June 30, 2025, ODD’s cash and cash equivalents were $656.8 million, with no long-term debt and shareholders' equity of $351.2 million. The operating cash flow as of the second quarter was $101.4 million and the free cash flow was $99.4 million.

ODDITY’s Strategic & Operational Highlights

ODD reached several milestones in the second quarter, reinforcing the strength of its business model and future growth trajectory.

Core brands IL MAKIAGE and SpoiledChild delivered double-digit online sales growth, supported by robust consumer engagement and personalization through ODDITY’s AI-driven direct-to-consumer platform. The company also accelerated its international expansion, tapping into new geographic markets to broaden its global footprint.

Progress continued on the development and commercialization of brand launches. Brand 3, which targets the medical-grade dermatology segment, remains on track for a formal launch in the fourth quarter of 2025, marking ODDITY’s entry into the healthcare space. Meanwhile, Brand 4 is progressing as planned and is expected to launch in 2026.

Further investments were made into ODDITY Labs, the company’s proprietary biotech and molecule discovery platform, which is the key to driving product innovation across current and future brands. In support of these strategic initiatives, ODDITY completed its first-ever exchangeable note offering, raising $600 million with a 0% coupon, underscoring investor confidence in its long-term strategy.

What to Expect From ODD in Q3 & FY25?

Given the strong second-quarter performance and high order visibility, ODDITY has raised its 2025 guidance. The company expects net sales between $799 million and $804 million, indicating 23-24% year-over-year growth, up from the previously mentioned $790-$798 million. The gross margin is expected to be 71%.

Adjusted EBITDA is forecast between $160 million and $162 million compared with the prior mentioned $157-$161 million. Adjusted EPS is projected between $2.06 and $2.09, up from the earlier stated $1.99-$2.04. 

For the third quarter of 2025, the company expects net sales between $144 million and $146 million, implying year-over-year growth of 21-23%. The gross margin is expected to be 68%, whereas adjusted EBITDA is forecast between $26 million and $28 million. Adjusted EPS is expected to be 33-36 cents.

Shares of this Zacks Rank #2 (Buy) company have gained 12.7% in the past three months compared with the industry’s growth of 20.7%.

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