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Oddity Tech expects third quarter 2023 sales to increase up to 31%


Weirdness Il Makiage

Courtesy: oddity

Weird technology released its preliminary third-quarter results on Monday which showed expected revenue growth of 29% to 31%, driven by repeat sales of its Il Makiage and Spoiled Child brands.

The new public retailer, which began trading on Nasdaq in July and uses artificial intelligence to develop products, previously expected sales growth of around 20.5% in the quarter ended 30 september.

The Tel Aviv-based company did not share its exact revenue for the quarter, but over the last year it had revenue of $68.9 million, told CNBC Chief Financial Officer Lindsay Drucker Mann.

The company also now expects a gross margin of 68.5% for the period, one percentage point higher than its previous forecast of 67.5%, and that margins on its adjusted earnings before interest, taxes and depreciation are at the top of its range. previous range. Oddity now expects an adjusted EBITDA margin of between 21% and 21.5%, compared to its initial guidance of 20% to 21.5%.

Year-to-date, sales have jumped about 58% with adjusted EBITDA of at least $89 million, Oddity said.

“It was a strength across the board, driven by both Il Makiage and Spoiled Child. Ultimately, our recurring revenue was stronger than expected and, more importantly, those sales were very high quality, so they had very strong profitability associated with them,” Drucker Mann said in an interview.

“We have these machine learning models at almost every step of the user journey. They are responsible for the high level of satisfaction, which leads to our high repeat rates, is behind our strong profitability and our strong growth .Without these models, we could never If we could print these results, we would be just another unprofitable (direct-to-consumer) business.”

Oddity is on a mission to disrupt the traditional beauty and wellness industry by using AI to not only select products for customers, but also to develop them. The company often boasts that it does not hire from the traditional beauty industry and instead focuses on recruiting technologists, many of whom come from the Israel Defense Forces’ top technology units.

In April, the company announced plans to acquire biotech startup Revela and open Boston-based Oddity Labs with the goal of making cosmetic products that solve age-old problems like hair loss and wrinkles. The lab is tasked with using AI to create entirely new molecules – a tool commonly used in the pharmaceutical industry to create new drugs, but not widely used in the beauty and health industry -be.

In a statement, CEO Oran Holtzman said Oddity Labs is growing faster than expected and “delivering game-changing ingredient innovations.”

The company expects Oddity Labs to have 10 products ready for market in 2024. Over the next five years, it expects Oddity Labs to generate 30% or more of overall revenue of the company, Drucker Mann said.

When Oddity debuted on the public markets over the summer, it began trading up 35% and saw its stock close at $47.53. Shortly after, it hit a high of $56 per share, but since then, Oddity’s stock has fallen about 50%, with the stock closing at $28.08 on Monday.

Drucker Mann said Oddity’s stock price, as well as that of other recently IPO companies, reflects “the natural ebb and flow of risk sentiment in the early stages of a market rally.” .

“Momentum may be a driver in the short term, but fundamentals drive the long term and our fundamental story is extremely exciting, so we feel really confident,” she said.

cnbc Business

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