Oddity Tech Ltd.

Q1 net revenue declined 26% year over year, with first orders down around 50% and repeat orders down around 15%. Gross margin was 69.7%, compressing approximately 520 basis points year over year. Adjusted EBITDA was negative $7 million, adjusted diluted EPS was negative $0.17, and free cash flow was negative $21 million. The company ended Q1 with $667 million of cash, cash equivalents and investments, and $350 million of amended credit facilities remained undrawn. For Q2, management expects net revenue to decline 25% to 30% year over year and adjusted EBITDA to be between $8 million and $10 million. Full-year adjusted EBITDA is expected to be positive.

Oran Holtzman framed the quarter as a technical and algorithmic disruption at the company’s largest advertising partner, not a brand-health problem. He said the team is working closely with the partner and has seen a meaningful improvement in May, while continuing to spend enough to test fixes and recalibrate the system. His tone was defensive but optimistic, repeatedly saying the company believes the issue is solvable and that it wants to return to growth and profitability once CPA normalizes.

Lindsay Mann said the revenue decline was driven mainly by first orders, which fell about 50% because acquisition efficiency deteriorated, while repeat orders fell about 15%. She noted gross margin of 69.7%, adjusted EBITDA of negative $7 million, adjusted diluted EPS of negative $0.17, and free cash flow of negative $21 million. On liquidity and capital allocation, she said the company finished with $667 million of cash, cash equivalents and investments, $350 million of undrawn credit facilities, and about $167 million remaining under the new $200 million buyback authorization after repurchasing approximately 6 million shares for about $82 million.

Analysts focused on the path back to profitability, the cadence of EBITDA through the year, and whether May’s CPA improvement was enough to change the revenue outlook. Management said it did not provide quarterly back-half EBITDA guidance because visibility remains limited, but it still expects full-year adjusted EBITDA to be positive and said CPA is the key leading indicator. They also said lower acquisition spend is deliberate, meant to keep testing and support recovery, and that the Q2 guide assumes CPA remains difficult rather than fully normalizing.