Oddity Tech Ltd. (NASDAQ: ODD) reported second-quarter revenue of $180.5 million, a 25% drop from $241.1 million a year earlier, as the Israeli beauty and wellness company grappled with disruptions to its advertising channels.
Adjusted EBITDA fell 81% to $12.9 million from $69.5 million, compressing the margin by 2,170 basis points to 7.1%. Adjusted diluted EPS dropped 78% to $0.20 from $0.92. Gross margin declined 360 basis points to 68.7% from 72.3%.
The company's first-half results were similarly severe. Revenue of $378.5 million, down 26% from $509.2 million, was accompanied by adjusted EBITDA collapsing 95% to $5.8 million from $121.9 million. Adjusted EPS fell 99% to $0.02. H1 GAAP net loss was $8.5 million.
Free cash flow posted a $14 million inflow in the second quarter alone, partially offsetting negative $8 million for the first half. Trailing-twelve-month free cash flow was negative $23 million against LTM revenue of $679 million.
Cash, cash equivalents and investments stood at $561 million as of June 30. Oddity also repurchased 5.6 million shares for $80 million during the quarter.
CEO Oran Holtzman said, "We believe that once we solve the problem, we plan to continue to go back to growth with IL MAKIAGE," the company's flagship makeup brand. Oddity also operates SpoiledChild, a younger-skewing beauty brand, and METHODIQ, a medical-grade skincare line.
On the bright side, SpoiledChild is tracking toward $350 million in revenue for 2026, with expected growth of at least 35%. METHODIQ is projected to exceed SpoiledChild's first-year performance, according to the company's slides.
For guidance, Oddity expects Q3 2026 revenue to decline approximately 5% year-over-year. Full-year revenue is projected to fall about 19%, with adjusted EBITDA between $30 million and $32 million.
Shares surged more than 33% in premarket trading to $17.26 after the report, recovering sharply from the previous session's close of $13.03, well below the 52-week high of $64.23.
