Oddity Tech Reports Revenue Drop Amid Advertising Algorithm Issues
Oddity Tech Ltd. (NASDAQ:ODD) reported a significant revenue decline in its second quarter, with earnings falling to $181 million from $241 million the previous year—a drop of 25%. Non-GAAP adjusted EBITDA also fell sharply to $13 million compared to $70 million. The company attributed this downturn primarily to an advertising-algorithm issue affecting one of its key brands, IL MAKIAGE. Management expects a modest improvement in Q3 with revenue declining by approximately 5% year over year and adjusted EBITDA between $18 million and $20 million. Efforts are underway to retrain the algorithm in collaboration with Oddity Tech’s largest advertising partner. Other brands, such as SpoiledChild and METHODIQ, showed strong growth potential, suggesting that new brand development could help diversify revenue streams. Despite some positive signs like exceeding EBITDA guidance for Q2, gross margin declined from 72.3% to 68.7%, indicating ongoing challenges in profitability.
Tickers: $ODD
Topics: advertising algorithm issues brand diversification EBITDA performance revenue decline