ODDITY Tech Ltd (ODD, Financial) has reported its preliminary third quarter results for 2023, revealing a record-breaking quarter that exceeded the company's guidance issued in August. The company's net revenues, gross margin, and adjusted EBITDA margin all surpassed expectations. The company's strong performance is attributed to the strength of its business model, the power of its technology-based platform, the health of its brands, and the massive growth opportunities ahead.
Financial Highlights
ODDITY's preliminary third quarter results indicate that the company's revenue is growing faster, gross margins are higher, and adjusted EBITDA is better than expected. Despite efforts to pace growth and slow down, the company has delivered net revenue growth of at least 58% and adjusted EBITDA of $89 million for the first nine months of the year. The company's financial performance reflects the strength of its model, the power of its technology-based platform, the health of its brands, and the massive runway it has ahead.
Investments in Technology and Data
ODDITY's large investments in technology and data capabilities over the past five years have enabled the company to continue to grow fast without damaging its high margins and profitability. The company uses machine learning models across a wide range of use cases that support the user, from marketing engines to product recommendation engines. The company also uses computer vision technology to provide another dimension of information, which allows it to rapidly expand its capabilities with a lower amount of data needed for its machine learning models.
Brand Performance
ODDITY's brands, IL MAKIAGE and SpoiledChild, have shown significant growth potential. Both brands are still very young, with a ton of growth potential to unlock. The company also spends time on building future brands. The company operates in a massive and growing global Total Addressable Market (TAM), with a wide range of product categories and pain points for it to go after. The company focuses on areas that its over 40 million users crave and where its data shows huge potential demand.
Future Growth
Looking to the future, ODDITY will continue to add brands to its platform where it sees large TAM, huge pain points coming from its user base, and where economics can support strong profitability and returns on capital. The company has two future brands already in development that it plans to launch in 2025, and it is incredibly bullish on their opportunity. The company is committed to its long-term plan to sustain revenue growth of at least 20% and EBITDA margins of at least 20%.
