Oddity Tech (ODD) Q1 2026 earnings summary

Executive summary

• Q1 2026 net revenue was $197.9 million, a 26% year-over-year decline, but slightly better than the expected 30% drop, mainly due to a technical issue with the largest advertising partner causing abnormally high customer acquisition costs (CPA).

• IL MAKIAGE experienced a severe CPA spike across multiple markets, impacting new customer acquisition and overall unit economics, with some markets seeing CPA double expectations.

• Remediation efforts, including shifting 40% of acquisition revenue from Try Before You Buy to standard buy, showed early signs of improvement, with May marking the first sequential CPA recovery since Q4 2025.

• Methodiq, the new telehealth platform, is performing in line with expectations, targeting $25 million in revenue for 2026 and showing strong initial demand.

• Share buyback program authorized up to $200 million; 6.1 million shares repurchased in Q1 for $82.3 million, reducing outstanding shares by 10.6%.

Financial highlights

• Gross margin declined to 69.7% from 74.9% in Q1 2025, due to product mix and lower AOV.

• Adjusted EBITDA was -$7 million, reflecting high CPA and continued investment in growth initiatives.

• Adjusted diluted EPS was -$0.17; free cash flow was -$21.1 million.

• Net loss was $(21.4) million compared to net income of $37.8 million in Q1 2025.

• Ended Q1 with $667 million in cash and equivalents; $350 million credit facility remains undrawn.

Outlook and guidance

• Full-year adjusted EBITDA expected to be positive, but visibility on other P&L items remains limited.

• Q2 2026 net revenue expected to decline 25%-30% year-over-year; adjusted EBITDA guidance is $8-$10 million.

• Recovery initiatives are ongoing, with normalization targeted for the second half of 2026.