Waldencast (WALD) Q1 2025 earnings summary

Executive summary

• Q1 2025 net revenue was $65.4 million, down 4.1% year-over-year, with adjusted gross profit margin of 76.4% and adjusted EBITDA of $4.4 million (6.7% margin), reflecting a 61.5% decline from Q1 2024.

• Net loss widened to $20.7 million, impacted by non-recurring legal, advisory, and restructuring costs.

• Milk Makeup saw strong U.S. retail sales growth, offset by international contraction and inventory reductions.

• Obagi Medical net revenue grew 7.1% year-over-year to $36.2 million, with solid direct-to-consumer growth despite supply chain constraints.

• Continued investment in brand innovation, expanded distribution, and increased marketing to drive future growth.

Financial highlights

• Net revenue declined 4.1% year-over-year to $65.4 million, with adjusted gross profit of $50.0 million (76.4% margin), up 10 basis points from Q1 2024.

• Adjusted EBITDA was $4.4 million (6.7% margin), down from $11.4 million (16.6%) in Q1 2024.

• Net loss margin was 31.7% of net revenue, compared to 5.7% in Q1 2024.

• Cash position at quarter-end was $10.8 million, with $22.5 million available on a new revolving credit facility.

• Net debt increased to $172.1 million, primarily due to debt refinancing extending maturity to March 2030.

Outlook and guidance

• Targeting full-year net revenue growth in the mid-teens and adjusted EBITDA margin in the mid to high-teens.

• Growth expected from Milk Makeup’s expanded US distribution, improved Obagi Medical fulfillment, and continued innovation.

• Guidance reflects a low single-digit percentage increase in cost of goods sold due to tariffs, with mitigation strategies in place.

• Limited impact expected from tariff changes due to high gross margin model and low reliance on Asian sourcing.