Oddity Tech Ltd (ODD) 2023 Q2 法說會逐字稿

Good afternoon, and welcome to ODDITY's second-quarter 2023 earnings conference call. At this time, I'd like to turn the conference over to [Maria Liporis], Investor Relations for ODDITY. Thank you. You may begin.

下午好，歡迎參加 ODDITY 2023 年第二季度收益電話會議。這次，我想將會議轉交給 ODDITY 投資者關係部門的 [Maria Liporis]。謝謝。你可以開始了。

Thank you, operator. I'm joined by Oran Holtzman, ODDITY Co-Founder and CEO: and Lindsay Drucker Mann, ODDITY's Global CFO. As a reminder, due to the timing of this earnings call which is within the 25-day quiet period following the company's IPO, we will not be taking questions on today's call.

謝謝你，接線員。 ODDITY 聯合創始人兼首席執行官 Oran Holtzman 和 ODDITY 全球首席財務官 Lindsay Drucker Mann 也加入了我的行列。提醒一下，由於本次財報電話會議的召開時間是在公司 IPO 後的 25 天靜默期內，因此我們不會在今天的電話會議上回答問題。

Management's remarks on this call that do not concern past events are forward-looking statements. These may include predictions, expectations or estimates, including statements about ODDITY's business strategy, market opportunity, future financial performance, and potential long-term success. Forward-looking statements involve risks and uncertainties, and actual results could differ materially due to a variety of factors. These factors are described under forward-looking statements in our earnings press release and in our prospectus filed with the Securities and Exchange Commission on July 18, 2023.

管理層在本次電話會議上發表的與過去事件無關的言論屬於前瞻性陳述。這些可能包括預測、期望或估計，包括有關 ODDITY 業務戰略、市場機會、未來財務業績和潛在長期成功的陳述。前瞻性陳述涉及風險和不確定性，實際結果可能因多種因素而存在重大差異。這些因素在我們的收益新聞稿和 2023 年 7 月 18 日向美國證券交易委員會提交的招股說明書中的前瞻性陳述中進行了描述。

We do not undertake any obligation to update forward-looking statements, which speak only as of today. Finally, during this call, we will discuss certain non-GAAP financial measures, which we believe are useful supplemental measures for understanding our business. Definitions and reconciliations of these non-GAAP financial measures to their most comparable GAAP measures are included in our earnings press release we issued today.

我們不承擔任何更新前瞻性陳述的義務，這些陳述僅代表今天的情況。最後，在本次電話會議中，我們將討論某些非公認會計準則財務指標，我們認為這些指標對於了解我們的業務是有用的補充指標。這些非公認會計原則財務指標與其最具可比性的公認會計原則指標的定義和調節已包含在我們今天發布的收益新聞稿中。

I will now hand the call over to Oran.

我現在將電話轉交給奧蘭。

Thank you, everyone, for joining us today. We are very excited to show second-quarter results in our first earnings call as a public company. And it's only fitting that we kicked off our life as a public company with an outstanding quarter of financial performance that positioned us to raise our 2023 outlook for revenue and profit above our plan.

謝謝大家今天加入我們。我們非常高興能夠在作為上市公司的第一次財報電話會議上展示第二季度的業績。我們以出色的季度財務業績開啟了上市公司的人生，這使我們能夠將 2023 年的收入和利潤前景提高到高於計劃的水平，這是再合適不過的了。

We generated $151 million of net revenue, a 55% increase from last year. And $42 million of adjusted EBITDA in the second quarter, representing 27.6% of adjusted EBITDA margin. These results are above the estimate we issued in our IPO across every metric including sales, adjusted EBITDA, and net income. We are making very strong progress in our mission to transform the global beauty and wellness market with technology and entrepreneurial DNA, and we are here to build something huge.

我們實現了 1.51 億美元的淨收入，比去年增長了 55%。第二季度調整後 EBITDA 為 4200 萬美元，佔調整後 EBITDA 利潤率的 27.6%。這些結果高於我們在 IPO 中發布的各項指標（包括銷售額、調整後 EBITDA 和淨利潤）的估計。我們在利用技術和創業基因改變全球美容和健康市場的使命中取得了巨大進展，我們在這裡要創造一些偉大的東西。

Our technology-powered platform is unlocking online for massive and super-attractive TAM by leveraging data science, artificial intelligence, computer vision, and now, biotech to deliver superior products and experiences to our more than 40 million users. Our model has rapidly scaled to what we believe is the largest and most profitable online direct-to-consumer platform in the industry. With our existing powerhouse brands IL MAKIAGE and SpoiledChild today and brands three and four in development to launch in the future.

我們的技術驅動平台通過利用數據科學、人工智能、計算機視覺以及現在的生物技術，在線解鎖大規模且極具吸引力的 TAM，為我們超過 4000 萬用戶提供卓越的產品和體驗。我們的模式已迅速擴展到我們認為業內最大、最賺錢的在線直接面向消費者的平台。目前我們現有的強大品牌 IL MAKIAGE 和 SpoiledChild 以及正在開發中的品牌 3 和 4 將於未來推出。

In order to perform successfully online only, we are investing heavily in data science and technology early on and built our tech team to be the large team in the company. Technology continues to be the primary investment priority for us today, although we believe we are already way ahead of our competitors. We achieved many important milestones during the second quarter that we believe set us up for a long runway of top- and bottom-line growth.

為了僅在線上取得成功，我們很早就在數據科學和技術上進行了大量投資，並將我們的技術團隊打造為公司的大型團隊。儘管我們相信我們已經遠遠領先於競爭對手，但技術仍然是當今我們的首要投資重點。我們在第二季度實現了許多重要的里程碑，我們相信這些里程碑為我們的營收和利潤增長奠定了基礎。

First, we made significant progress in the quarter which include driving revenue growth and market share gains for our IL MAKIAGE and SpoiledChild brands, extending our existing brands into new categories, and continuing to develop new brands tailored for our user base which will be connected to the ODDITY-D2C platform. Second, the acquisition of Revela and launch ODDITY Labs was a game-changing achievement for us during this quarter. We moved aggressively to use pharma-grade AI technology to boost the development and expansion of proprietary science-backed molecules and product formulations.

首先，我們在本季度取得了重大進展，包括推動IL MAKIAGE 和SpoiledChild 品牌的收入增長和市場份額增長，將我們現有的品牌擴展到新的類別，以及繼續開發為我們的用戶群量身定制的新品牌，這些品牌將與ODDITY-D2C 平台。其次，收購 Revela 並推出 ODDITY Labs 對我們來說是本季度一項改變遊戲規則的成就。我們積極採取行動，使用醫藥級人工智能技術來促進專有科學支持的分子和產品配方的開發和擴展。

We believe ODDITY Labs will change the industry and will be a massive driver for ODDITY as a company. And finally, with the successful completion of our IPO, we recruited best-in-class investor partners to join us building a truly transformational business that compound long-term volume.

我們相信 ODDITY Labs 將改變整個行業，並將成為 ODDITY 公司的巨大推動力。最後，隨著首次公開募股的成功完成，我們招募了一流的投資者合作夥伴加入我們，打造真正的轉型業務，以實現長期銷量的增長。

Moving on to our business performance. Net revenue increased 55% in the second quarter, driven by growth across brands, product categories, and markets. The unprecedented success of SpoiledChild is compelling proof point of the power of our model and tech platform. SpoiledChild scaled to $50 million of order billings in the first 12 months which we believe, makes it the most successful direct-to-consumer brand launch across any vertical.

繼續我們的業務績效。在品牌、產品類別和市場增長的推動下，第二季度淨收入增長了 55%。 SpoiledChild 前所未有的成功有力地證明了我們的模型和技術平台的力量。 SpoiledChild 在前 12 個月內的訂單額就達​​到了 5000 萬美元，我們相信這使其成為所有垂直領域最成功的直接面向消費者的品牌。

The brand became profitable only one year after launch and it will be a nice contributor to EBITDA this year. SpoiledChild continue to look better than IL MAKIAGE in all metric, although IL MAKIAGE is one of the strongest industry brands in history in terms of scale, growth, and profitability, yet SpoiledChild looks even stronger.

該品牌在推出僅一年後就實現盈利，今年將為 EBITDA 做出不錯的貢獻。 SpoiledChild 在所有指標上都繼續優於 IL MAKIAGE，儘管 IL MAKIAGE 在規模、增長和盈利能力方面是歷史上最強大的行業品牌之一，但 SpoiledChild 看起來甚至更強。

Drilling into physical product. New launches were solid driver of results in the quarter, and it's a compelling engine for us into '23 and beyond. We have an exciting product roadmap across color, skin, and hair for the rest of 2023 and '24. Our data-driven approach and direct-to-consumer model gives us the powerful advantage testing product in market and gathering data before officially launching to increase our chances of success.

深入研究實體產品。新產品的推出是本季度業績的堅實推動力，也是我們進入 23 年及以後的一個引人注目的引擎。我們為 2023 年剩餘時間和 24 年制定了涵蓋顏色、皮膚和頭髮的令人興奮的產品路線圖。我們的數據驅動方法和直接面向消費者的模式為我們提供了強大的優勢，可以在市場上測試產品並在正式推出之前收集數據，以增加我們的成功機會。

We truly launch product for our user base, unlike other B2C companies who launch products and then search for an audience for it. We already have live in market test that we launched during Q2 for our 2024 launches with very encouraging initial signs. We are also making a rapid progress on product development based on our proprietary and patent-pending ODDITY Labs molecule, which I will elaborate shortly.

我們真正為我們的用戶群推出產品，不像其他 B2C 公司推出產品然後為其尋找受眾。我們已經在第二季度為 2024 年的發布進行了現場市場測試，初步跡象非常令人鼓舞。我們還在基於我們專有且正在申請專利的 ODDITY Labs 分子的產品開發方面取得了快速進展，我將很快對此進行詳細闡述。

On technology products, we continue to build and optimize our AI and machine-learning model to enable profitable growth and support the journey. We made continued progress on our various models that improve repeat rate. We continue to roll out new versions from it and Spoiled brand to enhance product commendation, introducing improved post-purchase models that drive higher AOP, improving economics for first purchase and lifetime revenue. We continue to build our generated AI capabilities in text, images, video, and audio with tests across range of use cases, including customer acquisition and retention.

在技​​術產品方面，我們繼續構建和優化我們的人工智能和機器學習模型，以實現盈利增長並支持這一旅程。我們在提高重複率的各種模型上不斷取得進展。我們繼續推出它和 Spoiled 品牌的新版本，以提高產品評價，引入改進的售後模型來提高 AOP，提高首次購買和終生收入的經濟效益。我們繼續在文本、圖像、視頻和音頻方面構建生成的人工智能功能，並通過跨一系列用例（包括客戶獲取和保留）的測試。

We continued to make their rapid and meaningful progress in computer vision our strong team of computer vision, scientists, and process in vision technology as massive potential for our future. We continue to prioritize focus on two fronts. First, enhancing our existing technology products. And second, building new vision tools to deliver groundbreaking diagnostic capabilities.

我們繼續在計算機視覺領域取得快速而有意義的進展，我們強大的計算機視覺團隊、科學家和視覺技術流程為我們的未來帶來了巨大的潛力。我們繼續優先關注兩個方面。首先，增強我們現有的技術產品。其次，構建新的視覺工具來提供突破性的診斷功能。

In the second quarter, we deliver progress in both of those fronts. We continued integration of vision technology into our existing AI-matching engine. We made significant progress in the quarter in our new vision tools to both identify and categorize individual skin issues. These are center capabilities that we are building to support the role of brand number three with additional cases for the future.

在第二季度，我們在這兩個方面都取得了進展。我們繼續將視覺技術集成到現有的人工智能匹配引擎中。本季度，我們在新的視覺工具識別和分類個人皮膚問題方面取得了重大進展。這些是我們正在構建的中心能力，旨在通過未來的更多案例來支持第三品牌的角色。

On the marketing front, we continue to achieve very strong efficiency on marketing spend supporting our attractive revenue growth and strong profitability. We continue to optimize our performance marketing distribution model, and we continue to optimize our ads and conversion from this based on high-quality data set. We additionally continue to invest in our brands to drive awareness.

在營銷方面，我們繼續在營銷支出上實現非常高的效率，支持我們有吸引力的收入增長和強勁的盈利能力。我們不斷優化效果營銷的分發模式，並以此為基礎，基於高質量的數據集，不斷優化我們的廣告和轉化。我們還繼續投資於我們的品牌以提高知名度。

For IL MAKIAGE, our close partnership with the Arsenal Women's Football Club was recognized as one of the most successful women's sports partnership in the UK. As for SpoiledChild, we launch our first TV campaign which reached over 50 million households, delivered over 260 million impressions, which helped increasing brand awareness.

對於 IL MAKIAGE 來說，我們與阿森納女子足球俱樂部的密切合作被認為是英國最成功的女子體育合作夥伴之一。至於SpoiledChild，我們推出了第一個電視廣告活動，覆蓋了超過5000萬個家庭，產生了超過2.6億次展示，這有助於提高品牌知名度。

Moving to ODDITY Labs, we closed the acquisition of Revela in April to bring true biotech capabilities, and pharma's AI-based vertical discovery to drive game-changing physical product innovation to our categories. From day one, we want to harness this capability to drive the next generation of physical product innovation. We stood up ODDITY Labs, opening our research lab in Kendall Square Boston and expanding our team of the highest caliber bioengineers, chemists, and PhD scientists.

轉向 ODDITY Labs，我們於 4 月份完成了對 Revela 的收購，以帶來真正的生物技術能力和製藥公司基於人工智能的垂直發現，以推動我們類別中改變遊戲規則的物理產品創新。從第一天起，我們就希望利用這種能力來推動下一代物理產品創新。我們成立了 ODDITY Labs，在波士頓肯德爾廣場開設了我們的研究實驗室，並擴大了我們由最優秀的生物工程師、化學家和博士科學家組成的團隊。

The lab is fully operating today with our scientists working hard on our future. The lab is being overseen by myself, by Dr. Evan Zhao and by Dr. David Zhang. We are deepening the work on over 10 new molecules to address pressing near the pain points and unlock new and massive TAMs for all the team.

該實驗室現已全面投入運行，我們的科學家正在為我們的未來而努力。該實驗室由我本人、趙伊文博士和張大衛博士負責監督。我們正在深化對 10 多個新分子的研究，以解決痛點附近的問題，並為所有團隊解鎖新的、大規模的 TAM。

Finally, we made a very strong progress on our future brand launches, including brand number three and brand number four, which are planned to go live in 2025. For brand three, the current stages, mainly around continued effort of developing our computer vision technology that will be the core of the brand.

最後，我們在未來品牌的推出方面取得了非常強勁的進展，包括品牌三號和品牌四號，計劃於 2025 年上線。對於品牌三，目前階段主要圍繞繼續努力開發我們的計算機視覺技術這將是該品牌的核心。

In addition, we made progress in product development. My sister and I are spending at least 20% of our time on building brand number three. As for brand number four, we picked the category for the brand, and we have started building strong team and began working on brand positioning within the category.

此外，我們在產品開發方面也取得了進展。我和姐姐至少花了 20% 的時間來打造第三品牌。至於第四個品牌，我們選擇了品牌的品類，我們已經開始組建強大的團隊，並開始致力於品類內的品牌定位。

With that, let me hand it to Lindsay Drucker Mann, our CFO, to review our financial performance and outlook.

接下來，讓我將其交給我們的首席財務官林賽·德魯克·曼 (Lindsay Drucker Mann) 來回顧我們的財務業績和前景。

Thanks, Ron. We are pleased with our very strong financial performance in the second quarter, which supports our improved outlook for the third quarter and full year, and allows us to raise our fiscal 2023 outlook above plan. We're also pleased that similar to previous years, we were able to deliver the bulk of our full-year objective in the first half alone by aggressively fueling profitable growth in the first and second quarters. And thereby, enabling us to invest resources in future initiatives in the second half of the year.

謝謝，羅恩。我們對第二季度非常強勁的財務業績感到滿意，這支持了我們對第三季度和全年前景的改善，並使我們能夠將 2023 財年的前景提高到高於計劃的水平。我們還很高興與往年類似，通過積極推動第一和第二季度的盈利增長，我們僅在上半年就實現了大部分全年目標。從而使我們能夠在今年下半年的未來計劃中投入資源。

Our business continues to deliver the rare combination of scale, growth, and profitability, and the second quarter delivered on all fronts. Net revenue increased 55% for the quarter to $151.3 million. This result is 8% above the midpoint of the $135 million to $145 million preliminary estimate we communicated in connection with our IPO.

我們的業務繼續實現規模、增長和盈利能力的罕見結合，第二季度在所有方面都取得了進展。該季度淨收入增長 55%，達到 1.513 億美元。這一結果比我們就 IPO 所傳達的 1.35 億美元至 1.45 億美元的初步估計中值高出 8%。

Revenue growth in the period was very high quality, driven by growth across brands, categories, and markets. Our revenue continues to be driven largely by increased orders with nice incremental contribution year over year from SpoiledChild, which has rapidly scaled since its launch in the first quarter of last year.

在品牌、品類和市場增長的推動下，這一時期的收入增長質量非常高。我們的收入繼續主要受到訂單增加的推動，SpoiledChild 的逐年增量貢獻良好，自去年第一季度推出以來，該服務規模迅速擴大。

For the first half of the year, we increased net revenue by 69% to $317 million. Gross profit increased 60% to $106.8 million in the quarter. And gross margin improved to 70.6% and 68.2% in the prior year. The 244-basis-point improvement was driven by gross margin improvement across brands, offset by negative mix shift from higher contribution of SpoiledChild to sales.

今年上半年，我們的淨收入增長了 69%，達到 3.17 億美元。本季度毛利潤增長 60%，達到 1.068 億美元。毛利率較上年提高至70.6%和68.2%。 244 個基點的改善是由各品牌毛利率改善推動的，但被 SpoiledChild 對銷售額貢獻增加帶來的負面組合轉變所抵消。

Year to date, we generated 70.8% gross margins, a 328-basis-point improvement from the prior year. Reported net income was $30 million compared to $16.6 million in the prior year, and net income margin was 19.8%. Adjusted EBITDA increased 76% to $41.8 million in the quarter. This is 22% above the midpoint of the $32 million to $37 million preliminary estimates we communicated in connection with our IPO.

今年迄今為止，我們的毛利率為 70.8%，比上一年提高了 328 個基點。報告淨利潤為 3,000 萬美元，而上一年為 1,660 萬美元，淨利潤率為 19.8%。本季度調整後 EBITDA 增長 76%，達到 4180 萬美元。這比我們就 IPO 傳達的初步估計 3200 萬至 3700 萬美元的中點高出 22%。

Adjusted EBITDA margin expanded to 27.6% of sales, a 320-basis-point improvement versus the prior year. Adjusted EBITDA growth was largely driven by strong top-line growth, expanded gross margins and the higher contribution of repeat business to revenue versus the prior year. We generated $70.2 million of adjusted EBITDA in the first half of 2023 compared to $30.5 million in the prior-year period.

調整後 EBITDA 利潤率擴大至銷售額的 27.6%，比上一年提高了 320 個基點。調整後 EBITDA 的增長主要是由於強勁的營收增長、毛利率的擴大以及重複業務對收入的貢獻高於上年。 2023 年上半年，我們實現了 7020 萬美元的調整後 EBITDA，而上年同期為 3050 萬美元。

Adjusted net income increased 76% to $32.3 million in the quarter. Adjusted net income improvement was largely driven by increase in EBITDA. Weighted average diluted shares were 57.5 million in the quarter, and we delivered adjusted diluted earnings per share of $0.56 and reported diluted earnings per share of $0.52. The adjustments to GAAP metrics include $2.6 million of pre-tax stock-based compensation expense and $300,000 of other pre-tax nonrecurring items.

該季度調整後淨利潤增長 76%，達到 3230 萬美元。調整後淨利潤的改善主要是由 EBITDA 的增長推動的。本季度加權平均稀釋股票為 5750 萬股，調整後稀釋每股收益為 0.56 美元，報告稀釋每股收益為 0.52 美元。對 GAAP 指標的調整包括 260 萬美元的稅前股票薪酬費用和 30 萬美元的其他稅前非經常性項目。

Moving onto the cash flow statement and balance sheet. Year to date, we generated $76 million of cash from operations and free cash flow of $75 million after CapEx of $1 million. We exited the quarter with $107 million of cash on our balance sheet and no debt.

轉向現金流量表和資產負債表。今年迄今為止，我們從運營中產生了 7600 萬美元的現金，扣除 100 萬美元資本支出後的自由現金流為 7500 萬美元。本季度結束時，我們的資產負債表上有 1.07 億美元現金，沒有債務。

Turning to our financial outlook. On the back of our very strong 2Q results, we're raising our full-year 2023 guidance across sales and key profit metrics. This improvement is driven by flowing a portion of the 2Q beat across the full year, while reinvesting some portion of this upside back against the business in the back half. For the full year, we expect net revenue between $475 million and $480 million, representing 46% to 48% growth year over year, an improvement from our prior plan for 40% year-over-year growth.

轉向我們的財務前景。在我們非常強勁的第二季度業績的基礎上，我們提高了 2023 年全年銷售和關鍵利潤指標的指導。這一改善是由於第二季度業績的一部分在全年中流動，同時將部分上漲的部分重新投資於下半年的業務，從而推動了這一改善。對於全年，我們預計淨收入在 4.75 億美元至 4.8 億美元之間，同比增長 46% 至 48%，比我們之前的同比增長 40% 的計劃有所改善。

We expect gross margins of around 69.5%, which is better than the 67.9% we built into our prior plan. We expect adjusted EBITDA between $96 million and $101 million, representing EBITDA margins between 20% and 21% better than the $91 million we had expected prior. And adjusted EPS between $1.11 and $1.17, which includes a tax rate of around 25% for the full year and diluted shares of around 59.7 million.

我們預計毛利率約為 69.5%，優於我們之前計劃中的 67.9%。我們預計調整後 EBITDA 介於 9600 萬美元至 1.01 億美元之間，這意味著 EBITDA 利潤率比我們之前預期的 9100 萬美元高出 20% 至 21%。調整後每股收益在 1.11 美元至 1.17 美元之間，其中包括全年約 25% 的稅率和約 5970 萬股稀釋後股票。

One note about stock-based compensation. We expect to book expense of around $14 million in the third quarter, which is above our run rate expectation for stock-based comp going forward. And this is due to one-time expense associated with accelerated vesting in connection with our IPO.

關於股票薪酬的一點說明。我們預計第三季度的記賬費用約為 1400 萬美元，這高於我們對未來股票比較的運行率預期。這是由於與我們的 IPO 相關的加速行權相關的一次性費用。

Stock-based compensation expense is expected to decline in the fourth quarter to approximately $8 million. We are also introducing guidance for the third quarter of 2023, and you can find details of this guidance in our press release.

預計第四季度股票薪酬支出將下降至約 800 萬美元。我們還推出了 2023 年第三季度的指導意見，您可以在我們的新聞稿中找到該指導意見的詳細信息。

And with that, I'll turn it back to Oran.

有了這個，我會把它轉回給奧蘭。

Thanks, Lindsay, and thanks, everyone, for joining us today. Our strong second-quarter results demonstrate the power of our model, and our growth engines leaves us well positioned to deliver strong financial performance in the future. Our business is firing in all cylinders, and I have never been more bullish about our future. We are here to change a huge industry which is operating in the same model for a century.

謝謝 Lindsay，也謝謝大家今天加入我們。我們強勁的第二季度業績證明了我們模式的力量，我們的增長引擎使我們能夠在未來實現強勁的財務業績。我們的業務正在全速運轉，我對我們的未來從未如此樂觀。我們來這裡是為了改變一個以同樣的模式運營了一個世紀的巨大行業。

I'll now hand it back to the operator.

我現在將其返還給接線員。

Thank you for your participation today. And as a reminder, due to the timing of this earnings call, which is within the 25-day quiet period following the company's IPO, we will not be taking questions on today's call.

感謝您今天的參與。提醒一下，由於本次財報電話會議的召開時間是在公司 IPO 後的 25 天靜默期內，因此我們不會在今天的電話會議上回答問題。

And with that, this concludes today's teleconference. You may now disconnect your lines at this time.

今天的電話會議到此結束。此時您可以斷開線路。