Inside Oddity’s Tech-Driven Beauty Revolution
Silicon Valley Meets Sephora
Earnings Overview
Oddity’s quarterly earnings may appear uneven, with some quarters outperforming others — a typical pattern for consumer brands due to seasonality. Despite this, the overall earnings trajectory remains positive.
Earnings Call Sentiment: Positive
Management communicated strong optimism, supported by robust revenue and EBITDA growth, brand expansion, and deeper international reach. Challenges such as potential tariffs and lower average order value in newer markets were acknowledged but deemed manageable.
Company Guidance Highlights
Record Revenue Growth:
Revenue grew 27% year-over-year to $268 million, beating both expectations and prior guidance.Strong EBITDA Margin:
Adjusted EBITDA reached $52 million (19.5% margin), exceeding internal forecasts.High Free Cash Flow:
$87 million in free cash flow was generated, reflecting strong unit economics and operational efficiency.International Expansion:
Both U.S. and overseas markets saw double-digit growth, with international markets becoming an increasingly important driver.Brand Momentum:
SpoiledChild is projected to surpass $200 million in revenue. A third brand is scheduled to launch in 2025.Gross Margin Expansion:
Gross margin rose by 116 basis points year-over-year to 74.9%, thanks to better cost control and product mix optimization.
Innovation Beyond Products
Oddity operates in the beauty space — primarily makeup, skincare, and haircare — but its true differentiator lies in how it delivers products, not just what it sells.
Brands under Oddity includes Il Makiage, SpoiledChild. Il Makiage has 1.5M followed on Instagram and is well reviewed on beauty sites.
Compared to legacy giants like Estée Lauder or price-driven brands like E.L.F., Oddity stands out through data-driven personalization and tech-enhanced product matching.
Tech-Driven Personalization
AI Matching Algorithms:
Users answer online questionnaires to receive tailored product suggestions — including foundation shades chosen from up to 50 options.Mobile Diagnostics:
Using only a smartphone, Oddity can analyze skin and hair characteristics, track blood flow, and map melanin and hemoglobin levels for precise color matching.
Oddity Labs: AI Meets Beauty
Oddity Labs (formerly Revela) is a Boston-based biotech arm acquired in 2023 for $76 million, with an additional $25 million invested post-acquisition. Its mission: bring pharmaceutical-grade AI molecule discovery to the beauty and wellness space.
How It Works
Oddity Labs runs a high-speed, AI-driven R&D pipeline:
High-Throughput Screening:
Robotic testing of tens of thousands of molecules using biological assays.AI-Powered Scaling:
Deep learning and computational biology scale the molecule search to millions of possibilities.Molecular Validation:
Lab-based testing (in vitro) verifies the most promising candidates.Clinical Testing:
Advanced ex vivo and in vivo testing ensures safety and real-world efficacy.Product Integration:
Molecules are incorporated into consumer products through formulation and analytical chemistry.
Scale: Over 25,000 molecules screened per second
Library: Over 1 billion screenable molecules
IP: More than 200 molecules pending patent
Key Discoveries
ProCelinyl:
A molecule that supports dermal papilla cells to improve hair follicle vitality. Shown to outperform market leaders in clinical satisfaction and hair growth efficacy.Fibroquin:
Targets collagen production to improve skin elasticity and plumpness. In clinical trials, it doubled skin elasticity results compared to a 0.5% retinol serum — without typical side effects like irritation.
These molecules are already being integrated into Oddity's product portfolio, with the goal of setting new performance standards in the beauty and wellness industry.
Institutional Ownership Summary
Stock IPOed in Sep 2023. Funds hold 55%, management 17%.
Client experience
This is how its email communication looks like:
Instead of paying upfront, you only cover the shipping cost. You get to try the product for 14 days. If you love it, you keep it — and they charge you at the end of the trial. If not, just send it back.
It’s a clever way to lower the barrier to purchase and reduce buyer hesitation.
Final Thoughts
Oddity isn’t just selling beauty products — it’s reinventing how they’re discovered, tested, and delivered. By fusing advanced AI, biotech-grade R&D, and seamless customer experience, the company is positioning itself far ahead of traditional players in the space. Its “try before you buy” model, combined with science-backed formulations and tech-driven personalization, lowers friction and builds trust in a category often plagued by skepticism. If its momentum continues, Oddity could become the blueprint for the next generation of consumer brands — where beauty meets biotech, and marketing meets machine learning.