Oddity (ODD) Q3 2025: Methodic Launch and 40% International Growth Signal Multi-Brand Acceleration
Oddity’s Q3 showcased disciplined execution—delivering 24% revenue growth, margin expansion, and the official launch of Methodic, its ambitious telehealth dermatology brand. The company’s international business grew 40% year-to-date, yet still represents only 17% of total revenue, underscoring vast untapped potential. With a robust balance sheet and a pipeline of proprietary products from ODT Labs, Oddity is building a multi-brand, tech-driven platform with long-term compounding growth in focus.
Summary
- Methodic Launch Redefines Platform Scope: Oddity’s new telehealth dermatology brand expands its addressable market and leverages proprietary tech.
- International Expansion Unlocks White Space: 40% year-to-date growth in overseas markets, but still a small share of total revenue.
- Labs Innovation Pipeline Accelerates: Eight proprietary molecule products set to commercialize in 2026, deepening competitive moat.
Performance Analysis
Oddity delivered 24% year-over-year revenue growth in Q3 to $148 million, exceeding guidance and reflecting sustained demand across its core brands. The company’s direct-to-consumer (DTC, selling directly to end customers online) model continued to outperform peers, with double-digit online growth at both Il Makiage and Spoiled Child. Gross margin expanded to 71.6%, up 170 basis points, despite tariff headwinds—offset by cost efficiencies and favorable product mix.
Repeat purchases increased as a share of sales, with 12-month cohort revenue trends remaining robust above 100%, signaling customer stickiness and high lifetime value (LTV, total profit from a customer over their relationship). Average order value (AOV) dipped 1%, primarily due to faster international growth where AOV is lower. Adjusted EBITDA of $29 million outpaced guidance, even as SG&A (selling, general, and administrative expenses) rose 30% to support brand launches and innovation.
- Order Growth, Not Pricing, Drives Top Line: Most revenue growth came from increased order volume, not price hikes.
- Margin Expansion Despite Tariffs: Gross margin gains outpaced input cost inflation, reflecting operational discipline.
- Free Cash Flow Remains Strong: $90 million in free cash flow year-to-date, even after inventory build for Methodic and tariff planning.
Oddity’s balance sheet remains a fortress with $793 million in cash and no near-term need for buybacks or M&A, giving it strategic flexibility.
Executive Commentary
"We achieved a huge milestone this week with the official launch of Methodic, the third brand in the Audity platform. Our long-term goal for Methodic is not just to launch another great brand and a telehealth platform, but to transform a broken medical care system using the best treatments and the highest standards of care available to everyone."
Aron Holtzman, Co-Founder and CEO
"This outperformance has been driven by the strength of our direct-to-consumer model and exposure to what we see as the key durable growth vectors in the industry, which are the consumer shift online and the migration towards high-efficacy products."
Lindsay Druckerman, Global CFO
Strategic Positioning
1. Methodic Brand Launch: Telehealth Dermatology Platform
Methodic, a telehealth dermatology brand, is Oddity’s most ambitious launch to date, targeting chronic skin conditions with 28 prescription and non-prescription products and over 100 treatment combinations. The platform leverages proprietary vision tools and a massive image dataset to enable personalized care, with a focus on compliance and outcomes. Its go-to-market strategy includes a major media campaign and TikTok activation to drive awareness and trust.
2. International Expansion: Early Stages, High Potential
International revenue grew 40% year-to-date, but still comprises just 17% of total sales, leaving substantial room for future scaling. Growth was driven primarily by existing markets (Canada, UK, Germany, Australia, Israel, France), with only 2% of revenue from new countries. Oddity’s measured approach—testing local economics before scaling—limits risk and positions it to capitalize on global white space.
3. ODT Labs: Proprietary Molecule Pipeline
ODT Labs, Oddity’s R&D engine, will commercialize at least eight new proprietary molecule-based products in 2026, spanning both Methodic and existing brands. This shift toward in-house innovation deepens Oddity’s competitive moat and aligns with consumer demand for efficacy-driven products. The Labs pipeline is expected to accelerate further as capabilities mature.
4. Data and AI-Driven Personalization
Oddity’s tech platform, built on proprietary datasets and AI, underpins product development, customer acquisition, and retention across brands. Initiatives include commerce agents to optimize conversion, AI-powered advertising, and personalized care pathways in Methodic, all reinforcing a defensible data advantage.
Key Considerations
Oddity’s Q3 results reflect a platform approach to beauty and wellness, leveraging tech, data, and disciplined capital allocation to drive sustainable growth. The company’s strategy is to manage growth across brands and geographies as a portfolio, flexing investment where returns are highest.
Key Considerations:
- Multi-Brand Synergy: Methodic leverages Oddity’s customer base, with initial cross-sell from Il Makiage and Spoiled Child fueling early adoption.
- Repeat Rate Durability: Elevated repeat rates (over two-thirds of business) offset rising acquisition costs and underpin robust LTV.
- Media Efficiency Trends: Acquisition costs rose in Q3 but have moderated into Q4, aided by improved media environment and higher conversion.
- Capital Flexibility: With nearly $800 million in cash and no near-term buybacks, Oddity is positioned to invest in innovation, M&A, or opportunistic returns.
Risks
Oddity faces macro headwinds from consumer softness and rising acquisition costs, but high repeat rates and portfolio flexibility have so far mitigated impact. Tariff volatility remains a manageable but persistent margin risk, and Methodic’s early stage requires ongoing investment with uncertain near-term payoff. International scaling is still nascent, with execution risk in new markets and regulatory complexity for telehealth expansion.
Forward Outlook
For Q4 2025, Oddity guided to:
- 21% to 23% revenue growth year-over-year
- Continued margin discipline, with gross margin expected at approximately 72.5%
For full-year 2025, management raised guidance:
- Net revenue of $806 to $809 million (24% to 25% YoY growth)
- Adjusted EBITDA of $161 to $163 million
- Adjusted diluted EPS of $2.10 to $2.12 (excluding buybacks)
Management highlighted:
- “No change” to long-term growth algorithm of 20% top-line and 20% EBITDA margin
- Methodic expected to scale faster than Spoiled Child, with additional medical domains in development
Takeaways
Oddity’s disciplined portfolio management, tech-enabled innovation, and strong balance sheet position it for durable, compounding growth—even as macro and input cost headwinds persist.
- Methodic Launch Expands TAM: The entry into telehealth dermatology leverages Oddity’s data advantage and opens new recurring revenue streams, with early cross-sell from existing brands.
- International Remains Early, High-Opportunity: Despite 40% growth, non-US markets are just 17% of revenue, providing a long runway as Oddity scales proven playbooks abroad.
- Labs Pipeline Is a Moat Builder: Proprietary molecules deepen differentiation and support higher efficacy claims, with eight launches in 2026 and more planned for future brands.
Conclusion
Oddity’s Q3 2025 results underscore a platform in transition—scaling new brands, deepening its tech moat, and methodically unlocking international and scientific white space. The company’s measured approach to growth, capital allocation, and innovation sets it apart as a durable compounder in the consumer health and beauty space.
Industry Read-Through
Oddity’s success with DTC, high-repeat digital beauty, and now telehealth dermatology signals a shift in consumer expectations toward efficacy, personalization, and convenience—pressuring legacy retail and CPG incumbents to accelerate digital transformation and scientific innovation. The company’s ability to balance margin expansion with aggressive new brand launches provides a blueprint for multi-brand digital platforms. Oddity’s measured international expansion and investment in proprietary R&D highlight the increasing importance of local adaptation and scientific differentiation in global beauty and wellness markets. Other players will need to build or acquire similar data and tech capabilities to remain competitive as the landscape evolves.