Oddity Tech Ltd. (NASDAQ:ODD) Q4 2025 Earnings Call Transcript

Oddity Tech Ltd. (NASDAQ:ODD) Q4 2025 Earnings Call Transcript February 25, 2026

Oddity Tech Ltd. misses on earnings expectations. Reported EPS is $0.09611 EPS, expectations were $0.14.

Operator: Good morning, and welcome to ODDITY’s Fourth Quarter 2025 Earnings Conference Call. Today’s call is being recorded, and we have allocated time for prepared remarks and Q&A. At this time, I’d like to turn the conference over to Maria Lycouris, Investor Relations for ODDITY. Thank you. You may begin.

Maria Lycouris: Thank you, operator. I’m joined by Oran Holtzman, ODDITY’s Co-Founder and CEO; and Lindsay Drucker Mann, ODDITY’s Global CFO. Niv Price, ODDITY’s CTO, will also be available for the question-and-answer session. As a reminder, 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 made about ODDITY’s business strategy, market opportunity, future financial performance, customer acquisition costs 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 issued earlier today and in our most recent annual report on Form 20-F filed with the Securities and Exchange Commission on February 25th, 2025.

We do not undertake any obligation to update forward-looking statements, which speaks 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. Additional information about these non-GAAP financial measures, including their definitions are included in our earnings press release, which we issued today. I’ll now hand the call over to Oran.

Oran Holtzman: Thanks, everyone, for joining our call today. 2025 was a strong year for ODDITY. We delivered record financial results with revenue, adjusted EBITDA and adjusted EPS all ahead of our plan. Revenue increased 25% to a record $810 million. We delivered record adjusted EBITDA of $163 million, representing 20.2% adjusted EBITDA margin. Across the year, we were able to once again raise our financial outlook every quarter on revenue and profit, and this is despite experiencing challenging user acquisition costs in H2 that drove an increase in advertising spend. Our strong and profitable repeat rates allowed us to once again deliver results ahead of our plans. And we accomplished all of this while investing heavily in our future.

Notably, this year, we successfully launched our third brand, METHODIQ, which expands our reach into the medical grade space where we see enormous potential. In addition, we continued our ongoing investments in ODDITY LABS in our tech infrastructure as well as new products and new brands. We believe that our powerful platform, brand and technology, combined with our growth investments, create long runway for us to grow in a big, attractive and profitable category, where we are well positioned to outrun our competition. We finished the year with strong balance sheet position with $776 million in cash and cash equivalents. Even as we work tirelessly to address what we believe is a near-term dislocation in our user acquisition cost, there is no change to our long-term vision, strategy or our commitment to growth.

First, the consumer immigration online where our brands maintain leading positions. One of the best indicators of our business health is our very strong repeat sales. In 2025, approximately 70% of ODDITY’s revenue came from repeat sales. Customer cohorts repeat behavior remains very strong and continues to increase. 12-month net revenue repeat rates for our 2024 cohort of first purchases increased from the 2023 cohort and remained over 100%. We believe these are outstanding repeat metrics compared with other direct-to-consumer companies and reflect the health of our brands, the quality of our products and the high satisfaction from our customers. Moving to our brands. IL MAKIAGE grew revenue low double digits in 2025 to approximately $560 million.

IL MAKIAGE Skin was a highlight as planned and finished the year at approximately 40% of IL MAKIAGE brand revenue, expanding from around 30% of brand revenue in 2024. The rapid success of IL MAKIAGE Skin since its launch in 2022 demonstrates the power of our platform and our ability to leverage our user base and technology to quickly scale new products and categories. International markets were also a key driver for IL MAKIAGE. ODDITY International revenue, the majority of which is from IL MAKIAGE grew 42% for the year. International markets represents 17.5% of overall ODDITY net revenue for 2025 compared with many of our competitors that generate more than 65% of net sales from international markets. SpoiledChild also had a strong year, increasing revenue double digits to approximately $250 million.

This is an incredible accomplishment for an online-only brand that just launched 4 years ago and once again shows the power of our platform and ability to scale. We remain excited about SpoiledChild’s long-term potential, including new product expansion in beauty and wellness. The launch of METHODIQ, our third brand, was a highlight accomplishment in 2025. METHODIQ is a medical telehealth platform that aims to deliver high-efficacy treatment at scale, starting in dermatology, addressing concerns like acne, hypopigmentation and eczema. It is off to a great start, and we are very pleased to see its initial success. Our early focus on acne hyperpigmentation and color products is showing good traction, and we believe this will be big categories for us.

We are seeing good metrics and continuous improvement in our KPIs even as our customer cohorts increase in size. What we see in METHODIQ’s app engagement reinforces our view that METHODIQ can uniquely deliver high standard of care for a broad audience and do it with great convenience. When we look at the app down rates, onboard completion, weekly check-in rates and care team engagement, we can see the demand, and we are bullish about how our app technology will drive user compliance satisfaction and success. Moving on to the second focus area of our long-term growth strategy, the consumer adoption of high-performance products that better address their pain points. Our product development pipeline for all 3 brands are focused on bringing the market top performers that we believe beat the competition on efficacy.

ODDITY LABS continue to push the frontier of ingredient innovation in beauty and wellness. Over the past 18 months, we have made major strides in our capabilities and infrastructure to improve our work with the goal of shrinking our time lines and improving the probability of success in identifying game-changing molecules. Our efforts in process and infrastructure have driven significant improvements in our productivity, increasing the number of targets we can tackle and allowing us to push projects along faster with greater accuracy. One highlight area is our work in traditional biology, which expands on our strong in silico and in vitro foundations. This work helps us to get stronger reach on the most relevant biomarkers for our products, increases our predictive power of success and does it in a way that is scalable, representative and [ retrigerous ] science.

Another highlight is our ability to identify biological targets that can influence a desired effect. We are focused on pain points with large commercial opportunities, including acne hyperpigmentation and aging. And our target list include pathways like reducing melanin production and boosting collagen and elastin. We are leveraging AI agent to map targets and structures and also applying our work in traditional biology to identify novel targets. We recently expanded our capabilities into peptides to add to our small molecule foundations and are working on peptide solutions in areas like acne and aging. This expansion into peptides gives us the flexibility to identify the right modality to address an individual biological target. At the same time, we are working in parallel to improve topical delivery of different activities to ensure they reach the relevant areas in skin and maximize the biological effect.

We expect to have 8 products in market in 2026 made with ODDITY LABS molecules. The innovation for METHODIQ is especially exciting, including molecules that cover key categories, including acne, eczema and hypopigmentation and more to come in the future that we are bullish about. Turning to our acquisition costs. We experienced an unprecedented dislocation in our account with our largest advertising partner, which we believe is due to recent changes in their algorithms that slightly diverted us to less desirable auctions and traffic at abnormally high costs. These changes resulted in significant abnormal increases in our new user acquisition cost for ODDITY that are not correlated with the market or our historical experience. We have never seen anything close to those acquisition costs, not in ODDITY and also not in other beauty advertisers.

This elevated acquisition cost is severely hurting our ability to acquire new users efficiently at high scale as we normally do in the first half of each year and have done consistently for the past 8 years very successfully. Both IL MAKIAGE and SpoiledChild appear to be impacted by these algorithm changes, although the impact on IL MAKIAGE was more severe probably due to its higher scale. After identifying the root cause in late January, we quickly moved to implement strong remediation actions, primarily around the modern infrastructure that we hope will get us back to the right options and ultimately drive improvement in our new user acquisition with significant progress in Q2 and normalization in Q3 or Q4. These types of algorithm updates are not new and have been ongoing through the years, and we’ve historically adapted to them.

In this case, it was harder than before to identify how these updates were impacting our business, and therefore, it was harder to identify the root cause. We believe we got hit by the algorithm change due to our user acquisition strategy that includes a Try-Before-You-Buy offering, which is a rare in beauty and therefore, may be an [ edge ] case within the new algorithm changes. We believe the algorithm updates impacts on how this platform interprets and weighs the signals associated with Try-Before-You-Buy model, primarily due to its inherent higher return rates and diverted us to lower quality auctions at abnormally high cost disconnected from the market. For more context about the model, Try-Before-You-Buy is designed for the benefit of the consumer by reducing the risk of trying our products online.

It is a pro-consumer model that allow us to replicate online the experience of physical stores like Sephora, where consumers can try products in real life and materially reduce the risk of purchase. This model is growing due to its complex execution. We believe it’s an edge case and a nonobvious interaction within the platform’s new auction dynamics. After assessing the driver of what we believe is hitting us, we quickly moved to fix it. Our remediation actions are designed to reduce Try-Before-You-Buy, down-weighting while preserving the ability for new customers to purchase products on a trial basis with minimal risk. Important to note, Try-Before-You-Buy isn’t a dependency for us. We offer it as a better alternative for consumer, but our agile model allow us to rebalance towards the standard buy offering if we see it is needed.

Unfortunately, because we only recently identified the root cause and despite working tirelessly to fix it, we have not had much time to take action, and it takes time to recover. Therefore, we expect negative impact on our 2026 financial results with the most significant impact expected in H1. But I want to be very clear, despite the dislocation in our new user acquisition we are currently facing, we are not changing our model, our strategy or our long-term focus on growth. The main objective of the company right now is correcting this issue and being in a position to immediately pivot back to growth. I want to close with some perspective on this moment in time. Over the past 8 years, we grew from $25 million of revenue to $800 million of revenue despite multiple changes on ad tech side, a prominent one with iOS 14.

We have navigated algorithm adjustments by our ad partners in the past, and we believe we will be able to also address the [ chronic ] dislocation. Most importantly, we believe we understand the problem and in a world of complex online auctions, understanding the problem is always the hardest part. We don’t see this as a structural issue or a secular disruption as you are seeing in other sectors or a negative macro trend for our category. It is a technical issue. And from here, we believe it is a matter of time and execution to deliver the strong outcomes we have constantly delivered over the past 8 years. And as I said, we believe we have a strong plan in place, and I hope to see normalization in H2. With that, I will turn it over to Lindsay.

Lindsay Mann: Thanks, Oran, let’s turn to our Q4 results, which I’ll refer to on an adjusted basis. You can find the full reconciliation to GAAP in our press release. ODDITY delivered an outstanding quarter to cap off a record-breaking year. We grew net revenue by 24% in the quarter to $153 million. Growth was driven primarily by an increase in orders, while average order value declined slightly year-over-year. The 24% revenue growth we delivered this quarter exceeded our guidance for growth of 21% to 23%. Gross margin of 70.5% compressed 220 basis points year-over-year and exceeded our guidance for gross margins of 69%. The delta versus our outlook was driven in part by product mix. We delivered adjusted EBITDA of $13 million in the quarter and adjusted EBITDA margin of 8.2%, above our guidance for adjusted EBITDA of $10 million to $12 million.

Adjusted EBITDA margin compressed by 410 basis points year-over-year due to planned investments for future growth, including the METHODIQ brand launch, ODDITY LABS and Brand 4 as well as higher media costs. We delivered adjusted diluted earnings per share of $0.20 compared to our guidance of between $0.11 and $0.13. Our adjusted EBITDA and earnings per share excludes approximately $8 million of share-based compensation. Turning to some highlights for the full year of 2025. We grew net revenue by 25% to $810 million with double-digit growth from both IL MAKIAGE and SpoiledChild. This 25% growth is ahead of our long-term algorithm target for 20% sustained top line growth. Net revenue growth was primarily driven by an increase in orders, while average order value increased slightly year-over-year.

Gross margin of 72.7% expanded 30 basis points year-over-year, driven by cost efficiencies. We delivered adjusted EBITDA of $163 million. Adjusted EBITDA margin of 20.2% is consistent with our 20% long-term earnings algorithm target. And that’s despite our planned investments in future growth initiatives, including METHODIQ brand launch and ODDITY LABS and despite increased advertising costs. Advertising costs increased approximately 50% year-over-year, reflecting growth investments in international markets and METHODIQ as well as higher acquisition costs for IL MAKIAGE and SpoiledChild. We delivered adjusted diluted earnings per share of $2.21. We exited the year in a strong liquidity position, including $776 million of cash, cash equivalents and investments on our balance sheet.

The buildup in reserves in 2025 was driven by our successful exchangeable note offering and free cash generation of $84 million for the year. Free cash flow in the fourth quarter was negatively impacted by approximately $19 million of increased inventory due in part to new inventory investments in METHODIQ on top of our seasonal inventory build ahead of the Q1 selling period. We amended our credit facilities in January of 2026 to expand our borrowing capacity to $350 million. These facilities remain undrawn. As for potential uses of cash, we believe repurchasing our stock is attractive at recent share prices and intend to opportunistically return cash to shareholders through buybacks. There’s $103 million remaining on our previously announced repurchase authorization.

As Oran discussed, we experienced a significant increase in our new user acquisition spend Q1 to date. The timing of normalization is uncertain, although we’re working hard to have this behind us. Our remediation actions have started but are still in early stages, so we’re not going to make any predictions on their success. Due to the uncertain timing of recovery, we’re not issuing full year ’26 guidance at this time, but we’ll provide updates to our progress and outlook as we get more visibility. A few things to keep in mind for your models. We expect Q1 sales will decline approximately 30% due to reduced acquisition revenue. We’re still spending acquisition dollars today despite much higher CPA, and this is so that we can continue feeding the algorithms the signals needed to reset and normalize.

At current CPAs, we are not profitable at first order, and that has material negative impact on our near-term EBITDA. We are, however, still profitable on a 12-month direct contribution margin basis because of the strong repeat we generate from acquisition sales. Based on the expected timing of CPA normalization, Q2 sales are also likely to decline, but it’s too soon to determine the magnitude. Q1 and Q2 are historically our largest periods of user acquisition. And from that acquisition, we typically generate significant repeat revenue over the balance of the year. The reduced user acquisition activity today will therefore result in lower repeat sales later in the year, even if acquisition costs normalize. We’re managing costs through this period to offset EBITDA pressure but continue to carve out investments in growth initiatives like ODDITY LABS, new brands, product development and our tech infrastructure, and we believe this is the right strategy to set us up for sustained growth if CPA normalizes.

With that, I’ll hand it back to the operator for questions.

Operator: [Operator Instructions] The first question is from Youssef Squali from Truist Securities.

Q&A Session

Youssef Squali: Maybe dig a little deeper into the algo change. I’m assuming this is related to Google’s Andromeda. When did the issue actually start — when did you start seeing it? Has it — is it continuing to — is the trend continuing to worsen? Or has it kind of stabilized? And lastly, Oran, when you talk about the issue being related to Try-Before-You-Buy, does that mean that you guys are going to deemphasize that? Or is there work around it such that you can continue to differentiate yourself through that offering and still maybe rank higher?

Lindsay Mann: Thanks, Youssef. We didn’t specifically name the advertising partner, but the issue is we first observed that something was different in the second half of 2025, and we did call it out on our November earnings call, but it did get much worse as we entered 2026 and really began to scale our business. And I think at the time, when we’ve spoken to you, we had started to see some improvement, but it’s always difficult for us to get a read on CPA as you go in the holiday quarter because it’s just not a typical market. There’s a lot of noise. And so as we moved into Q1 and we started to scale, that’s when we saw the dislocation.

Oran Holtzman: [ H4 ] moving from Try-Before-You-Buy, look, we believe that we can still solve it. We try, as I mentioned, we believe it’s pro consumer. We believe it’s the right thing to do. But I also mentioned that we can — that we know how to move to buy like the rest of the industry. I want to say that more than 95% are selling via [ buy so ]. It’s not something new, and we know how to do. As for what we do, there are a range of things that we need to identify the issue and working on fixing it. We Try-Before-You-Buy, including Deep Signals Audit, Final UI/UX adjustment, a lot of work on the infrastructure side, building new prediction models, offering adjustments and different audience strategies. We wouldn’t sit here today if we didn’t think that we can solve it, we try. We would say that we are moving to buy, but the fact that we believe that it’s solvable with the current business model.

Operator: The next question is from Anna Lizzul from Bank of America.

Anna Lizzul: I just wanted to ask on the change or the lack of guide here, I guess, and what you can recover for the remainder of the year, it does seem like an uphill battle. Is it possible to shift this user acquisition really from Q1 or H1 into Q2 or H2? Or will there be more of a delay? And does this change your thinking at all on distribution, just given you are vastly sold on direct-to-consumer, would this make you think at all about going into retail?

Oran Holtzman: As mentioned, no change in our strategy. Thank God, this is our strategy. Online is our strategy. Online continue to grow, and there is no change in our plans or no plans to move into retail at this point. We are confident we can go back to growth. We believe it’s something that it’s a temporary change that happened that we need to adjust to. So no change in distribution strategy. Lindsay, do you want to answer about the second half of the year?

Lindsay Mann: Yes. Thanks Oran. So, we’re navigating a situation today where CPA is significantly higher than last year, in some cases, 2-plus x higher in some cases. And as a result, we’ve dialed back on our acquisition to manage it. Remember that, as I mentioned in my prepared remarks, at current CPAs, we are not profitable at first order. And so that has a material negative impact on our near-term EBITDA. We are still profitable on a 12-month contribution margin basis. But in the near term, as we spend, you have pressure. And since Q1 and Q2 are our largest periods of acquisition, we’ll have — as I mentioned in my remarks, we’ll have that carryover effect into the back half of the year as we lose the repeat. And so in the short term, we view this as a pothole that we’ll have to recover from. But as the business in CPA normalizes as we hope it will in the back half of the year, we’ll be on a track to normalize our financial model as well.

Oran Holtzman: By the way, I would just add that Lindsay mentioned even more than 2x. If we saw something gradually increasing in terms of CPA, we wouldn’t think that something is completely off. We know that the current numbers that we see in user acquisition are completely off market, and we know it’s — and therefore, we believe it’s something technical, and we work really hard to go back to — by the way, we never built the business on marketing margin, on making profit from better acquisition strategy or execution. We build the business on repeat. that can protect us from regular increase in media spend. By the way, we see it every year. But this is something completely off, very unusual. We never saw anything like it. And based on my understanding, like it doesn’t exist elsewhere.

Operator: The next question is from Brian Tanquilut from Jefferies.

Brian Tanquilut: Maybe, Lindsay, just as I think about the model, right, I mean one of the things that we’ve always loved about your business is how you can flex the advertising spend. And obviously, as you said, CPA is up more than 2x in some cases. So when we think about how you would strategize around this, I mean, once things normalize, I mean, should we expect kind of like a steep pullback on advertising expense? Or just curious how you’re thinking about strategizing around this once we get that normalization point? And then can you just give us any color on retention rates or reorder rates that you’re seeing in the market?

Oran Holtzman: I’ll start and maybe you take it. Even when media is abnormal as now, you don’t want to stop the train. You still need to feed the algorithm and continue to spend so that you are giving it signals, it needs to go back on track. We have balance between not overspending at this crazy CPA that doesn’t make sense while keep them — and the signals going. And that’s our plan to keep balance that way until we fix it.

Lindsay Mann: As far as what normalization looks like for us, it would be something in line with what the rest of the industry CPA is. That’s typically how our business has operated. It’s a very, very big auction. It’s a lot of competitors in there, and we typically are around where we would see our competition in terms of CPA. Right now, we’re completely dislocated and off market based on this dislocation and this malfunction of sorts. And as we address it, as Oran said, we should be getting back to track. I don’t know if I remember your second question.

Brian Tanquilut: Just on the reorder rate that you’re seeing anything there as well.

Lindsay Mann: Repeat rates remain very strong. This is one of the reasons why we know we don’t have a brand issue. We don’t have a saturation issue. We continue to see very good performance out of our repeat. Repeat revenue is for 2025, around 70% of our sales. And as we look at our 12-month net revenue repeat rates, those increased again. So the 2024 cohort that repeated in 2025, that number increased relative to the prior year. So that’s well nicely over 100%. And even as we look at our more recent cohorts within who started in 2025, those net revenue repeat rates on a 6-month or so basis are better than they were in the prior year. That trend remains very strong.

Operator: The next question is from Andrew Boone from Citizens Bank.

Andrew Boone: Can you guys help us understand just what exactly is changing within your guys’ funnel? Is this higher CPMs? Is this lower click-through rates? Is this worse on-site conversion, meaning it’s a lower quality user that you’re targeting? Help us understand that dynamic. And then one of the things that we’ve also always appreciated about the business is just your ability to be able to pull different levers to be able to sustain that 20% growth. And so can you just help us understand the size of this channel and your inability to be able to allocate spend elsewhere and help us understand just why this is an overly large impact versus what we would have thought was a more diversified ad platform?

Oran Holtzman: Yes. When we refer to our ability to grow through multiple — in multiple areas, one thing that is important to note because this change is for ODDITY is global and across brands, it makes it harder, and that’s why we came to the market with 30% decrease target in Q1. It’s very hard to continue to grow without overspending. And obviously, this is something that we don’t want to do in those CPA levels. Lindsay, do you want to continue?

Lindsay Mann: Yes. As it relates to mix, what I can tell you is that for our largest ad partner, if you just look at pure platform orders, — so that’s any order that can be attributed directly to an ad from this specific partner. Those revenues make up just under 1/4 of our revenue, and that’s based on our internal attribution system. But keep in mind, this is just pure acquisition dollars. And on top of acquisition, you also get repeat, you have direct revenue. So there’s additional impact. We have relationships with many different ad partners. I want to say almost — I don’t want to say all of them, but many, many different ad partners, but your ability to scale is only so much with each individual, and so this is impacting us.

Operator: The next question is from Georgia Anderson from Evercore ISI.

Georgia Anderson: You mentioned that you’ve made kind of significant actions to fix this. Can you maybe clarify if these are more structural, I guess, technical fixes to your internal, I guess, data feedback loops, maybe retraining your AI to find intent users, kind of things like that? Or is the rebound expected to come from like a strategic shift in budget allocation? Maybe just talk us through the fixes that you’re making.

Oran Holtzman: Yes, it’s both infrastructure side, offering adjustments and signal adjustments. We do all. The good thing about us is those points of time, like when you need to make multiple changes, we do everything in-house. We are not dependent on third parties, data scientists, developers, media buyers, so we can run dozens of variants at the same time. And that’s what we did in the past few weeks. And therefore, we believe that we are more prepared than most companies to address it.

Operator: The next question is from Scott Schoenhaus from KeyBanc Capital Markets.

Scott Schoenhaus: Lindsay, is there areas that you’re currently seeing strength that you could possibly offset this weakness strategically? I want to focus here on international opportunities and then the Brand 3 rollout, which you mentioned was — has seen nice success.

Oran Holtzman: Yes. I’ll start with the good news. We launched Brand 3 METHODIQ. It’s growing more than what we saw in IL MAKIAGE when we launched IL MAKIAGE, it’s facing SpoiledChild. So we are very pleased to see the demand and success of METHODIQ by the way, as we thought. As for international and other areas, you still need user acquisition, and we still don’t want to overspend just to meet the revenue goals. I never run the business like that before. And that’s why the business is profitable for many, many years and last year, 20%. So — we first need to fix it and then we go back to growth.

Operator: The next question is from Ryan MacDonald from Needham & Company.

Ryan MacDonald: As we think about balancing sort of the near-term priority of sort of fixing the problem here versus sort of balancing with longer-term investments to sort of continue the growth sort of growth trajectory once these problems are solved. Can you talk about sort of what that balance looks like internally right now? And then what are some of the priorities, whether it’s continuing down the path of product development with ODDITY LABS growing METHODIQ brand? Also, is there a risk here that we see a delay or a push out in sort of the Brand 4 launch plans as well?

Oran Holtzman: Since we identify — since we believe we identified the problem, we are not changing our investments in growth. We believe it’s the right thing to do. We continue to invest in labs. We continue to build Brand 4, and we continue to work tightly on new products in NPD for IL MAKIAGE, SpoiledChild and METHODIQ. And that’s for the first question. The second one, what was it, Lindsay?

Lindsay Mann: What was the second question, Ryan?

Ryan MacDonald: Yes. So it was just any concerns about a delay in Brand 4? And then as we kind of come out of this, whether you lean into investment more aggressive for growth as we work back towards the balance of 2020 or sort of work more towards margin expansion?

Oran Holtzman: The current focus of my leadership is fixing the problem. That’s the first priority. Most of the teams are working on that. At the same time, we continue to invest in ODDITY LABS, we continue to grow it, and we continue to build Brand 4.

Operator: The next question is from Kate Grafstein from Barclays.

Kate Grafstein: I was just wondering how does this dislocation impact the launch of METHODIQ? I know you had planned to step up spending in the first half of the year with this launch, and that was expected to have an impact on your EBITDA margins in the first half.

Oran Holtzman: Yes. The fact that METHODIQ is relatively small, we can — it means that we can continue to grow it without the negative effect that we see. It doesn’t mean that the [ core ] problem doesn’t affect METHODIQ. But since it’s running at low scale compared to IL MAKIAGE, SpoiledChild, we can continue to grow and meet our targets for this brand for this year.

Operator: This concludes the question-and-answer session. I would like to turn the floor back over to Oran Holtzman for closing comments.

Oran Holtzman: Thank you guys for joining. See you next quarter.

Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.