OLPX Filings — Olaplex Holdings, Inc.

OLPX Filings — Olaplex Holdings, Inc. - FilingSpy

10-Q · Quarter ended Mar 31, 2026 · SEC filing ↗

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Management's Discussion and Analysis

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited, interim Condensed Consolidated Financial Statements and related notes included elsewhere in this Quarterly Report and with our audited Consolidated Financial Statements included in the 2025 Form 10-K. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business and our proposed acquisition by Henkel US Operations Corporation, includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from management’s expectations as a result of various factors. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and those discussed in the section “Special Note Regarding Forward-Looking Statements” in this Quarterly Report and in “Item 1A. - Risk Factors” in this Quarterly Report and in the 2025 Form 10-K. Company Overview OLAPLEX is a foundational health and beauty company powered by breakthrough innovation that starts with and is inspired by the professional stylist (“Pro”). Our products are designed to enable Pros and their clients to achieve their best results and to provide consumers with a holistic hair regimen that starts by establishing a foundation for healthy hair. In 2014, OLAPLEX revolutionized the haircare category through the introduction of our patent-protected bond-building technology, Bis-aminopropyl diglycol dimaleate (“Bis-amino”), in our No. 1 Bond Multiplier® and No. 2 Bond Perfector® products. This new two-part salon treatment allowed Pros around the world to repair disulfide bonds deep inside the hair that are broken during chemical services (such as coloring, perming and straightening). Later in 2014, OLAPLEX launched an at-home version of this signature bond-building treatment, No. 3 Hair Perfector®, allowing consumers to achieve the benefits of OLAPLEX beyond the salon. By the end of 2015, OLAPLEX products were sold globally, demonstrating the relevance of the product and brand proposition around the world. From our original three bond-building products, we expanded to a range of products suitable across hair types for use in the salon and at home. Since our inception, we have focused on delivering patent-protected technology and proven performance in the prestige haircare category. From our origins of creating the bond-building space, our product portfolio has expanded to approximately 30 products that support the hair health needs of our Pro and consumer communities. Our synergistic omnichannel model leverages the strength of each of our channels and our strong digital capabilities, which we apply across all of our sales platforms. Our professional channel serves as the foundation for our brand. Through this channel, Pros introduce consumers to our products and, we believe, influence consumer purchasing decisions. Our specialty retail channel allows us to build our brand by reinforcing our relationship with current consumers and accessing new consumers. Our DTC channel, comprised of Olaplex.com and sales through third-party e-commerce platforms, further broadens our access to consumers, while allowing us to directly engage with and educate consumers through our owned platforms. Proposed Acquisition by Henkel US Operations Corporation On March 26, 2026, Olaplex Holdings entered into an Agreement and Plan of Merger (as it may be amended, modified or supplemented from time to time, the “Merger Agreement”), by and among Olaplex Holdings, Henkel US Operations Corporation, a Delaware corporation (“Parent”), and Margot Acquisition Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”). Upon the terms and subject to the conditions of the Merger Agreement, Merger Sub will merge with and into Olaplex Holdings, with Olaplex Holdings continuing as the surviving corporation and as a wholly owned subsidiary of Parent (the “Merger”). If the Merger is completed, each share of common stock, par value $0.001 per share, of Olaplex Holdings (the “Common Stock”) issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”) (subject to certain exceptions described in “Note 1 – Nature of Operations and Basis of Presentation – Proposed Acquisition by Henkel US Operations Corporation” to the Company’s Condensed Consolidated Financial Statements of this Quarterly Report) will be converted into the right to receive $2.06 per share in cash, without interest, subject to applicable withholding taxes. The Merger Agreement contains customary representations, warranties and covenants that we must observe, including certain interim operating covenants that may restrict our operations during the pendency of the Merger, subject to certain exceptions. In addition, the Merger Agreement contains certain termination rights that may require us to pay Parent a $40,440,000 termination fee under certain circumstances. For additional details of the Merger and the terms thereof, refer to the Merger Agreement, a copy of which is incorporated by reference as an exhibit to this Quarterly Report. 21 Table of Contents The Merger is presently expected to close as soon as the second half of 2026, subject to customary closing conditions, including, without limitation, (i) twenty calendar days having elapsed since we mailed to our stockholders the information statement as contemplated by Regulation 14C of the Exchange Act, (ii) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and approvals under the laws of Germany, Australia and the United Kingdom, and (iii) the absence of any law or governmental order prohibiting the Merger. The initial outside date for completion of the Merger is March 31, 2027, which may be extended to September 30, 2027 if, as of such initial date, all conditions to the closing of the Merger other than conditions relating to the HSR Act or other applicable antitrust and foreign direct investment laws have been satisfied or waived. We cannot predict with certainty, however, whether or when all the required closing conditions will be satisfied or if the Merger will close at all. Our Strategy Following the initial implementation of our “Bonds and Beyond” vision in 2025, we are focused on the following three strategic priorities in 2026 aimed at accelerating our transformation. Energize our “Hero” Products We seek to implement our 360-degree marketing engine to maximize the productivity of our core products, which are significant contributors to our brand health and business. In addition, we are upgrading and expanding the assortment of our core products. Through targeted marketing strategies and enhanced storytelling, we are focused on continuing to elevate our brand and enhancing brand loyalty to generate demand. Fuel Science-based Innovation Olaplex’s heritage includes a focus on bringing technical solutions to real-world hair concerns, and in 2026, we remain focused on expanding our product portfolio with science-based innovation. We have refined our research and development and new product development processes to prioritize innovation that seeks to address specific, meaningful consumer and Pro needs. We seek to deliver targeted, science-backed solutions that simplify the user experience and achieve visible results, and we expect to launch more innovations in 2026 than in 2025. In addition, we are pursuing growth in new verticals that we consider natural extensions of our existing product portfolio. Expand our Diversified, Scalable Go-to-market Model We are focused on sharpening our execution to support our Bonds and Beyond vision. We seek to capitalize on renewed momentum in our Professional channel, providing our Pro partners with tools and support to serve as powerful ambassadors for our brand. We are also deepening our point-of-sale partnerships, tailoring our brand marketing strategies and utilizing key promotional windows aimed at driving visibility while protecting our premium positioning. We will continue to focus on executing our three-tiered international strategy, prioritizing high-potential regions and improving local execution as we seek to scale our global reach in a disciplined, repeatable way. Finally, we aim to optimize our points of access to meet our consumers where they shop and maintain brand integrity as we extend our global footprint. Business Environment & Trends We continue to monitor the effects of the global macro-economic environment, including the risk of recession, inflationary pressures, competitive products and discounting, currency volatility, high interest rates, social and political issues, geopolitical tensions, regulatory matters and changes to tariffs and trade policies of the United States and other countries. Based on policies in place as of the date of filing of this Quarterly Report, we expect the most recent changes in tariffs and trade policies will have a relatively modest impact on our business since the vast majority of our products sold in the U.S. are sourced and manufactured domestically. However, related uncertainties could impact consumer discretionary spending, demand for our products, and ordering patterns and inventory practices at our customers. We also are mindful of inflationary pressures on our consumers amidst an increasingly competitive industry, and we are monitoring the impact that consumer confidence may have on consumer spending at our customers. 22 Table of Contents Competition in the beauty industry is based on a variety of factors, including innovation, product efficacy, pricing, brand recognition and loyalty, service to the consumer, promotional activities, advertising, special events, new product introductions, e-commerce initiatives, sustainability and other activities. We have seen increased competitive activity including discounting in the prestige haircare category. We believe we have a well-recognized and strong reputation within the beauty industry, from our customers to the end-consumer, and that the quality and performance of our products, our emphasis on science-based innovation, our asset-light operating model, and our engagement with our Pro and consumer communities position us to compete effectively. Results of operations Comparison of the Three Months Ended March 31, 2026 to the Three Months Ended March 31, 2025 The following table sets forth our consolidated results for each of the periods presented: Three Months Ended March 31, 2026 2025 (in thousands) % of net sales (in thousands) % of net sales Net sales $ 99,369 100.0 % $ 96,978 100.0 % Cost of sales: Cost of product (excluding amortization) 25,293 25.5 27,230 28.1 Amortization of patented formulations 2,416 2.4 2,392 2.5 Total cost of sales 27,709 27.9 29,622 30.5 Gross profit 71,660 72.1 67,356 69.5 Operating expenses: Selling, general, and administrative 65,951 66.4 47,987 49.5 Amortization of other intangible assets 10,820 10.9 10,893 11.2 Total operating expenses 76,771 77.3 58,880 60.7 Operating (loss) income (5,111) (5.1) 8,476 8.7 Interest expense 7,132 7.2 13,725 14.2 Interest income (2,702) (2.7) (5,952) (6.1) Other expense (income), net 142 0.1 (178) (0.2) (Loss) Income before provision for income taxes (9,683) (9.7) 881 0.9 Income tax (benefit) provision (4,396) (4.4) 416 0.4 Net (loss) income $ (5,287) (5.3) % $ 465 0.5 % Net Sales We distribute products in the U.S. and internationally through professional distributors in salons, directly to retailers for sale in their physical stores and on their e-commerce sites, and DTC through sales to third party e-commerce customers and through our Olaplex.com websites. As such, net sales by our three sales channels consisting of professional, specialty retail and DTC were as follows: (in thousands) Three Months EndedMarch 31, 2026 2025 $ Change % Change Net sales by Channel: Professional $ 38,785 $ 34,538 $ 4,247 12.3 % Specialty retail 33,411 38,553 (5,142) (13.3) % DTC 27,173 23,887 3,286 13.8 % Total Net sales $ 99,369 $ 96,978 $ 2,391 2.5 % 23 Table of Contents Total net sales increased 2.5% for the three months ended March 31, 2026, compared to the same period in 2025. By channel, professional increased 12.3%, DTC increased 13.8% and specialty retail decreased 13.3% for the three months ended March 31, 2026, as compared to the same period in the previous year. U.S. and international net sales represented 48% and 52% of total net sales, respectively, for the three months ended March 31, 2026. U.S. and international net sales represented 51% and 49% of total net sales, respectively, for the three months ended March 31, 2025. Cost of Sales and Gross Profit (in thousands) Three Months EndedMarch 31, $ Change % Change 2026 2025 Cost of sales $ 27,709 $ 29,622 $ (1,913) (6.5) % Gross profit $ 71,660 $ 67,356 $ 4,304 6.4 % Our cost of sales decreased primarily due to channel mix in the three months ended March 31, 2026 as compared to the same period in the previous year. In addition, the Company recorded $0.2 million in inventory write-offs during the three months ended March 31, 2026, as compared to $1.1 million recorded during the three months ended March 31, 2025. As a result of the activity described above, our gross profit margin increased to 72.1% for the three months ended March 31, 2026 from 69.5% in the three months ended March 31, 2025. Operating Expenses (in thousands) Three Months EndedMarch 31, 2026 2025 $ Change % Change Selling, general, and administrative expenses $ 65,951 $ 47,987 $ 17,964 37.4 % Amortization of other intangible assets 10,820 10,893 (73) (0.7) % Total operating expenses $ 76,771 $ 58,880 $ 17,891 30.4 % The increase in selling, general and administrative expenses during the three months ended March 31, 2026, compared to the same period in 2025, was primarily driven by an increase of $7.9 million in non-payroll advertising and marketing expenses, $7.4 million in Merger transaction-related costs and $3.9 million in payroll costs driven by headcount and merit increases, partially offset by a decrease of $1.6 million in other legal and professional fees. Interest Expense, Net (in thousands) Three Months EndedMarch 31, 2026 2025 $ Change % Change Interest expense $ 7,132 $ 13,725 $ (6,593) (48.0) % Interest income (2,702) (5,952) 3,250 (54.6) % Interest expense, net $ 4,430 $ 7,773 $ (3,343) (43.0) % Interest expense for the three months ended March 31, 2026 decreased as compared to the same period in the previous year due to our voluntary repayment of $300.0 million of outstanding principal on the 2022 Term Loan Facility on May 1, 2025, as well as lower interest rates during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. Interest income for the three months ended March 31, 2026 decreased as compared to the same period in the previous year due to the $300.0 million principal repayment on the 2022 Term Loan Facility, which reduced available funds for investments, as well as lower interest rates during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. 24 Table of Contents Other Expense (Income), Net (in thousands) Three Months EndedMarch 31, 2026 2025 $ Change % Change Other expense (income), net $ 142 $ (178) $ 320 (179.8) % Other expense, net was $0.1 million for the three months ended March 31, 2026, as compared to other income, net of $0.2 million for the three months ended March 31, 2025, primarily due to foreign currency transaction activity driven by the performance of the U.S. dollar. Income Tax (Benefit) Provision (in thousands) Three Months EndedMarch 31, 2026 2025 $ Change % Change Income tax (benefit) provision $ (4,396) $ 416 $ (4,812) (1,156.7) % Our effective tax rate was 45.4% for the three months ended March 31, 2026, as compared to 47.2% for the three months ended March 31, 2025. Our effective tax rate for the three months ended March 31, 2026 was higher than the statutory rate of 21% primarily due to the unfavorable impact of non-deductible stock compensation and the effect of state income taxes. For the three months ended March 31, 2025, our effective tax rate was higher than the statutory tax rate of 21% primarily due to discrete tax expenses for a change in prior year estimates, write-off of deferred tax assets associated with net shortfalls upon vesting of restricted stock units, forfeitures of non-qualified stock options and restricted stock units and the impact of those items on the lower book income for the three months ended March 31, 2025. Financial Condition, Liquidity and Capital Resources Overview Our primary recurring source of cash is the collection of proceeds from the sale of our products to our customers, including cash periodically collected in advance of delivery or performance. Our primary use of cash is for working capital and payment of our operating costs, which consist primarily of employee-related expenses as well as general operating expenses for marketing, fulfillment costs of customer orders, overhead costs, innovation, capital expenditures and debt servicing. We also utilize cash for strategic investments and acquisitions. Fluctuations in working capital are primarily caused by customer demand for our products, timing of when a retailer rearranges or restocks our products, timing of inventory purchases, and the amount and timing of our payables and expenses, including to implement our business transformation plan. Capital expenditures typically vary and are currently limited, and future capital expenditure requirements depend on strategic initiatives selected for the fiscal year, including investments in infrastructure and expansion of our customer base. Although international markets represented 52% of our net sales during the three months ended March 31, 2026, the majority of our bank deposits are held within the U.S. As of March 31, 2026, we had $326.2 million of cash and cash equivalents. In addition, as of March 31, 2026, we had borrowing capacity of $150.0 million under the 2022 Revolver, providing us with a liquidity position of $476.2 million plus $48.9 million of working capital excluding cash and cash equivalents for a combined $525.1 million total liquidity position. 25 Table of Contents Cash Flows The following table summarizes our cash flows for the periods presented: Three Months Ended March 31, (in thousands) 2026 2025 Net cash provided by (used in): Operating activities $ 7,499 $ (2,917) Investing activities (288) (996) Financing activities 227 (1,161) Net increase (decrease) in cash and cash equivalents $ 7,438 $ (5,074) Operating Activities Net cash provided by operating activities was $7.5 million for the three months ended March 31, 2026, primarily reflecting our net loss of $5.3 million, net of non-cash cost items and changes in operating working capital. Non-cash adjustments were primarily driven by amortization of other intangibles of $10.8 million, share-based compensation expense of $3.5 million and amortization of patent formulations of $2.4 million, partially offset by deferred taxes of $4.4 million. Changes in operating assets and liabilities decreased cash provided by operating activities by $0.8 million. Net cash used in operating activities was $2.9 million for the three months ended March 31, 2025, primarily reflecting our net income of $0.5 million, net of non-cash cost items and changes in operating working capital. Non-cash adjustments were primarily driven by amortization of other intangibles of $10.9 million, share-based compensation expense of $2.9 million, and amortization of patent formulations of $2.4 million. Changes in operating assets and liabilities decreased cash provided by operating activities by $21.4 million. Investing Activities Net cash used in investing activities was $0.3 million for the three months ended March 31, 2026 and was related to the purchase of property and equipment and the purchase and development of software. Net cash used in investing activities was $1.0 million for the three months ended March 31, 2025, primarily reflecting investments of $0.9 million related to the purchase and development of software. Financing Activities Net cash provided by financing activities was $0.2 million for the three months ended March 31, 2026 and consisted of proceeds from stock option exercises. Net cash used in financing activities was $1.2 million for the three months ended March 31, 2025, consisting of $1.7 million of principal payments for the 2022 Term Loan Facility, partially offset by proceeds of $0.5 million from stock option exercises. Liquidity and Capital Resources Requirements Based on past performance and current expectations, we believe that our cash, cash equivalents and cash generated from operations will be sufficient to meet anticipated operating costs, required payments of principal and interest, working capital needs, ordinary course capital expenditures, and other commitments over both the short term (the next twelve months) and long term. 26 Table of Contents If necessary, we may borrow funds under our 2022 Revolver to finance our liquidity requirements, subject to customary borrowing conditions. To the extent additional funds are necessary to meet our long-term liquidity needs as we continue to execute our business strategy, we anticipate that they will be obtained through the incurrence of additional indebtedness, equity financings or a combination of these potential sources of funds; however, such financing may not be available on favorable terms, or at all. Our ability to meet our operating, investing and financing needs depends, to a significant extent, on our future financial performance, which will be subject in part to general economic, competitive, financial, regulatory and other factors that are beyond our control, including those described in “Item 1A. - Risk Factors” in this Quarterly Report and in our 2025 Form 10-K. In addition to these general economic and industry factors, the principal factors in determining whether our cash flows will be sufficient to meet our liquidity requirements will be consumer demand for our products and our ability to continue providing innovative products to our customers and manage production and our supply chain. Merger Agreement Under the Merger Agreement, the Company has agreed to various customary covenants and agreements, including, among others, covenants to use commercially reasonable efforts to conduct its business in the ordinary course of business during the interim period between execution of the Merger Agreement and the consummation of the Merger. Outside of certain limited exceptions, the Company may not engage in or take specified actions during this period unless agreed to in writing by Parent, which include, among others: •Incurring or guaranteeing debt, except for intercompany arrangements and revolver borrowings capped at $20.0 million outstanding at any time; •Paying dividends or making distributions (other than upstream dividends among wholly owned subsidiaries); •Selling, pledging, or otherwise encumbering material assets (generally, dispositions and encumbrances of material non IP assets over $0.5 million in the aggregate are restricted, subject to ordinary-course and other exceptions), and disposing of material company-owned intellectual property other than in the ordinary course; •Making investments, loans, advances, or capital contributions to third parties above specified thresholds (generally restricted above $0.5 million in the aggregate, subject to ordinary-course employee expense advances and intercompany exceptions); •Making capital expenditures above $3.0 million per fiscal year (including authorizations and commitments); •Entering into, terminating, or materially amending material contracts in an adverse manner, or entering into new contracts that would be “material contracts” under the agreement; •Settling litigation above specified monetary thresholds (generally restricted above $0.5 million per matter or $2.5 million aggregate, net of reserves and insurance, and also restricted if it would impose equitable relief or include an admission); and •Taking other actions that could indirectly affect liquidity, including, without limitation, significant workforce actions that could trigger Worker Adjustment and Retraining Notification Act of 1988, as amended, obligations, material changes to the terms or pricing of commercial agreements outside the ordinary course of business, and amendments to certain tax elections, in each case absent any required consent or applicable-law requirement. 2022 Credit Facility As of March 31, 2026, we had outstanding indebtedness under the 2022 Credit Agreement of $354.8 million. As of March 31, 2026, we had $150.0 million of available borrowing capacity under the 2022 Revolver. The interest rate on outstanding amounts under the 2022 Term Loan Facility was 7.3% per annum as of March 31, 2026. We have not drawn on the 2022 Revolver as of March 31, 2026. The remaining balance under the 2022 Term Loan Facility is due at maturity. The maturity date of the 2022 Term Loan Facility is February 23, 2029, and the maturity date of the 2022 Revolver is February 23, 2027. 27 Table of Contents The 2022 Credit Agreement contains a number of covenants that, among other things, restrict the Company’s ability to (subject to certain exceptions) pay dividends and distributions or repurchase its capital stock, incur additional indebtedness, create liens on assets, engage in mergers or consolidations and sell or otherwise dispose of assets. The 2022 Credit Agreement also includes reporting, financial and maintenance covenants, including a springing first lien leverage ratio financial covenant that is applicable only to lenders under the 2022 Revolver. The Company was in compliance with these affirmative and negative covenants on March 31, 2026 and December 31, 2025. Substantially all the assets of the Company constitute collateral under the 2022 Credit Agreement. In order to limit our exposure to potential increases in future interest rates related to the 2022 Term Loan Facility, on May 7, 2024, we entered into the 2024 Interest Rate Cap in connection with the 2022 Term Loan Facility, with a notional amount of $400.0 million, which amortized to $200.0 million on July 31, 2025, at a strike rate of 5.00%. The 2024 Interest Rate Cap expires on July 31, 2026. We have designated the 2024 Interest Rate Cap as a cash-flow hedge for accounting purposes. See “Note 8 – Long-Term Debt” to the Company’s Condensed Consolidated Financial Statements of this Quarterly Report for additional information. Tax Receivable Agreement In connection with the Reorganization Transactions, we entered into the Tax Receivable Agreement under which we will be required to pay to the Pre-IPO Stockholders 85% of the federal, state or local tax cash savings that we actually realize on our taxable income following the IPO, as a result of the amortization of intangible assets and capitalized transaction costs that existed as of the date of the IPO. Under the Tax Receivable Agreement, generally we will retain the benefit of the remaining 15% of the applicable tax savings. The Tax Receivable Agreement liability is calculated based on current tax laws and the assumption that we and our subsidiaries earn sufficient taxable income to realize the full tax benefits subject to the Tax Receivable Agreement. Updates to our blended state tax rate, allocation of U.S. versus foreign sourced income and changes in U.S. tax rules may significantly impact the established liability, and changes would be recorded to Other expense (income), net in the period we made the determination. Concurrently with the execution and delivery of the Merger Agreement, the Company entered into the Tax Receivable Agreement Waiver and Amendment, pursuant to which certain Pre-IPO Stockholders irrevocably waived their rights to receive any remaining payments under the Tax Receivable Agreement. In addition, the Tax Receivable Agreement was amended to provide for its automatic termination upon the Effective Time, subject to the payment of certain amounts to non-waiving Pre-IPO Stockholders. If the Merger Agreement is terminated in accordance with its terms, the Tax Receivable Agreement Waiver and Amendment will be null and void ab initio and all obligations under the Tax Receivable Agreement will continue in full force and effect. See further discussion in “Note 1 – Nature of Operations and Basis of Presentation – Proposed Acquisition by Henkel US Operations Corporation” to the Company’s Condensed Consolidated Financial Statements of this Quarterly Report. If the Merger Agreement is terminated and as a result the Tax Receivable Agreement Waiver and Amendment becomes null and void, we expect that future payments under the Tax Receivable Agreement relating to the Pre-IPO Tax Assets could aggregate to $165.1 million, with payments expected to continue through 2038. Payments under the Tax Receivable Agreement, which began in the year ended December 31, 2022, are not conditioned upon the Pre-IPO Stockholders’ continued ownership of equity in the Company. Critical Accounting Estimates Our unaudited, interim Condensed Consolidated Financial Statements have been prepared in accordance with U.S. GAAP. The preparation of financial statements requires us to make estimates and assumptions about future events that affect amounts reported in our unaudited, interim Condensed Consolidated Financial Statements and related notes at the date of the financial statements. We evaluate our accounting estimates and judgments on an ongoing basis. We base our estimates and judgments on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions and conditions. For additional detail regarding our critical accounting estimates, see our discussion for the year ended December 31, 2025 in the 2025 Form 10-K. There have been no material changes to these critical accounting estimates in the three months ended March 31, 2026. 28 Table of Contents

Risk Factors

An investment in our common stock involves risks. Investors should carefully consider the risk factors discussed in Part I, “Item 1A. Risk Factors” in the 2025 Form 10-K, as supplemented by the risk factors set forth below, together with the other information contained in this Quarterly Report. The risks described in Part I, “Item 1A. Risk Factors” in the 2025 Form 10-K and below reflect our beliefs and opinions as to factors that could materially and adversely affect the Company and its securities in the future. If any of the following risks actually occurs, our business, prospects, operating results and financial condition could suffer materially, and the trading price of our common stock could decline. The risks and uncertainties described below and in the 2025 Form 10-K are not the only ones we face. Additional risks and uncertainties not currently known to us or those we currently view to be immaterial also may materially and adversely affect our business, prospects, operating results or financial condition. See “Special Note Regarding Forward-Looking Statements” of this Quarterly Report. The following risk factors supplement the risk factors discussed in Part I, “Item 1A. Risk Factors” in the 2025 Form 10-K. Risks Related to the Merger Failure to complete the Merger, or delays in completing the Merger, could materially adversely affect our business, financial condition, results of operations and stock price. The proposed Merger is subject to various closing conditions, including, among other things, the expiration or termination of the applicable waiting period under the HSR Act and the receipt of regulatory approvals under the laws of Germany, Australia and the United Kingdom, the mailing of the information statement on Schedule 14C and the expiration of a twenty-calendar-day waiting period thereafter, the absence of any law or governmental order prohibiting the Merger, and other customary closing conditions. It is possible that a governmental authority may enjoin or otherwise prohibit the consummation of the Merger, or that certain required regulatory approvals may not be obtained on a timely basis or at all. If any condition to the closing of the Merger is not satisfied or, if permissible, waived, the Merger will not be completed. In addition, satisfying the conditions to the closing of the Merger may take longer than we expect. Furthermore, during the period between now and completion of the Merger, our business, results of operations and financial condition may be adversely impacted by, or otherwise change as a result of, a variety of factors, and such changes could affect the likelihood, timing or perceived benefits of the Merger. The conditions to closing may not be satisfied or waived or other events may intervene to delay or result in the failure to consummate the Merger. In addition, the Merger Agreement may be terminated under certain circumstances, including if there has been a material breach by the Company of its representations, warranties or covenants or if a Company Material Adverse Effect (as defined in the Merger Agreement) has occurred since the signing of the Merger Agreement. If the Merger is not completed, our ongoing business may be adversely affected, and we will be subject to a number of risks, including the following: •we may be required to pay Parent a termination fee of $40,440,000 if the Merger Agreement is terminated under certain circumstances, and/or damages pursuant to the Merger Agreement; •the Merger Agreement places certain restrictions on the conduct of our business, which may delay or prevent us from undertaking business opportunities that, absent the Merger Agreement, may have been pursued; 30 Table of Contents •we will still be required to pay certain significant costs relating to the Merger, such as legal, accounting, financial advisory and printing fees; •if the Merger Agreement is terminated, the Tax Receivable Agreement Waiver and Amendment entered into in connection with the Merger may be null and void ab initio and our obligations under the Tax Receivable Agreement may continue in full force and effect; and •matters relating to the Merger (including integration planning) may require substantial commitments of time and resources by our management, which could otherwise have been devoted to other opportunities that may have been beneficial to the Company, in each case, without realizing any of the benefits of having completed the Merger, which may adversely affect our business and financial results. The market price of our Common Stock might decline materially as a result of any such failure to complete the Merger, to the extent that the current market prices reflect a market assumption that the Merger will be completed. If that were to occur, it is uncertain when, if ever, the price of our Common Stock would return to the price levels at which shares of our Common Stock currently trade. We may also be negatively impacted if the Merger Agreement is terminated and our Board seeks but is unable to find another business combination or strategic transaction offering equivalent or more attractive benefits than the benefits expected to be provided in the Merger. Our officers or members of our Board may also be subject to litigation related to entering into or failing to consummate the Merger. Uncertainty about the Merger may adversely affect our business and our relationships with employees, customers, suppliers and others with whom we do business, and the Merger may disrupt our current plans and operations or divert management’s attention away from ongoing business opportunities and operational matters. Uncertainty about the completion or effect of the Merger may affect the relationship between us and our employees, customers, manufacturers, suppliers, and other business partners which may have an adverse effect on our business, financial condition and results of operations. In addition, such uncertainty may disrupt our current plans and operations and may require a substantial commitment of time and resources by our management, which could otherwise have been devoted to other opportunities and operational matters. These uncertainties may cause customers, suppliers and others that deal with us to seek to change existing business relationships and to delay or defer decisions concerning us. Further, pursuant to the Merger Agreement, we are subject to certain restrictions during the pendency of the proposed transaction that may impact our ability to pursue certain business opportunities, strategic transactions or initiatives. Changes to existing business relationships, including termination or modification, could negatively affect our revenues, earnings and cash flow, as well as the market price of our Common Stock. In addition, we are dependent on the experience and industry knowledge of our officers, key management personnel and other key employees to operate our business and execute our business plans. Uncertainty regarding the Merger, including the possibility of a delay in consummation or that the Merger will not be consummated, as well as uncertainty about employee roles following the Merger, may have an adverse effect on our ability to attract or retain key management personnel and other key employees. Our business could be negatively impacted if key employees depart because of issues related to the uncertainty and difficulty of integration or a desire not to remain with the business if the Merger is not consummated, and it may be difficult to attract new employees to fill such roles due to uncertainty related to the Merger. Adverse effects arising from the pendency of the Merger could be exacerbated by any delays in consummation of the Merger or termination of the Merger Agreement. Any legal proceedings filed against us in connection with the Merger could delay or prevent the completion of the Merger. Transactions such as the Merger often give rise to lawsuits by stockholders or other third parties. One of the conditions to the closing of the Merger is that the consummation of the Merger is not then prohibited or made illegal by any law, order, injunction or decree. In connection with the Merger, plaintiffs may file lawsuits against us and/or our directors and officers. Such legal proceedings could also prevent or delay the completion of the Merger and result in additional costs. In addition, if any lawsuit is successful in obtaining an injunction prohibiting us or Parent from consummating the Merger on the agreed-upon terms, the injunction may prevent the Merger from being completed within the expected timeframe, or at all. If the Merger is prevented or delayed, the lawsuits could result in substantial costs, including any costs associated with the indemnification of directors. The defense or settlement of any lawsuit or claim that remains unresolved at the time the Merger is completed may adversely affect our business, financial condition or results of operations. 31 Table of Contents The Merger may involve regulatory risks. Consummation of the Merger is conditioned upon, among other things, the expiration or termination of the waiting period under the HSR Act and the receipt of approvals, waivers or the expiration of waiting, notice, approval or review periods under the laws of Germany, Australia and the United Kingdom. These regulatory approvals may not be obtained on a timely basis or at all, and the granting of such approvals could involve the imposition of conditions that could adversely affect the Company or cause the parties to abandon the Merger. Under the Merger Agreement, the initial outside date for completion of the Merger is March 31, 2027, and will be automatically extended to September 30, 2027 if regulatory approvals remain the sole unsatisfied condition as of the initial outside date. Delays in obtaining regulatory approvals could reduce the anticipated benefits of the Merger or result in additional costs. The Merger Agreement contains provisions that prevent the Company from accepting an alternative acquisition. As a result of the execution and delivery of a written consent adopting the Merger Agreement by certain investment funds affiliated with Advent International Corporation, which held approximately 75% of the issued and outstanding shares of common stock of Olaplex Holdings as of such date, the Company is not permitted to terminate the Merger Agreement to enter into an agreement for an alternative acquisition. The Merger Agreement also contains provisions that may discourage a third party from submitting an alternative proposal to us should the Merger not be consummated, which proposal might result in greater value to our stockholders than the Merger. Specifically, we may be required to pay to Parent a termination fee in cash equal to $40,440,000 under certain circumstances involving acquisition proposals for competing transactions during a specified period following termination of the Merger Agreement. If the Merger Agreement is terminated and we determine to seek another strategic transaction, we may not be able to negotiate a transaction on terms comparable to, or better than, the terms of the proposed Merger.

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Management's Discussion and Analysis

Quantitative and Qualitative Disclosures About Market Risk

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Risk Factors