You should read the following discussion and analysis together with our consolidated financial statements and the related notes thereto included elsewhere in this Annual Report. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business, 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, including, but not limited to, those discussed in the sections titled “Item 3.D. Key Information—Risk Factors” and “Special Note Regarding Forward-Looking Statements.” Company Overview We are a consumer tech platform that is built to transform the global beauty and wellness market. Our technology innovations, world-class physical product range, and compelling brands built to win online have enabled our accelerated global growth by delivering consumers what we believe to be a superior product and experience. Our platform supports a strong financial model that delivers a rare combination of scale, growth, and profitability. Our net revenue increased to $810 million in 2025 from $647 million and $509 million in 2024 and 2023. We achieved net income of $110.7 million, $101.5 million, and $58.5 million in 2025, 2024 and 2023, respectively. We achieved Adjusted EBITDA of $163.3 million in 2025, up from $150.5 million and $107.3 million in 2024 and 2023. 70 Table of Contents Since our initial public offering in 2023 we have maintained long-term financial targets of 20% annual revenue growth and 20% Adjusted EBITDA margin. We exceeded these targets every year as a public company, including 2025, 2024 and 2023. As previously disclosed, we have experienced a significant increase in customer acquisition costs that is adversely impacting our revenues and margins. We hope these elevated costs will eventually normalize and therefore we have not changed our long-term financial targets. However, we do not expect to achieve our long-term financial targets for so long as our customer acquisition costs remain elevated. See “Item 3.D. Key Information—Risk Factors— Risks Related to Our Business and Industry— The success of our business depends on our ability to attract new customers, retain existing customers, and maintain or increase sales to those customers. We have recently experienced difficulty acquiring new customers cost-efficiently and, if this difficulty continues, our business, financial condition, and results of operations will be adversely affected.” A.Operating Results Key Factors Affecting Our Performance We believe that our continued success and growth are dependent on a number of factors that provide both significant areas of opportunity as well as potential challenges. We have outlined some of these factors below, as well as in the section titled “Item 3.D. Key Information—Risk Factors.” Large and Attractive Addressable Market We operate in the highly attractive over $600 billion global beauty and wellness market as defined by the global beauty, personal care and dietary supplements market per Euromonitor, which is characterized by its large size, secular tailwinds, high growth, and compelling gross margin profile. Our Position at the Forefront of Industry Transformation We see two powerful pillars of disruption in the industry, and have positioned ODDITY to lead on both fronts. First, the consumer shift online, which we expect will emerge as the industry’s largest channel, growing to account for roughly 50% of sales. Second, the accelerated demand for high performance, effective products that solve consumers’ pain points. The ODDITY Technology and Data Platform Our business model is centered on our in-house technology capabilities, with leading expertise in data science, machine learning, and computer vision. We expect our technology roadmap, combined with our user base of approximately 68 million users and our rich, proprietary data sets, will define the future of beauty. We define a user as a visitor who has engaged with and interacted with our websites in a way that allows us to recognize their activity during a visit. We are a data-driven company and one of our significant differentiators is the vast amount of quality, actionable data that we are able to learn about our users. Data collected from users forms a critical component of our customer acquisition funnel as it enables us to efficiently convert users to customers, informs our brand and product roadmap, and improves our machine learning algorithms to more accurately predict product matches and develop new products. A Proven Brand Scaling Machine We have an excellent track record of launching and scaling online brands, starting with IL MAKIAGE in 2018, SpoiledChild in 2022 and METHODIQ in 2025. We have additional brands in development which we are building to lead in their respective markets. Successful Product Launches Our data-centric strategy and direct-to-consumer model allow us to create and deliver superior products for our customers. Product innovation across categories has been a key driver of our success. It drives our financial model through increased conversion, higher average order value, and repeat frequency. We believe our investment in molecule discovery with ODDITY LABS will deepen our competitive advantage in product development. 71 Table of Contents Expanding our Global Footprint Our upfront investments in technology allow us to scale in new markets quickly and with limited asset intensity. We had net revenue outside of the United States of $142.1 million, $100.3 million and $94.6 million for the years ended December 31, 2025, 2024 and 2023, respectively, accounting for approximately 18%, 15% and 19% of our net revenue for the years then ended, respectively. This international penetration level is below that of our large global competitors and provides significant room for growth. Attractive Unit Economics Dependent on Efficient Customer Acquisition and Repeat Purchases Through our technology platform we aim to efficiently bring visitors to our website, turn visitors into users by learning about them through engagement, leverage the data we have across the platform to convert those users into paying customers, and then convert customers into repeat customers. Through this virtuous cycle we have successfully gained share of our industry while increasing our share of customer wallet. We continue to aim to drive repeat behavior through strong customer satisfaction, improvements in data-driven personalization, product recommendations, customer service and engagement, in addition to new products and brand launches. Investment in Innovation and Technology Our success is dependent on our ability to sustain innovation and technology leadership to maintain our competitive advantage. We will continue to invest in our people, product and infrastructure to maintain and grow our consumer tech platform. We remain focused on developing our technology expertise across the full spectrum of engineering, architecture, infrastructure, data engineering, integrations, security, agile and project management, and information systems and planning. Seasonality Our revenue is typically highest in the first half of the calendar year, and our revenue will generally decline in the third and fourth quarter of each calendar year relative to the first and second quarter of each calendar year. Components of Results of Operations Net Revenue We generate net revenue primarily from sales of our beauty and wellness products through our online direct-to-consumer model. Net revenue represents the consideration we expect to be entitled to in exchange for the sale of our products, net of promotional discounts and estimated returns. Net revenue includes shipping fees charged to customers but excluding any sales or other taxes collected in connection with the sale. We recognize net revenue at the time control of our products is transferred to the customer, which is when the product is shipped to the customer, or for orders subject to a trial period, when the trial period lapses. Net revenue is primarily driven by the number of orders. Cost of Revenue Cost of revenue consists principally of the costs to procure our products, including the amounts invoiced by our third-party contract manufacturers and suppliers for inventory, as well as inbound and outbound shipping costs, duties and other related costs, and inventory write-offs. Cost of revenue also includes third-party fulfillment costs, warehousing, depreciation and amortization, and packaging costs. Our cost of goods sold has and may continue to fluctuate with the cost of raw materials used in our products. Gross Profit and Gross Margin Gross profit is our net revenue less cost of revenue. Gross margin measures our gross profit as a percentage of net revenue. We expect that gross profit will fluctuate and continue to be affected by various factors in the future, including the timing and mix of product and brand launches, commodity prices and transportation rates, manufacturing costs, and cost efficiency efforts. 72 Table of Contents Selling, General and Administrative Expenses Selling, general and administrative expenses primarily consist of marketing and advertising expenses, employee-related costs, including salaries, benefits, and share-based compensation, rent, software and product research and development costs, depreciation and amortization expenses, professional fees, payments processing fees, and other general expenses. We have recently incurred higher selling, general and administrative expenses due to a significant increase in our customer acquisition costs. If this trend continues, selling, general and administrative expenses will increase in absolute dollars more rapidly than they otherwise would. Financial Income, Net Financial income, net consists primarily of interest income on our bank deposits and marketable securities, offset by interest expense from the amortization of issuance costs related to the Exchangeable Notes, gains or losses on foreign currencies, mainly driven by liabilities denominated in currencies other than U.S. dollars, and realized gains and losses on the sale of investments. Taxes on Income Taxes on income mainly consist of current income taxes related to Israel and United States federal and state taxes, as well as changes in deferred tax assets and liabilities. Results of Operations The following tables set forth our results of operations for the periods presented in dollars and as a percentage of net revenue and should be reviewed in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report. Our historical results and period-to-period comparisons for any prior period are not necessarily indicative of results expected in any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ ​ % of net ​ ​ ​ ​ % of net ​ ​ ​ ​ % of net ​ ​ ​ ​ ​ (in thousands) ​ ​ ​ revenue ​ ​ ​ (in thousands) ​ ​ ​ revenue ​ ​ ​ (in thousands) ​ ​ ​ revenue Statements of Operations Data: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net revenue ​ $ 809,844 100 % $ 647,040 100.0 % $ 508,685 100.0 % Cost of revenue ​ 221,138 27.3 ​ 178,718 27.6 ​ 150,456 29.6 ​ Gross profit ​ 588,706 72.7 ​ 468,322 72.4 ​ 358,229 70.4 ​ Selling, general and administrative expenses ​ 469,936 58.0 ​ 352,722 54.5 ​ 283,911 55.8 ​ Operating income ​ 118,770 14.7 ​ 115,600 17.9 ​ 74,318 14.6 ​ Financial income, net ​ (16,935) (2.1) ​ (12,306) (1.9) ​ (4,283) (0.8) ​ Income before taxes on income ​ 135,705 16.8 ​ 127,906 19.8 ​ 78,601 15.4 ​ Taxes on income ​ 24,960 3.1 ​ 26,415 4.1 ​ 20,067 3.9 ​ Net income ​ $ 110,745 13.7 % $ 101,491 15.7 % $ 58,534 11.5 % ​ Comparison of Years Ended December 31, 2025 and 2024 Net Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2025 2024 ​ $ Change % Change ​ ​ (in thousands) ​ Net revenue ​ ​ ​ $ 809,844 ​ ​ ​ $ 647,040 ​ ​ ​ $ 162,804 ​ ​ ​ 25.2 % ​ Net revenue increased by $163 million, or 25.2%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase in net revenue was driven primarily by higher order volume. The return rate of 11.0% for the year ended December 31, 2025 was in line with the return rate of 10.9% for the year ended December 31, 2024. Online direct-to-consumer net revenue generated by ODDITY through its online platform represented 97% of net revenue for the year ended December 31, 2025, compared to 95% for the year ended December 31, 2024. Other net revenue, including revenue generated in Israel mostly via retail and through marketing affiliates, represented 3% of net revenue in 2025 and 5% of net revenue in 2024. 73 Table of Contents Cost of Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ 2024 ​ $ Change ​ % Change ​ ​ (in thousands) Cost of revenue ​ ​ ​ $ 221,138 ​ ​ ​ $ 178,718 ​ ​ ​ $ 42,420 ​ ​ ​ 23.7 % ​ Cost of revenue increased by $42 million, or 23.7%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase in cost of revenue was primarily attributable to increased orders partially offset by supply chain efficiencies and cost improvement efforts. Gross Profit and Gross Margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ 2024 ​ $ Change ​ % Change ​ ​ (in thousands) Gross profit ​ ​ ​ $ 588,706 ​ ​ ​ $ 468,322 ​ ​ ​ $ 120,384 ​ ​ ​ 25.7 % Gross margin ​ 72.7 % 72.4 % ​ 0.3 % ​ Our gross profit increased by $120 million, or 25.7%, for the year ended December 31, 2025 compared to the year ended December 31, 2024 as a result of the growth in our net revenue. Our gross margin increased 0.3% to 72.7% in the year ended December 31, 2025 compared to 72.4% in the year ended December 31, 2024. Our gross margin increase was largely driven by supply chain efficiencies and cost improvement efforts. Selling, General and Administrative Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ 2024 ​ $ Change ​ % Change ​ ​ (in thousands) Selling, general and administrative expenses ​ ​ ​ $ 469,936 ​ ​ ​ $ 352,722 ​ ​ ​ $ 117,214 ​ ​ ​ 33.2 % ​ Selling, general and administrative expenses increased by $117 million, or 33.2%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. This increase was primarily due to an increase of $81 million in advertising costs to support sales growth. Selling, general and administrative expenses for the year ended December 31, 2025 were also impacted by increased investment related to growth initiatives, including ODDITY LABS and future brands. Stock-based compensation expense was $33.9 million for the year ended December 31, 2025, compared to stock-based compensation expense of $25.0 million for the year ended December 31, 2024. Financial Income, Net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ 2024 ​ $ Change ​ % Change ​ ​ (in thousands) Financial income, net ​ ​ ​ $ (16,935) ​ ​ ​ $ (12,306) ​ ​ ​ $ (4,629) ​ ​ ​ 37.6 % ​ Financial income, net increased by $4.6 million, or 37.6%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was primarily attributable to interest on higher cash balances and marketable securities, partly offset by interest expense related to the amortization of issuance costs related to the Exchangeable Notes. See the section titled “Item 5.B. Operating and Financial Review and Prospects—Liquidity and Capital Resources” below. Taxes on Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ 2024 ​ $ Change ​ % Change ​ ​ (in thousands) Taxes on income ​ ​ ​ $ 24,960 ​ ​ ​ $ 26,415 ​ ​ ​ $ (1,455) ​ ​ ​ (5.5) % ​ 74 Table of Contents Taxes on income decreased by $1.5 million, or 5.5%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The decrease was primarily driven by a decrease in certain uncertain tax positions and a discrete tax benefit related to share-based compensation. As a result, the effective tax rate decreased to 18.4% for the year ended December 31, 2025 from 20.7% for the year ended December 31, 2024 primarily reflecting these items. Comparison of Years Ended December 31, 2024 and 2023 Net Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ $ Change ​ % Change ​ ​ (in thousands) Net revenue ​ ​ ​ $ 647,040 ​ ​ ​ $ 508,685 ​ ​ ​ $ 138,355 ​ ​ ​ 27.2 % ​ Net revenue increased by $138.4 million, or 27.2%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase in net revenue was driven primarily by increased orders.The return rate decreased to 10.9% for the year ended December 31, 2024 compared to 12.0% for the year ended December 31, 2023. Online direct-to-consumer net revenue generated by ODDITY through its online platform represented 95% of net revenue for the year ended December 31, 2024, compared to 94% for the year ended December 31, 2023. Other net revenue, including revenue generated in Israel and through marketing affiliates, represented 5% of net revenue in 2024 and 6% of net revenue in 2023. Cost of Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ $ Change ​ % Change ​ ​ (in thousands) Cost of revenue ​ ​ ​ $ 178,718 ​ ​ ​ $ 150,456 ​ ​ ​ $ 28,262 ​ ​ ​ 18.8 % ​ Cost of revenue increased by $28.3 million, or 18.8%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase in cost of revenue was primarily attributable to increased orders partially offset by supply chain efficiencies and cost improvement efforts. Gross Profit and Gross Margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ $ Change ​ % Change ​ ​ (in thousands) Gross profit ​ ​ ​ $ 468,322 ​ ​ ​ $ 358,229 ​ ​ ​ $ 110,093 ​ ​ ​ 30.7 % Gross margin ​ 72.4 % 70.4 % ​ 2.0 % ​ Our gross profit increased by $110.1 million, or 30.7%, for the year ended December 31, 2024 compared to the year ended December 31, 2023 as a result of the growth in our net revenue. Our gross margin increased 2.0% to 72.4% in the year ended December 31, 2024 compared to 70.4% in the year ended December 31, 2023. Our gross margin increase was largely driven by supply chain efficiencies and cost improvement efforts. Selling, General and Administrative Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ $ Change ​ % Change ​ ​ (in thousands) Selling, general and administrative expenses ​ ​ ​ $ 352,722 ​ ​ ​ $ 283,911 ​ ​ ​ $ 68,811 ​ ​ ​ 24.2 % ​ Selling, general and administrative expenses increased by $68.8 million, or 24.2%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. This increase was primarily due to an increase of $38.7 million in advertising costs to support sales growth. Selling, general and administrative expenses for the year ended December 31, 2024 were also impacted by increased investment related to growth initiatives, including ODDITY LABS and future brands. Stock-based compensation expense was $25.0 million for the year ended December 31, 2024, compared to stock-based compensation expense of $24.1 million for the year ended December 31, 2023. 75 Table of Contents Financial Income, Net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ $ Change ​ % Change ​ ​ (in thousands) Financial income, net ​ ​ ​ $ (12,306) ​ ​ ​ $ (4,283) ​ ​ ​ $ (8,023) ​ ​ ​ 187.3 % ​ Financial income, net increased by $8.0 million, or 187.3%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was primarily attributable to interest on bank deposits and marketable securities. See the section titled “Item 5.B. Operating and Financial Review and Prospects—Liquidity and Capital Resources” below. Taxes on Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ $ Change ​ % Change ​ ​ (in thousands) Taxes on income ​ ​ ​ $ 26,415 ​ ​ ​ $ 20,067 ​ ​ ​ $ 6,348 ​ ​ ​ 31.6 % ​ Taxes on income increased by $6.3 million, or 31.6%, for the year ended December 31, 2024, compared to the year ended December 31, 2023. The increase was primarily driven by higher earnings before tax. The effective tax rate decreased to 20.7% for the year ended December 31, 2024 from 25.5% for the year ended December 31, 2023 due in part to a decrease in non-deductible expenses. Non-GAAP Financial Measures We regularly review certain non-GAAP financial measures to evaluate our business, measure our performance, identify trends, prepare financial projections and make business decisions. The information set forth below should be considered in addition to, not as a substitute for or in isolation from, our financial measures prepared in accordance with U.S. GAAP. Other companies, including companies in our industry, may calculate these measures differently or not at all, which reduces their usefulness as comparative measures. A reconciliation of the non-GAAP financial measures, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted operating income and Adjusted net income to the most directly comparable financial measures calculated in accordance with U.S. GAAP is set forth below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ 2024 ​ 2023 Non-GAAP Financial Measures ​ (in thousands) Adjusted EBITDA ​ ​ ​ $ 163,348 ​ ​ ​ $ 150,449 ​ ​ ​ $ 107,334 ​ Adjusted EBITDA margin ​ 20.2 % 23.3 % 21.1 % Adjusted operating income ​ $ 152,661 ​ $ 140,622 ​ $ 98,729 ​ Adjusted net income ​ $ 136,295 ​ $ 121,345 ​ $ 76,713 ​ ​ Adjusted EBITDA and Adjusted EBITDA Margin Adjusted EBITDA is defined as net income before financial income, net, taxes on income, and depreciation and amortization as further adjusted to exclude share-based compensation expense, and non-recurring adjustments. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by net revenue. We have provided below a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure presented in accordance with U.S. GAAP. 76 Table of Contents We believe Adjusted EBITDA and Adjusted EBITDA margin are useful for financial and operational decision-making and as a means to evaluate period-to-period comparisons. By excluding certain items that may not be indicative of our recurring core operating results, we believe that Adjusted EBITDA and Adjusted EBITDA margin provide meaningful supplemental information regarding our performance. In addition, Adjusted EBITDA and Adjusted EBITDA margin are widely used by investors and securities analysts to measure a company’s operating performance without regard to items such as depreciation and amortization, interest expense, and interest income, which can vary substantially from company to company depending on their financing and capital structures and the method by which their assets were acquired. However, these non-GAAP measures also have limitations as analytical tools, and you should not consider these measures as a substitute for or in isolation from, our financial results prepared in accordance with U.S. GAAP. For example, Adjusted EBITDA does not reflect: (i) interest expense or income or the cash requirements necessary to service interest or principal payments on debt, which reduces the cash available to us, (ii) tax payments that may represent a reduction in cash available to us, (iii) non-cash charges for depreciation of property and equipment and amortization of intangible assets, even though the assets being depreciated and amortized may have to be replaced in the future and would require cash capital expenditure requirements for such replacements or for new capital expenditure requirements, or (iv) share-based compensation expense, which is expected to be a recurring expense for our business. Other companies, including companies in our industry, may calculate Adjusted EBITDA and Adjusted EBITDA margin differently or not at all, which reduces their usefulness as comparative measures. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ 2024 ​ 2023 ​ ​ (in thousands) Net Income ​ ​ ​ $ 110,745 ​ ​ ​ $ 101,491 ​ ​ ​ $ 58,534 ​ Financial income, net ​ (16,935) ​ (12,306) ​ (4,283) ​ Taxes on income ​ 24,960 ​ 26,415 ​ 20,067 ​ Depreciation and amortization ​ 10,687 ​ 9,827 ​ 8,605 ​ Share-based compensation ​ 33,891 ​ 25,022 ​ 24,111 ​ Non-recurring adjustments ​ — ​ — ​ 300 ​ Adjusted EBITDA ​ $ 163,348 ​ $ 150,449 ​ $ 107,334 ​ Net income margin ​ 13.7 % 15.7 % 11.5 % Adjusted EBITDA margin ​ 20.2 % 23.3 % 21.1 % ​ Adjusted Operating Income Adjusted operating income is defined as operating income adjusted for the impact of share-based compensation and non-recurring adjustments. We believe the presentation of Adjusted operating income is useful because it is frequently used by analysts, investors and other interested parties to evaluate companies in our industry. Further, we believe this measure is helpful in highlighting trends in our operating results, because it excludes the impact of items that are outside the control of management or not reflective of our ongoing operations and performance. However, this measure also has limitations, including that other companies (including those in our industry) may calculate adjusted operating income differently or not at all, which reduces its usefulness as a comparative measure. You should not consider this measure as a substitute for or in isolation from, our financial results prepared in accordance with U.S. GAAP. We have provided below a reconciliation of Adjusted operating income to operating income, the most directly comparable financial measure presented in accordance with U.S. GAAP. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ 2024 ​ 2023 ​ ​ (in thousands) Operating income ​ ​ ​ $ 118,770 ​ ​ ​ $ 115,600 ​ ​ ​ $ 74,318 Share-based compensation ​ 33,891 ​ 25,022 ​ 24,111 Non-recurring adjustments ​ — ​ — ​ 300 Adjusted operating income ​ $ 152,661 ​ $ 140,622 ​ $ 98,729 ​ 77 Table of Contents Adjusted Net Income Adjusted net income is defined as net income adjusted for the impact of share-based compensation, non-recurring adjustments, one-time tax gains/losses and the tax effect of Non-GAAP adjustments. We believe the presentation of Adjusted net income is useful because it is frequently used by analysts, investors and other interested parties to evaluate companies in our industry. Further, we believe this measure is helpful in highlighting trends in our operating results, because it excludes the impact of items that are outside the control of management or not reflective of our ongoing operations and performance. However, this measure also has limitations, including that other companies (including those in our industry) may calculate adjusted net income differently or not at all, which reduces its usefulness as a comparative measure. You should not consider this measure as a substitute for or in isolation from, our financial results prepared in accordance with U.S. GAAP. We have provided below a reconciliation of Adjusted net income to net income, the most directly comparable financial measure presented in accordance with U.S. GAAP. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ 2025 ​ 2024 ​ 2023 ​ ​ (in thousands) Net income ​ ​ ​ $ 110,745 ​ ​ ​ $ 101,491 ​ ​ ​ $ 58,534 Share-based compensation ​ 33,891 ​ 25,022 ​ 24,111 Non-recurring adjustments ​ — ​ — ​ 300 Tax adjustments(1) ​ (8,341) ​ (5,168) ​ (6,232) Adjusted net income ​ $ 136,295 ​ $ 121,345 ​ $ 76,713 (1) Represents the tax impact of (a) the reconciling items above and (b) other discrete tax items. ​ B. Liquidity and Capital Resources Since inception, we have financed operations primarily through revenue from operations. As of December 31, 2025, we had $776 million of cash and cash equivalents, restricted cash, short-term deposits and marketable securities. Indebtedness 2026 Credit Facilities In January 2026, amendments to our existing agreements under the 2025 Credit Facilities became effective. Pursuant to these amendments, we secured aggregate credit facilities of $350 million, which provide for the drawdown of long-term loans maturing on January 14, 2031 (collectively, the “2026 Credit Facilities”). The 2026 Credit Facilities replace the 2025 Credit Facilities and are available for drawdown over a period of three years, through January 14, 2029. Borrowings under the 2026 Credit Facilities will accrue interest at a percentage rate per annum equal to SOFR + 2.7%. An annual commitment fee of 0.3% will apply to any unused portion of the 2026 Credit Facilities. The obligations of the Company under the 2026 Credit Facilities are subject to a negative pledge by the Company and are guaranteed by certain of the Company’s subsidiaries. The 2026 Credit Facilities contain customary affirmative and negative covenants, as well as a financial covenant requiring the Net Debt-to-EBITDA ratio of the Company to not exceed 4x. The 2026 Credit Facilities are governed by Israeli law. The 2026 Credit Facilities are currently undrawn. Exchangeable Notes In June 2025, Oddity Finance LLC (“Oddity Finance”), one of our wholly-owned subsidiaries, completed a private offering of $600 million aggregate principal amount of 0% Exchangeable Senior Notes due 2030. The Exchangeable Notes are unsecured and fully and unconditionally guaranteed by ODDITY Tech Ltd. and IM Pro Makeup NY L.P., one of our wholly-owned subsidiaries and the direct parent of Oddity Finance. The Exchangeable Notes are scheduled to mature on June 15, 2030, unless earlier exchanged, redeemed or repurchased. 78 Table of Contents The Exchangeable Notes may be exchanged for our Class A ordinary shares at an initial exchange rate of 10.8655 Class A ordinary shares per $1,000 principal amount of Exchangeable Notes. The initial exchange rate is subject to adjustment, as provided in the Indenture. Prior to the close of business on the business day immediately preceding March 15, 2030, the Exchangeable Notes will be exchangeable at the option of the noteholders only upon the satisfaction of specified conditions and during certain periods. On or after March 15, 2030, until the close of business on the second scheduled trading day immediately preceding the maturity date, the Exchangeable Notes will be exchangeable at the option of the noteholders at any time regardless of these conditions or periods. We may redeem for cash all or any portion of the Exchangeable Notes, at our option, on or after June 20, 2028, if the last reported sale price of our Class A ordinary shares has been at least 130% of the exchange price then in effect for at least 20 trading days (whether or not consecutive), during any 30 consecutive trading day period at a redemption price equal to 100% of the principal amount of the Exchangeable Notes to be redeemed, plus accrued and unpaid special interest, if any, to, but excluding, the redemption date. No sinking fund is provided for the Exchangeable Notes. Subject to certain conditions and exceptions, holders of the Exchangeable Notes will have the right to require us to repurchase all or a portion of their Exchangeable Notes upon the occurrence of a fundamental change (as defined in the Indenture) at a repurchase price of 100% of their principal amount plus any accrued and unpaid special interest, if any, to, but excluding, the fundamental change repurchase date. In addition, following certain corporate events or if we deliver a notice of redemption with respect to the Exchangeable Notes, we will, under certain circumstances, increase the exchange rate for noteholders who elect to exchange their Exchangeable Notes in connection with any such corporate event or exchange their Exchangeable Notes called (or deemed called) for redemption in connection with such notice of redemption during the related redemption period. As of December 31, 2025, all $600 million aggregate principal amount of our Exchangeable Notes remained outstanding. In connection with the pricing of the Exchangeable Notes and with the exercise in full by the initial purchasers of their option to purchase additional Exchangeable Notes, Oddity Finance entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain of the initial purchasers or their respective affiliates and certain other financial institutions. The Capped Call Transactions are expected generally to reduce the potential dilution to our Class A ordinary shares upon any exchange of Exchangeable Notes and/or offset any cash payments we are required to make in excess of the principal amount of exchanged Exchangeable Notes, as the case may be, with such reduction and/or offset subject to a cap initially equal to $138.92 per Class A ordinary share and subject to certain adjustments under the terms of the Capped Call Transactions. 2025 Credit Facilities In January 2025, we entered into credit facility agreements with a syndicate of three banks, Bank Leumi, Discount Bank and Bank Hapoalim, providing for aggregate credit facilities of up to $200 million (the “2025 Credit Facilities”). Borrowings under the 2025 Credit Facilities bore interest at a per annum rate equal to SOFR + 3.1% for borrowings of up to $130 million for a period of one year; SOFR + 2.6% for fixed revolving loans with a term of less than one year; and Prime + 0.1% for on-call borrowings denominated in NIS. An annual commitment fee of 0.29% applied to any unused portion of the 2025 Credit Facilities. The 2025 Credit Facilities replaced the 2024 Credit Facilities and were available for drawdown for a period of one year. The obligations of the Company under the 2025 Credit Facilities were subject to a negative pledge by the Company and were guaranteed by certain of the Company’s subsidiaries. The 2025 Credit Facilities contained customary affirmative and negative covenants, as well as financial covenants requiring the Company’s shareholders’ equity ratio to not fall below 20% at any time and the Company’s Net Debt-to-EBITDA ratio to not exceed 3.0x. The 2025 Credit Facilities were governed by Israeli law. The 2025 Credit Facilities were not utilized and were replaced in full by the 2026 Credit Facilities in January 2026. 2024 Credit Facilities In January 2024, we entered into credit facility agreements with two banks, Bank Leumi and Bank Hapoalim, providing for aggregate credit facilities of up to $100 million (the “2024 Credit Facilities”). Borrowings under the 2024 Credit Facilities bore interest at a per annum rate equal to SOFR + 2.7% for borrowings of up to $70 million for a period of one year; SOFR + 3.5% for fixed revolving loans with a term of less than one year; and Prime + 0.1% for on-call borrowings denominated in NIS. An annual commitment fee of 0.32% applied to any unused portion of the 2024 Credit Facilities. The obligations of the Company under the 2024 Credit Facilities were subject to a negative pledge by the Company and were guaranteed by certain of the Company’s subsidiaries. The 2024 Credit Facilities contained customary affirmative and negative covenants, as well as financial covenants requiring the Company’s shareholders’ equity ratio to not fall below 20% at any time and the Company’s Net Debt-to-EBITDA ratio to not exceed 3.0x. The 2025 Credit Facilities were governed by Israeli law. 79 Table of Contents The 2024 Credit Facilities were not utilized and were replaced in full by the 2025 Credit Facilities in January 2025. 2020 Credit Facility In April 2020, we entered into a loan agreement with Bank Hapoalim, denominated in NIS, pursuant to which we borrowed an aggregate principal amount of NIS 5 million (approximately $1.4 million according to the applicable exchange rate as of December 31, 2023) (the “2020 Credit Facility”). The principal amount of the 2020 Credit Facility bore interest at a floating per annum rate equal to prime plus 1.5%. The 2020 Credit Facility had a maturity date of April 2025. As of December 31, 2023, we had repaid all amounts outstanding under the 2020 Credit Facility and the facility was subsequently terminated. 2016 Credit Line In May 2016, we entered into a credit line agreement with Bank Hapoalim (the “2016 Credit Line”), denominated in NIS, pursuant to which we could withdraw an aggregate principal amount of up to NIS 25 million (approximately $6.9 million according to the applicable exchange rate as of December 31, 2023). The principal amount bore interest at a floating per annum rate equal to prime plus 1.4%, and we paid an additional annual fee of 0.4% of the unused credit line. The 2016 Credit Line had a maturity date of one year which was automatically renewed on a yearly basis. As of December 31, 2023, we had repaid all amounts outstanding under the 2016 Credit Line and the agreement was subsequently terminated. The loans made under the 2016 Credit Line and 2020 Credit Facility were secured by a floating charge on our assets and liens on deposit in the amount of $2.0 million. These credit facilities also included a requirement to report our financial statements and other financial information, as would be requested from time to time. Sufficiency of Capital We believe that our existing cash and cash equivalents and positive cash flows from operations will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months. Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our rate of revenue growth, the timing and extent of brand launches, expansion efforts and other growth initiatives, the expansion of our marketing activities, and overall economic conditions. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in additional dilution to our stockholders. The incurrence of additional debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations. There can be no assurances that we will be able to raise additional capital when needed or on terms acceptable to us. The inability to raise capital if needed or on terms acceptable to us would adversely affect our ability to achieve our business objectives. For more information, see the section titled “Item 3.D. Risk Factors—Risks Related to Our Business and Industry—We may need additional capital, and we cannot be sure that additional financing will be available on favorable terms, if at all.” Cash Flows The following table summarizes our cash flows for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31 ​ ​ 2025 ​ 2024 ​ 2023 ​ ​ (in thousands) Cash provided by operating activities ​ ​ ​ $ 87,581 ​ ​ ​ $ 137,764 ​ ​ ​ $ 87,455 Cash (used in) provided by investing activities ​ (267,248) ​ 1,352 ​ (139,991) Cash provided by (used in) financing activities ​ 531,348 ​ (127,299) ​ 48,811 Effect of exchange rate fluctuations on cash and cash equivalents ​ 251 ​ (236) ​ (623) Net increase (decrease) in cash, cash equivalents and restricted cash ​ $ 351,932 ​ $ 11,581 ​ $ (4,348) ​ 80 Table of Contents Operating Activities Our largest source of operating cash is cash collected from sales of our products to our customers. Our primary uses of cash from operating activities are for marketing expenses, personnel expenses, and general and administrative expenses. Net cash provided by operating activities decreased to $87.6 million for the year ended December 31, 2025, compared to $137.8 million for the year ended December 31, 2024, primarily due to inventory investments to support growth, inventory investments to support the launch of METHODIQ and increases in certain prepaid expenses, partially offset by increased net income. Our net cash provided by operating activities for the years ended December 31, 2025 and 2024 consisted of $110.7 million and $101.5 million of net income, adjusted for $45.1 million and $33.6 million of non-cash expenses and $(68.2) million and $2.7 million of net cash (used in) provided as a result of changes in operating assets and liabilities, respectively. For the year ended December 31, 2025, non-cash charges included principally $10.7 million of depreciation and amortization and $33.9 million of share-based compensation. For the year ended December 31, 2024, the non-cash charges included principally $9.8 million of depreciation and amortization and $25.0 million of share-based compensation. The changes in operating assets and liabilities were primarily driven by an increase in inventory and prepaid expenses and other receivables. Net cash provided by operating activities increased to $137.8 million for the year ended December 31, 2024, compared to $87.5 million for the year ended December 31, 2023, primarily due to an increase in net revenue and higher gross margins, leading to an increase in net income adjusted for certain non-cash expenses and change in working capital. Our net cash provided by operating activities for the years ended December 31, 2024 and 2023 consisted of $101.5 million and $58.5 million of net income, adjusted for $33.6 million and $32.2 million of non-cash expenses and $2.7 million and $(3.2) million of net cash provided (used in) as a result of changes in operating assets and liabilities, respectively. For the year ended December 31, 2024, the non-cash charges included principally $9.8 million of depreciation and amortization and $25.0 million of share-based compensation. For the year ended December 31, 2023, non-cash charges included principally $8.6 million of depreciation and amortization and $24.1 million of share-based compensation. The changes in operating assets and liabilities were primarily driven by an increase in trade payables and other accounts payable, partially offset by an increase in inventory and prepaid expenses and other receivables. Investing Activities Net cash used in investing activities for the year ended December 31, 2025 was $267.2 million, compared to $1.4 million provided by investing activities for the year ended December 31, 2024. The $267.2 million of net cash used in investing activities in the year ended December 31, 2025 was primarily related to a $298.9 million investment in marketable securities and $3.9 million related to capital expenditures, partially offset by a $48 million net change in short-term deposits. Net cash provided by investing activities for the year ended December 31, 2024 was $1.4 million, compared to $140.0 million used in investing activities for the year ended December 31, 2023. The $1.4 million of net cash provided by investing activities in the year ended December 31, 2024 was primarily related to a $30.0 million net change in short-term deposits, partially offset by a $18.5 million investment in marketable securities and $3.3 million related to capital expenditures. Financing Activities Net cash provided by financing activities was $531.3 million for the year ended December 31, 2025, compared to $127.3 million used in financing activities for the year ended December 31, 2024. The $531.3 million of net cash provided by financing activities was primarily related to $582.5 million of net proceeds from the issuance of our Exchangeable Notes, and $12.2 million proceeds from exercise of options, partially offset by $63.4 million incurred to purchase the capped call options pursuant to the Capped Call Transactions, inclusive of related transaction costs. Net cash used in financing activities was $127.3 million for the year ended December 31, 2024, compared to $48.8 million used in financing activities for the year ended December 31, 2023. The $127.3 million of net cash used in financing activities was primarily related to $147.3 million purchase of treasury shares, partially offset by $19.0 million proceeds from exercise of options. 81 Table of Contents Contractual Obligations The following table summarizes our material contractual obligations as of December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less ​ ​ ​ ​ ​ ​ ​ More ​ ​ ​ ​ ​ than ​ ​ ​ ​ ​ ​ ​ than ​ ​ Total ​ 1 Year ​ 1 - 3 Years ​ 3 - 5 Years ​ 5 Years ​ ​ (in thousands) Exchangeable Notes(1) ​ $ 600,000 ​ $ — ​ $ — ​ $ 600,000 ​ $ — Operating lease commitments ​ ​ ​ ​ 29,078 ​ ​ ​ ​ 7,956 ​ ​ ​ ​ 10,092 ​ ​ ​ ​ 7,720 ​ ​ ​ ​ 3,310 Severance pay obligations(2) ​ 3,423 ​ — ​ — ​ — ​ — Total contractual obligations ​ $ 632,501 ​ $ 7,956 ​ $ 10,092 ​ $ 607,720 ​ $ 3,310 (1) Consists of principal on our 0% Exchangeable Notes due June 15, 2030. (2) Severance pay obligations to our Israeli employees, as required under Israeli labor law, are payable only upon termination, retirement or death of the respective employee. See the section titled “Item 6.C. Directors, Senior Management and Employees—Board Practices—Employment and Consulting Agreements with Executive Officers.” These obligations are partially funded through accounts maintained with financial institutions and recognized as an asset on our balance sheet. Of this amount, $0.75 million is unfunded. Other contract obligations include various non-cancelable purchase obligations and agreements with minimum spend commitments entered into in the ordinary course of business, each of which is individually immaterial. Off-Balance Sheet Obligations As of December 31, 2025, we had not entered into any material off-balance sheet arrangements. Capital Expenditures Our capital expenditures amounted to approximately $3.9 million for the year ended December 31, 2025, approximately $3.3 million for the year ended December 31, 2024 and approximately $2.1 million for the year ended December 31, 2023. Our historical capital expenditures are primarily related to expenditures associated with our headquarters, retail leasehold improvements, as well as other office expenses. We expect that cash from operating activities and financing activities will be used to meet our capital expenditure needs in the foreseeable future. C. Research and Development, Patents and Licenses We have made, and will continue to make, significant investments in research and development and technology in an effort to improve our product offerings and enhance our customer experience. We review and target our research and development activities on an ongoing basis based on the needs of our business. D. Trend Information For a discussion of the trends that affect our business, financial condition and results of operations, see the sections titled “Item 3.D. Key Information—Risk Factors” and “Item 5.A. Operating and Financial Review and Prospects—Operating Results.” E. Critical Accounting Estimates We believe that the following accounting policies involve a high degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of our operations. See Note 2 to our consolidated financial statements included elsewhere in this Annual Report for a description of our other significant accounting policies. The preparation of our financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the amounts reported in those financial statements and accompanying notes. Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates. 82 Table of Contents Revenue Recognition Our primary source of revenue is from the sales of our products through our online direct-to-consumer model. We determine revenue recognition in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“Topic 606”). To determine revenue recognition, we perform the following five step analysis: ● identify the contract(s) with a customer; ● identify the performance obligations of the contract(s); ● determine the transaction price; ● allocate the transaction price to the performance obligations in the contract(s); ● and recognize revenue when (or as) we satisfy a performance obligation. Under Topic 606, we recognize revenue when our customers obtain control of promised goods or services. Net revenue reflects the consideration that we expect to receive in exchange for those goods or services, net of promotional discounts and estimated returns. Shipping fees charged to customers are reported within net revenue. Sales and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. We recognize revenue at the time control of the products passes to the customer, which is at the time of shipment. The Company also offers a “Try Before You Buy” program, which allows some of its customers to order certain products and pay for the products after the trial period ends. Under ASC 606 we recognize revenue for orders placed under the program when the trial period lapses. Our shipping and handling costs are fulfillment costs and such amounts are classified as part of cost of sale. Internal Use Software Development Costs We capitalize certain costs related to the development of our platform and other software applications. In accordance with authoritative guidance, we begin to capitalize our costs to develop software when preliminary development efforts are successfully completed, management has authorized and committed project funding, it is probable that the project will be completed and the software will be used as intended, and certain functional and quality standards have been met. We stop capitalizing these costs when the software is substantially complete and ready for its intended use, including the completion of all significant testing. These costs are amortized on a straight-line basis over the estimated useful life of the related asset, beginning with the time when it is ready for the intended use, generally estimated to be three to five years. Costs incurred prior to meeting these criteria together with costs incurred for training and maintenance are expensed as incurred and recorded within selling, general and administrative expenses in our consolidated statement of comprehensive income. We exercise judgment in determining the point at which various projects may be capitalized, in assessing the ongoing value of the capitalized costs and in determining the estimated useful lives over which the costs are amortized. To the extent that we change the manner in which we develop and test new features and functionalities related to our platform, assess the ongoing value of capitalized assets or determine the estimated useful lives over which the costs are amortized, the amount of internal-use software development costs we capitalize and amortize could change in future periods. Inventory Inventory costs include costs incurred to bring inventory to its current condition, including materials, manufacturing costs, inbound freight, duties and other costs. We value our inventory at cost, using an average costing method. Net realizable value is estimated based upon assumptions made about future demand and market conditions. If we determine that the estimated net realizable value of our inventory is less than the carrying value of such inventory, a charge to cost of goods sold is recorded to reflect the lower of cost or net realizable value. If actual market conditions are less favorable than those we project, further adjustments may be required that would increase the cost of goods sold in the period in which such a determination was made. 83 Table of Contents Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and are recorded net on the face of the balance sheet. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We recognize the effect of income tax positions only if those positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Deferred tax assets are recognized to the extent it is believed that these assets are more likely than not to be realized. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that we will realize the benefits of these deductible differences, net of the valuation allowance. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced. Judgment is required in determining our uncertain tax positions. We continuously review issues raised in connection with all ongoing examinations and open tax years to evaluate the adequacy of our tax liabilities. We evaluate uncertain tax positions under a two-step approach. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% (cumulative basis) likely to be realized upon ultimate settlement. We believe our recorded tax liabilities are adequate to cover all open tax years based on our assessment. This assessment relies on estimates and assumptions and involves significant judgments about future events. To the extent our views change, any adjustments in recognition or measurement are reflected in the period in which the change in judgment occurs. We record interest related to unrecognized tax benefits as tax expense.