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OLAPLEX HOLDINGS, INC. (OLPX)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 net sales were $106.3M, up 2.3% YoY, with strength in Professional (+12.1%) and DTC (+12.8%) offset by Specialty Retail (-16.7%) weakness; GAAP diluted EPS was -$0.01 as SG&A rose, including $8.1M of litigation costs .
  • Against S&P Global consensus, revenue beat ($106.3M vs $100.3M*) while EPS missed (-$0.01 vs $0.012*); gross margin outperformed consensus as adjusted gross profit margin reached 73.2%* .
  • FY25 guidance was reiterated: net sales $410–$431M, adjusted gross margin 70.5%–71.5%, adjusted EBITDA margin 20%–22%; management expects HSD decline in Q3 and HSD increase in Q4 vs prior year due to shipment timing and promotional cadence .
  • Balance sheet de-risked via voluntary $300M debt repayment in May, lowering long-term debt to ~$352M and ending cash at ~$289M; this supports future interest expense reductions and flexibility .

Note: Asterisked values in this report are from S&P Global; Values retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Channel mix improved: Professional net sales +12.1% to $37.4M and DTC +12.8% to $38.5M, supporting brand health and omnichannel strategy .
  • Adjusted gross profit margin expanded YoY to 73.2%, reflecting product mix and cost discipline on a non-GAAP basis .
  • Management reaffirmed FY25 guidance and highlighted execution on the “Bonds and Beyond” transformation; CEO: “We delivered a solid first half of 2025… optimistic for the future” .

What Went Wrong

  • Specialty Retail net sales fell 16.7% to $30.4M, pressuring overall growth and indicating retail headwinds .
  • GAAP diluted EPS turned negative to -$0.01, with SG&A up 45.1% YoY; litigation costs of $8.1M were significant non-recurring items impacting profitability .
  • Adjusted EBITDA declined 23.4% YoY to $24.6M, and adjusted EBITDA margin compressed to 23.1% from 30.8%, reflecting higher opex and transformation spend .

Financial Results

Consolidated Performance vs prior quarters (GAAP and key non-GAAP)

MetricQ4 2024Q1 2025Q2 2025
Net Sales ($USD Millions)$100.741 $96.978 $106.284
Gross Profit Margin (%)66.3% 69.5% 71.2%
Adjusted Gross Profit Margin (%)68.6% 71.9% 73.2%
SG&A ($USD Millions)$52.869 $47.987 $65.909
Adjusted SG&A ($USD Millions)$50.306 $44.349 $54.348
Adjusted EBITDA ($USD Millions)$17.489 $25.664 $24.550
Adjusted EBITDA Margin (%)17.4% 26.5% 23.1%
Diluted EPS ($USD)$(0.01) $0.00 $(0.01)

Channel/Segment Breakdown (Q2 2025)

ChannelNet Sales ($USD Millions)YoY Change
Specialty Retail$30.4 -16.7%
Professional$37.4 +12.1%
Direct-to-Consumer$38.5 +12.8%
GeographicUS: +2.5%; International: +1.9%

Balance Sheet KPIs

MetricDec 31, 2024Jun 30, 2025
Cash and Cash Equivalents ($USD Millions)$585.967 $289.339
Inventory ($USD Millions)$75.165 $78.323
Long-Term Debt ($USD Millions)$643.712 $351.902
Note: $300M voluntary debt repayment on May 1, 2025Event

Q2 2025 vs S&P Global Consensus

MetricConsensusActualSurprise
Revenue ($USD Millions)$100.323*$106.284 Beat
Primary EPS ($USD)$0.012*$(0.01) Miss
Gross Margin (%)71.16*73.2% (Adj. GM) Beat

Note: Asterisked values are from S&P Global; Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales ($USD Millions)FY 2025$410–$431 $410–$431 Maintained
Adjusted Gross Profit Margin (%)FY 202570.5%–71.5% 70.5%–71.5% Maintained
Adjusted EBITDA Margin (%)FY 202520%–22% 20%–22% Maintained
Net Sales cadence (qualitative)Q3 2025N/AHSD decline vs prior year New quarterly color
Net Sales cadence (qualitative)Q4 2025N/AHSD increase vs prior year New quarterly color

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Transformation strategy“Critical foundation… confident and optimistic” “Solid start… progress on transformation and Bonds and Beyond” “Solid first half… multi-pronged transformation; optimistic” Consistent execution emphasis
Channel mixPro down in FY24; retail mixed Specialty Retail +12% YoY; Pro -10.9%; DTC -7.2% Pro +12.1%; DTC +12.8%; Specialty Retail -16.7% Mix shifting toward Pro/DTC strength
Marketing & brand refresh2024 groundwork laid Incremental marketing investment flows through Q2 “Design to Defy” platform; positive consumer response (call) Increased investment; positive reception
Legal/regulatoryNon-GAAP adjustments include TRA, one-time items Began adjusting for Lilien litigation costs $8.1M litigation costs adjusted in Q2 Ongoing litigation cost impact (non-GAAP add-back)
Regional trendsUS +0.3%, Int’l -17.4% in Q4 US +0.6%, Int’l -4.5% US +2.5%, Int’l +1.9% Int’l stabilizes; US steady growth
Balance sheet/LeverageCash $586M; LT debt $644M Cash $581M; LT debt $642M $300M debt repaid; LT debt ~$352M, cash ~$289M Deleveraging; lower future interest burden

Management Commentary

  • CEO: “We delivered a solid first half of 2025… encouraged by the progress… optimistic for the future as we continue to execute on our Bonds and Beyond strategy.”
  • H2 cadence: management expects Q3 net sales HSD decline and Q4 net sales HSD increase vs prior year, driven by shipment timing and promotional events .
  • Call commentary on brand platform: “Design to Defy… broader purpose… ties together the way in which we go to market,” with positive consumer response .

Q&A Highlights

  • Quarterly cadence guidance clarified: anticipated HSD decline in Q3 and HSD increase in Q4 on shipment timing and promotions .
  • Channel performance addressed: strength in Pro and DTC, weakness in Specialty Retail as a focus area .
  • Balance sheet and leverage: voluntary $300M debt repayment in May discussed as a de-risking action .
  • Participants included Jefferies, TD Cowen, Barclays, Raymond James, Evercore ISI, JPMorgan, and Canaccord, indicating broad sell-side interest .

Estimates Context

  • Revenue beat consensus: $106.284M actual vs $100.323M* consensus; EPS missed: -$0.01 actual vs $0.012* consensus .
  • Adjusted gross margin (73.2%) exceeded gross margin consensus (71.16%*), indicating stronger than expected margin performance on a non-GAAP basis .
  • FY25 consensus revenue ~$423.0M* and EPS ~$0.066* remain consistent with reiterated guidance range .

Note: Asterisked values are from S&P Global; Values retrieved from S&P Global.

Key Takeaways for Investors

  • Revenue outperformance vs consensus with mix shift toward higher-growth Pro and DTC channels; monitor Specialty Retail recovery path .
  • EPS miss driven by elevated SG&A, including $8.1M litigation costs and increased marketing; expect opex to moderate as transformation investments normalize .
  • Guidance intact with explicit quarterly cadence: potential near-term volatility (Q3 down, Q4 up) tied to innovation shipments and promotions—create trading setups around product launch timing .
  • Deleveraging via $300M debt repayment reduces financial risk and likely lowers interest expense run-rate; supports medium-term margin stabilization .
  • Stock reaction was modestly positive in pre-market following the release, suggesting investor focus on revenue beat and balance sheet actions despite EPS miss .
  • Watch international recovery trajectory (now +1.9% YoY) and incremental returns from “Design to Defy” platform and innovation pipeline into Q4 .
  • Near-term: trade Q3 weakness expectations vs Q4 strength signals; Medium-term: thesis hinges on execution of transformation, channel rebalancing, and sustained margin improvement within reiterated FY25 guardrails .