Oddity Tech Ltd at Morgan Stanley Global Consumer & Retail Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Dara Mohsenian - Morgan Stanley & Co. LLC - Analyst : So maybe first, just given you're fairly young as a public company and the track record in public markets, maybe I'll just give you an opportunity upfront to detail to investors who don't know your story as well, the key drivers behind your business and what makes ODDITY different and unique in this beauty landscape?

Question: Dara Mohsenian - Morgan Stanley & Co. LLC - Analyst : Great. That's helpful. And obviously, a great track record over the last few years. As you sort of dimensionalize forward growth over the next few years versus what you've seen in the last few years, maybe compare and contrast where that growth comes from going forward with what you've seen recently?

Question: Dara Mohsenian - Morgan Stanley & Co. LLC - Analyst : And as you think about the impact from ODDITY LABS, is it more new products with new molecule development? Is it existing products? Just give us some sense for how that plays out over the next few years.

Question: Dara Mohsenian - Morgan Stanley & Co. LLC - Analyst : Great. You touched on earlier your strong track record over the last few years. Obviously, that hasn't gone unnoticed. You had some large-scale competitors in the beauty category, many of whom are looking to catch up, particularly in e-comm sales with technology, et cetera. So can you discuss your competitive advantage, how you stay ahead of the competition in sort of a rapidly evolving landscape here?

Question: Dara Mohsenian - Morgan Stanley & Co. LLC - Analyst : Great. That's helpful. You talked about leveraging that existing consumer base, and it's a competitive advantage, particularly as you've got Brands 3 and 4 coming up and, obviously, the success of SpoiledChild. Can you take us through how you strategically prioritize that existing customer versus bringing in new customers and maybe how that ties into your growth goals and how you think about developing each of those customer bases as you look out over the next three to five years? Does that change at all as you move over time?

Question: Dara Mohsenian - Morgan Stanley & Co. LLC - Analyst : Right. Okay. And among the existing consumers, can you talk a little bit about IL MAKIAGE and SpoiledChild, understanding SpoiledChild doesn't have as long a track record, but what's driving repeat there? Is it number of orders? Is it average order size, the basket? What's sort of driving that existing consumer growth?

Question: Dara Mohsenian - Morgan Stanley & Co. LLC - Analyst : Great. That's helpful. Maybe we could talk a little bit about vision and how important that is going forward, how you integrate that technology more in your business and the commercialization of that from a revenue standpoint as we move out over the next few years? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 03, 2024 / 8:00PM, ODD.OQ - Oddity Tech Ltd at Morgan Stanley Global Consumer & Retail Conference

Question: Dara Mohsenian - Morgan Stanley & Co. LLC - Analyst : Great. That's helpful. Maybe we can talk a little bit about growth profile ex-Brands 3 and 4, but IL MAKIAGE and SpoiledChild, and how you think about their contribution to growth going forward? SpoiledChild, I think, is approaching the core of the business. So how do you think about that going forward?

Question: Dara Mohsenian - Morgan Stanley & Co. LLC - Analyst : Okay. And can you discuss your strategy to grow the business internationally? How big a focus is that? You've obviously got a lot of growth priorities in the US. So just how do you manage that? And what are your expectations in the next few years?

Question: Dara Mohsenian - Morgan Stanley & Co. LLC - Analyst : And those markets, do they generally offer you enough opportunity based on that testing that they would make sense over time, it's just a matter of prioritizing? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 03, 2024 / 8:00PM, ODD.OQ - Oddity Tech Ltd at Morgan Stanley Global Consumer & Retail Conference

Question: Dara Mohsenian - Morgan Stanley & Co. LLC - Analyst : Okay. And SpoiledChild, what are the thoughts around international expansion there? Is it a matter of prioritizing it at some point? Is there a time frame in mind or --

Question: Dara Mohsenian - Morgan Stanley & Co. LLC - Analyst : Okay. Great. Maybe we could touch on M&A for a minute. You guys have a sort of wider open space in theory given there's a lot you could do with technology, right? And you have a fairly narrow product set. So give us a sense for when you're thinking through M&A, what are the areas you're looking at? I imagine it's a bit more technology-based and -- but let me not answer the question, let me let you answer the question. And given the internal growth opportunities you mentioned, is it a focus? Or is this probably a minor piece of the story over the next few years, understanding it's episodic?

Question: Dara Mohsenian - Morgan Stanley & Co. LLC - Analyst : Okay. And put share repurchases in context, we're not used to growth companies repurchasing shares as much. Then again, we're not used to growth companies having net cash and such a strong balance sheet and such strong cash flow early in their life cycle. So is that more sort of opportunistic, the share repurchases recently? How does that fit into the strategy around capital allocation?

Question: Dara Mohsenian - Morgan Stanley & Co. LLC - Analyst : Great. Maybe we can spend a little bit of time on the category itself and the beauty category. I'd love to get your perspective on market share for e-commerce as a percent of the category longer term in light of what we've seen recently, which has been a lot of channel volatility here in the category. So any updates from you on your thoughts around how online progresses as a percent of category mix over time?

Question: Dara Mohsenian - Morgan Stanley & Co. LLC - Analyst : Right. Great. And maybe given that beauty category weakness, you could just touch on your visibility. You mentioned on the Q3 call, you got off to a good start in Q4. But just given what we're seeing in the industry in general, is there any secondary impacts that come back to you, whether it's promotion from competitors or whatever it might be, maybe not even directly but indirectly. How do you think about level of visibility on your business here today?

Question: Dara Mohsenian - Morgan Stanley & Co. LLC - Analyst : Great. And maybe we can end on AI has been something that's been in your business model for years before it was a huge buzzword in the investment community. As you think about your business today and how it's developed in the last few quarters, obviously, machine learning is a REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 03, 2024 / 8:00PM, ODD.OQ - Oddity Tech Ltd at Morgan Stanley Global Consumer & Retail Conference big piece of the business model, as we discussed. But what are some of the other ways you're using AI to drive your business and be more effective as an organization?

Question: Dara Mohsenian - Morgan Stanley & Co. LLC - Analyst : Well, great. That was very informative. Thank you so much for being here.