Oddity Finance Announces $350 Million Convertible Notes Offering Amid Strong Financial Health

ODDITY Tech Ltd. (NASDAQ: ODD), a consumer tech company known for its innovative beauty brands, has announced that its subsidiary, Oddity Finance LLC, intends to offer $350 million in senior unsecured convertible notes due 2030. The private offering, targeted at qualified institutional buyers, may expand by an additional $50 million if initial purchasers exercise their option within a specified window.

Key Details of the Offering

• Principal Value: $350 million, with a potential $50 million extension

• Maturity Date: June 15, 2030

• Coupon: Zero interest; no accretion of principal

• Security: Unsecured, senior obligations of Oddity Finance and IM Pro Makeup NY L.P.

• Exchange Options: Cash, Class A common stock, or a combination of both

Unlike traditional debt instruments, these notes will not bear interest or increase in value over time. They are designed for strategic flexibility and may be converted or redeemed under specific conditions, offering investors multiple return pathways.

Financial Strength Supports Strategic Flexibility

ODDITY’s strong balance sheet backs this offering. The company holds approximately $257 million in cash and has a $200 million untapped credit facility. Importantly, according to InvestingPro, ODDITY boasts more cash than debt and maintains a current ratio of 1.86, signaling excellent liquidity and risk management.

Although the funds are not essential for daily operations, ODDITY aims to use the proceeds to support future growth opportunities, such as R&D initiatives, international expansion, or strategic M&A activity. This proactive move reflects the company’s commitment to long-term innovation and market leadership.

Convertible Notes and Hedge Transactions

A portion of the proceeds will go toward capped call transactions, which are financial strategies designed to:

• Limit dilution of Class A common shares upon note conversion

• Offset potential cash payments above the principal value

• Reduce market volatility tied to the stock or note price

These transactions may influence stock price behavior, especially during pricing periods or when conversions occur.

Convertible Note Redemption and Flexibility for Investors

Starting June 20, 2028, ODDITY may redeem the notes if certain stock price thresholds are met. Investors also have increased flexibility as the maturity date approaches, offering added appeal to institutional buyers.

Importantly, this announcement does not constitute a public offering. The notes and any associated securities will not be registered under the Securities Act of 1933 or state securities laws.

Operational Performance and Growth Outlook

ODDITY has shown impressive financial and operational momentum:

• Gross Margin: 72.93%

• 12-Month Revenue Growth: 26.83%

• Valuation: Market cap of $4.32 billion

According to InvestingPro’s detailed research, ODDITY is among the healthiest companies in its sector. Their premium analytics platform provides in-depth insights into over 1,400 U.S. stocks, including ODDITY, helping investors make informed decisions.

Recent Q1 2025 Earnings and Analyst Reactions

ODDITY’s Q1 2025 results impressed analysts. Citizens JMP raised its price target from $66 to $72, citing:

• Sustained core business growth

• Optimistic forward guidance

• Promising potential of IL MAKIAGE and SpoiledChild brands

Analyst Andrew Boone highlighted the likelihood of significant revenue milestones in the near future. Meanwhile, a recent block trade involving 5.5 million shares—sold by an entity tied to CEO Oran Holtzman—sparked interest. Despite this transaction, Holtzman reaffirmed his commitment through a one-year lock-up agreement and retained voting control.

JMP Securities maintained a Market Perform rating with a $66 price target, praising ODDITY’s marketing strategy, particularly its success on Meta platforms. With over 20% YoY revenue growth expected and several new product launches on the horizon, the company is positioning itself for sustained success.

Final Thoughts

ODDITY Tech Ltd. continues to demonstrate strategic vision and financial discipline. Its latest convertible note offering provides both flexibility and capital for future innovation without undermining current operations. With robust liquidity, strong brand performance, and a forward-looking leadership team, ODDITY remains a standout in the consumer tech and beauty sectors.