Waldencast plc Q2 FY2024 earnings call

• Michel discussed the company's vision to build a global best-in-class beauty and wellness platform, highlighting strong Q2 and H1 performance with accelerated growth. - Milk Makeup is a leading clean makeup brand with 3x faster growth than the U.S. Prestige makeup market in H1, while Obagi Medical outperformed the U.S. Prestige skincare market by 5x in H1 and is a top physician-recommended medical-grade skincare brand. - Manuel reviewed financials, noting Q2 net revenue $63.3M (+25.7% YOY), H1 net revenue $131.6M (+23.1% YOY), adjusted EBITDA for Q2 $6.3M and H1 $17.7M, with guidance for full-year 2024 growth acceleration and mid-teens adjusted EBITDA margin.

Milk Makeup: In Q2 2024, net revenue was $28.7 million, a 20% increase year-over-year. For the first half, net revenue was $63.2 million, a 20.8% increase from H1 2023. Adjusted gross profit margin in Q2 was 69.7%, and for H1 it was 70.6%. Obagi Medical: Q2 2024 revenue was $34.6 million, a 30.9% year-over-year increase. H1 2024 net revenue was $68.4 million, a 25.4% increase from H1 2023. Adjusted gross profit margin in Q2 was 79.3%, and for H1 it was 80.3%.

• Full-year 2024 comparable revenue growth expected to accelerate beyond Q2's 25.7%. - Adjusted EBITDA margin expected to land in the mid-teens, substantially higher than 2023's 11.2%. - Second-half adjusted EBITDA expected to exceed first-half results in both absolute terms and as a percentage of revenue.

• Out-of-stocks in Q2 due to strong consumer demand for key products. - Competitive landscape in the beauty market, though the company focuses on creating unique consumer propositions.

Q: Drivers of strong gross margin expansion and growth outlook?

A: For Obagi, driven by favorable channel mix and operational efficiency; Milk driven by operational efficiency. International growth for Milk includes successful expansions in U.K., Scandinavia, Latin America; Obagi's international has progress in Southeast Asia and work on distributor realignment.