Waldencast Reports Q4 2024 and Fiscal Year 2024 Financial Results
Q4 Net Revenue of $72.1 million, 29.4% Comparable Net Revenue Growth and $11.2 million of Adjusted EBITDA, doubling from Q4 2023
FY 2024 Net Revenue of $273.9 million, 27.5% Comparable Net Revenue Growth and $40.3 million of Adjusted EBITDA
Obagi Medical is the fastest growing professional skincare brand1 in the US in 2024
Milk Makeup expands its distribution to Ulta Beauty
Waldencast secures a new $205 million credit facility, replacing the current one, enhancing flexibility and extending debt maturity
LONDON, March 18, 2025 (GLOBE NEWSWIRE) -- Waldencast plc (NASDAQ:WALD) ("Waldencast" or the "Company"), a global multi-brand beauty and wellness platform, today reported operating results for the three months ended December 31, 2024 ("Q4 2024") and the year ended December 31, 2024 (the "Year Ended 2024") on Form 6-K to the U.S. Securities and Exchange Commission (the "SEC"), which are also available on our investor relations site at http://ir.waldencast.com/.
Michel Brousset, Waldencast Founder and CEO, said: "We closed a transformative year for the Group, achieving outstanding growth, expanding our brands' communities, and making significant progress on our strategic priorities. Our business model is driven by a powerful flywheel effect of growth and profitability. This begins with the unique strength of our brands, which is amplified by our ability to enhance operational efficiency. As a result, we can effectively increase investments in sales and marketing to drive profitable growth. In 2024, we achieved a 27.5% increase in Comparable Net Revenue and a 65.1% rise in Adjusted EBITDA, demonstrating our proven ability to expand gross margins and optimize our cost base as we grow."
"Our proven ability to innovate significantly contributed to our brands' growth. This year, Milk Makeup introduced several exciting new products, including the viral and award-winning Cooling Water Jelly Tint Blush + Lip Stain. Obagi Medical also launched a range of successful innovations aimed at both consumers and the professional skincare medical community, most notably the ELASTIderm Lift Up & Sculpt Facial Moisturizer and Elastiderm Advanced Filler Concentrate."
"Building on our momentum, we are excited to announce that Milk Makeup will launch in over 600 Ulta Beauty locations this spring, further highlighting the growing demand for our cult-favorite brand. Additionally, Obagi Medical expanded the Suzan Obagi MD® collection with groundbreaking new products, including the Super Antioxidant Serum and the Moisture Restore Hydration Replenishing Cream."
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1 Among the top 10 brands. Kline & Company. (2024). 2024 Kline Professional Skincare: United States market analysis and opportunities.
"Overall, we are excited about the year ahead and expect another year of significant milestones toward achieving our ambition to build a global best-in-class beauty and wellness multi-brand platform by creating, acquiring, accelerating, and scaling the next generation of high-growth, purpose-driven brands," concluded Mr. Brousset.
Q4 2024 Results Overview
Please refer to the definitions and reconciliations set out further in this release with respect to certain adjusted non-GAAP measures discussed below which are included to provide an easier understanding of the underlying performance of the business, but should not be seen as a substitute for the U.S. GAAP numbers presented in this release.
For the three months ended December 31, 2024 compared to the three months ended December 31, 2023:
Net Revenue increased 30.8% to $72.1 million, a 29.4% increase in Comparable Net Revenue Growth that was attributable to Milk Makeup channel expansion, Obagi Medical accelerated growth in the Physician Dispense channel, and continued success in Obagi Medical e-commerce channels.
Gross Profit was $49.4 million. Adjusted Gross Profit was $52.6 million, or 73.0% of net revenue, compared to $40.3 million in Q4 2023.
Net Loss improved from $32.7 million in Q4 2023 to $22.6 million in Q4 2024, driven by operational growth and a reduction in non-recurring costs associated with the restatement and SEC investigation.
Adjusted EBITDA doubled to $11.2 million (15.5% of net revenue), reflecting a 530 basis point expansion from Q4 2023. This growth was driven by strong top-line performance and operational leverage, as both Obagi Medical and Milk Makeup continued to scale and reinvest in business drivers while maintaining G&A discipline.
Liquidity: The business maintained strong cash conversion in Q4 2024, driven by effective working capital management and minimal capital expenditure thanks to our asset-light business model. While the Company continues to incur significant non-recurring legal and advisory costs, the level of expenditures has been gradually reducing. As of December 31, 2024, the Company had $14.8 million in cash and cash equivalents and $154.2 million of Net Debt.
New Credit Facility: Waldencast has entered into a new $205 million five-year credit facility, comprising a $175 million Term Loan and a $30 million RCF, that replaces its existing facility. This agreement supports the Company's strategic priorities by enhancing financial flexibility and extending its debt maturity profile well ahead of the current facilities expiration in July 2026.
Outstanding Shares: As of February 28, 2025, we had 122,720,911 ordinary shares outstanding, consisting of 112,054,383 Class A shares and 10,666,528 Class B shares. As of December 31, 2024, we had 122,692,968 ordinary shares outstanding, consisting of 112,026,440 Class A shares and 10,666,528 Class B shares.
(In $ millions, except for percentages)
Q4 2024
% Sales
% Growth
% Comparable Net Revenue Growth
Q4 2023
% Sales
Waldencast
Net Revenue
72.1
100.0%
30.8%
29.4%
55.1
100.0%
Adjusted Gross Profit
52.6
73.0%
30.7%
40.3
73.1%
Adjusted EBITDA
11.2
15.5%
99.3%
5.6
10.2%
Obagi Medical
Net Revenue
42.2
100.0%
30.0%
27.7%
32.5
100.0%
Adjusted Gross Profit
33.2
78.7%
28.0%
26.0
80.0%
Adjusted EBITDA
9.8
23.3%
23.7%
8.0
24.5%
Milk Makeup
Net Revenue
29.9
100.0%
31.9%
22.6
100.0%
Adjusted Gross Profit
19.4
64.9%
35.6%
14.3
63.1%
Adjusted EBITDA
4.8
16.1%
248.0%
1.4
6.1%
Fourth Quarter 2024 Brand Highlights:
Obagi Medical:
Net Revenue reached $42.2 million, from $32.5 million in Q4 2023 with Comparable Net Revenue Growth of 27.7%.
Obagi Medical's strong net revenue growth continued to be driven by increased brand awareness, stronger selling and marketing investments, and continued innovation. The brand continued expanding its international footprint and growing e-commerce sales through its direct website and the move to a first party model with its main e-commerce distributor, implemented in late 2023, with benefits tapering off by Q1 2025.
Notably, Obagi Medical was the fastest-growing professional skin care brand among the top 10 in the US in 20241. This historic achievement underscores the strength of our enhanced go-to-market strategy which successfully balances growth in the Physician Dispense channel, our historic stronghold, with the acceleration of our digital channels.
Adjusted Gross Margin of 78.7% contracted 130 basis points from Q4 2023 due to a higher weight of inventory liquidations.
Adjusted EBITDA was $9.8 million, an increase of 23.7% from Q4 2023 with an Adjusted EBITDA margin of 23.3%, a decline of 120 basis points from Q4 2023 reflecting the brands continued strategic investment in marketing to drive top-line growth and improved leverage of fixed costs.
Milk Makeup:
Net Revenue reached $29.9 million, up 31.9% from $22.6 million in Q4 2023.
Milk Makeup's Q4 2024 growth reflected the initial shipments to Ulta Beauty in support of the brand's spring 2025 launch along with increased demand driven by our growing awareness, the continued delivery of sought-after innovation, and international expansion.
Adjusted Gross Margin increased by 180 basis points versus Q4 2023, primarily reflecting the positive impact of channel and product mix, as well as margin accretive innovation.
Adjusted EBITDA was $4.8 million an increase of $3.4 million from Adjusted EBITDA of $1.4 million in Q4 2023. Adjusted EBITDA Margin improved 1,000 basis points to 16.1% versus 6.1% in Q4 2023 as robust sales growth and gross margin expansion drove significant operational leverage despite increased brand investment.
Year Ended 2024 Results Overview
For the year ended December 31, 2024 compared to the year ended December 31, 2023:
Net Revenue was $273.9 million, a 27.5% increase in Comparable Net Revenue Growth.
Gross Profit was $191.7 million. Adjusted Gross Profit was $203.6 million, or 74.3% of net revenue, a margin improvement of 530 basis points versus 2023.
Net Loss was $48.6 million, down from $106.0 million in the Year Ended 2023. The improvement was primarily driven by strong operational growth in the business, a fair value adjustment of the warrants, and reduced non-recurring costs.
Adjusted EBITDA was $40.3 million, an Adjusted EBITDA Margin of 14.7%, compared to 11.2% in the Year Ended 2023.
Fiscal 2025 Outlook:
We expect to deliver mid-teens Net Revenue growth and further expansion of Adjusted EBITDA Margin into the mid-to-high teens.
Net revenue growth is expected to accelerate throughout the year, starting with relatively flat growth in Q1 due to the anniversary of the highly successful Milk Makeup "Jellies" launch from Q1 2024, as well as inventory adjustment in some of our retail partners.
Growth is expected to accelerate progressively in the following quarters, driven by our innovation pipeline and the continued expansion of our distribution footprint in the U.S. and internationally, including the launch of Milk Makeup at Ulta Beauty in March 2025.
Year Ended 2024 Highlights
(In $ millions, except for percentages)
Year Ended 2024
% Sales
% Growth
% Comparable Net Revenue Growth
Year Ended 2023
% Sales
Waldencast
Net Revenue
273.9
100.0%
25.5%
27.5%
218.1
100.0%
Adjusted Gross Profit
203.6
74.3%
35.3%
150.4
69.0%
Adjusted EBITDA
40.3
14.7%
65.1%
24.4
11.2%
Obagi Medical
Net Revenue
149.3
100.0%
26.9%
30.7%
117.7
100.0%
Adjusted Gross Profit
118.6
79.4%
41.6%
83.7
71.2%
Adjusted EBITDA
30.5
20.4%
46.4%
20.8
17.7%
Milk Makeup
Net Revenue
124.6
100.0%
24.0%
100.5
100.0%
Adjusted Gross Profit
85.0
68.2%
27.4%
66.7
66.4%
Adjusted EBITDA
29.1
23.3%
58.0%
18.4
18.3%
Conference Call and Webcast Information
Waldencast will host a conference call to discuss its year-end and fourth quarter results on Wednesday, March 19, 2025, at 8:30 AM EDT for the period ended December 31, 2024. Those interested in participating in the conference call are invited to dial (877) 704-4453. International callers may dial (201) 389-0920. A live webcast of the conference call will include a slide presentation and will be available online at https://ir.waldencast.com/. A replay of the webcast will remain available on the website until our next conference call. The information accessible on, or through, our website is not incorporated by reference into this release.
Non-GAAP Financial Measures
In addition to the financial measures presented in this release in accordance with U.S. GAAP, Waldencast separately reports financial results on the basis of the measures set out and defined below which are non-GAAP financial measures. Waldencast believes the non-GAAP measures used in this release provide useful information to management and investors regarding certain financial and business trends relating to its financial condition and results of operations. Waldencast believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends. These non-GAAP measures also provide perspective on how Waldencast's management evaluates and monitors the performance of the business.
There are limitations to non-GAAP financial measures because they exclude charges and credits that are required to be included in GAAP financial presentation. The items excluded from GAAP financial measures such as net income/loss to arrive at non-GAAP financial measures are significant components for understanding and assessing our financial performance. Non-GAAP financial measures should be considered together with, and not alternatives to, financial measures prepared in accordance with GAAP.
Please refer to definitions set out in the release and the tables included in this release for a reconciliation of these metrics to the most directly comparable GAAP financial measures.
Comparable Net Revenue is defined as Net Revenue excluding sales related to the former Obagi Medical China business (the "Obagi Medical China Business"), which was not acquired by Waldencast at the time of the business combination with Obagi Medical and Milk Makeup (the "Business Combination") as was presented in previous earnings releases. The sales to the Obagi Medical China Business have a below market sales price for a defined period of time after the acquisition of Obagi Medical pursuant to the Business Combination. As a result of the Business Combination, a below market contract liability was recognized and is amortized based on sales. This adjustment is shown in the Adjusted EBITDA and Adjusted Gross Profit reconciliations. Management of the Company believes that this non-GAAP measure provides perspective on how Waldencast's management evaluates and monitors the performance of the business. See reconciliation to U.S. GAAP Net Revenue in the Appendix.
Comparable Net Revenue Growth is defined as the growth in Comparable Net Revenue period over period expressed as a percentage.
Adjusted Gross Profit is defined as GAAP gross profit excluding the impact of inventory fair value adjustments, amortization of the supply agreement and formulation intangible assets, discontinued product write-off, and the amortization of the fair value of the related party liability from the Obagi Medical China Business. The Adjusted Gross Profit reconciliation by Segment for each period is included in the Appendix.
Adjusted Gross Margin is defined as Adjusted Gross Profit divided by GAAP Net Revenue.
Adjusted EBITDA is defined as GAAP net income (loss) before interest income or expense, income tax (benefit) expense, depreciation and amortization, and further adjusted for the items as described in the reconciliation below. We believe this information will be useful for investors to facilitate comparisons of our operating performance and better identify trends in our business. Adjusted EBITDA excludes certain expenses that are required to be presented in accordance with GAAP because management believes they are non-core to our regular business. These include non-cash expenses, such as depreciation and amortization, stock-based compensation, inventory fair value adjustments, the amortization and release of fair value of the related party liability to the Obagi Medical China Business, change in fair value of financial instruments, loss on impairment of goodwill and leases, and foreign currency translation loss (gain). In addition, adjustments include expenses that are not related to our underlying business performance including (1) legal, advisory and consultant fees related to the financial restatement of previously issued financial statements and associated regulatory investigation, and the Business Combination; (2) costs to recover and the value of the inventory recovered from the acquisition of the SA distributor, and the associated discontinued products; and (3) other non-recurring costs, primarily legal settlement costs and restructuring costs. The Adjusted EBITDA by Segment for each period is included in the Appendix.
Adjusted EBITDA Margin is defined as Adjusted EBITDA as a percentage of net revenue. The Adjusted EBITDA Margin reconciliation by Segment for each period is included in the Appendix.
(In thousands, except for percentages)
Three Months Ended December 31, 2024
Three Months Ended December 31, 2023
Year ended December 31, 2024
Year ended December 31, 2023
Net Loss
$
(22,597
)
$
(32,731
)
$
(48,648
)
$
(105,968
)
Adjusted For:
Depreciation and amortization
15,013
14,863
60,015
60,498
Interest expense, net
4,088
4,276
17,155
18,888
Income tax expense (benefit)
4,113
(976
)
110
(6,975
)
Stock-based compensation expense
2,993
1,677
9,392
9,235
Legal and advisory non-recurring costs(1)
3,029
12,949
21,493
32,783
Change in fair value of warrants and interest rate collar
443
2,473
(23,679
)
10,443
Amortization and release of related party liability(2)
(4,169
)
—
(5,678
)
(4,058
)
Loss on impairment of goodwill
5,031
—
5,031
—
Other costs(3)
3,241
3,083
5,093
9,549
Adjusted EBITDA
$
11,185
$
5,613
$
40,284
$
24,395
Net Revenue
$
72,083
$
55,117
$
273,868
