Earnings Call Transcript - ODD Q3 2025

Operator, Operator

Good morning. Welcome to ODDITY's Third Quarter 2025 Earnings Conference Call. Today's call is being recorded. We have allotted time for prepared remarks and Q&A. At this time, I would like to turn the conference over to Maria Lycouris, Investor Relations for ODDITY. Thank you. You may begin.

Maria Lycouris, Investor Relations

Thank you, operator. I'm joined by Oran Holtzman, ODDITY's Co-Founder and CEO; and Lindsay Drucker Mann, ODDITY's Global CFO. Niv Price, ODDITY's CTO, will also be available for the question-and-answer session. As a reminder, management's remarks on this call that do not concern past events are forward-looking statements. These may include predictions, expectations or estimates, including statements about ODDITY's business strategy, market opportunity, future financial performance and potential long-term success. Forward-looking statements involve risks and uncertainties, and actual results could differ materially due to a variety of factors. These factors are described under forward-looking statements in our earnings press release issued yesterday and in our most recent annual report on Form 20-F filed with the Securities and Exchange Commission on February 25, 2025. We do not undertake any obligation to update forward-looking statements, which speak only as of today. Finally, during this call, we will discuss certain non-GAAP financial measures, which we believe are useful supplemental measures for understanding our business. Additional information about these non-GAAP financial measures, including their definitions are included in our earnings press release, which we issued yesterday. I will now hand the call over to Oran.

Oran Holtzman, Co-Founder and CEO

Thanks, everyone, for joining us today. We delivered an outstanding third quarter with strong financial performance while achieving major milestones in our growth initiatives, including new brands, new markets, ODDITY LABS and tech innovation. Even in a challenging industry backdrop, ODDITY continues to deliver on its near-term financial commitments while building our future growth engines. Our financial performance once again exceeds our targets as we have done every quarter for the last 10 quarters as a public company across revenue, profit and earnings, including 24% revenue growth and 24% growth in adjusted diluted earnings per share year-over-year despite category challenges. We are also once again raising our full year guidance. We achieved a huge milestone this week with the official launch of METHODIQ, the third brand in the ODDITY platform. METHODIQ is our most ambitious endeavor. Our long-term goal for METHODIQ is not just to launch another great brand and a telehealth platform, but to transform a broken medical care system using the best treatment and the highest standards of care available to everyone. Our objective is to address medical issues with customized high efficacy treatment without the need of going to a doctor's office or getting lost in a drugstore. Achieving our planned timeline for METHODIQ is a great accomplishment and speaks to what makes ODDITY and our culture so strong. This is 4 years of heavy R&D in the making, supported by 2 acquisitions, including Voyage81 and Revela developed with what we believe is an unprecedented scale of over 20,000 real user trials for our product line. METHODIQ is starting in dermatology, but our long-term goal is to expand into new medical domains in the future, and these are in development as we speak. Our launch into dermatology takes on a massive problem. Industry data shows that nearly 50 million Americans suffer from acne, nearly 30 million from hyperpigmentation and more than 30 million from eczema, and many of them are unsatisfied with the current options on the market. Drugstore products lack efficacy and personalization, going to a dermatologist is a high friction and the standard of care for these conditions has declined. At the same time, dermatologists will tell you that issues like acne are curable. You only need to ensure that the person has the right products and that they stay compliant. To tackle this big challenge, we built an ambitious and complex brand. METHODIQ is expected to feature a huge line of 28 prescription and nonprescription products, which combine for more than 100 unique treatment combinations or precision personalization. We have aimed to optimize these products to balance between maximizing efficacy and minimizing side effects at the same time to provide the best-in-class beauty experience using the same standards for things like texture and scent that we have at IL MAKIAGE and SpoiledChild, while beating top benchmark competitors in their category based on internal data. Our launch portfolio spans oral topical supplements and medical grade makeup that conceals whiteheads. Within the first 6 months of launch, we will be live in the market with 4 METHODIQ products formulated with ODDITY LABS molecules that are proprietary to us, addressing a range of skin conditions that include dark spots, papular scarring, eczema and skin filament. METHODIQ's suite of vision tools was developed alongside our team of dermatologists to analyze visible skin features like breakouts and pigmentation to help our doctors' networks understand its user conditions. These vision models were built drawing on more than 1 million images of real individuals with no facial skin condition, which we believe is the largest image data set of its kind and was curated from over 13 million facial images in ODDITY's database. Users are delivered continuous care through METHODIQ's first-of-its-kind tracking app for weekly check-ins where our vision technology quantifies progress and gives updates to the clinician, ensuring compliance and success. We soft launched METHODIQ in Q3 and went live with our formal launch earlier this week, exactly as planned. This launch includes a major media campaign showcasing METHODIQ's distinctive brand voice and inspires consumers to commit to the care. We are running a large-scale out-of-home takeover in New York City and a massive TikTok activation partnering with the biggest medical and skin influencers to create brand awareness and to build trust. This is the biggest TikTok activation in ODDITY's history. And as we have said, dermatology is just the beginning. We are working on additional medical domains for expansion, and we expect to have more to announce for METHODIQ's in the future. Turning to IL MAKIAGE. Q3 was once again strong. IL MAKIAGE revenue grew double digits online. The brand remains on track to achieve our target of $1 billion revenue by 2028. We continue to show healthy expansion in international markets. At the ODDITY level, international revenue increased around 40% year-over-year in the first 9 months of 2025. We have successfully scaled in existing markets like U.K. and Australia, while conducting larger scale tests in new markets like France, Italy and Spain. We see huge opportunity in international markets and plan to further scale those across the board in 2026. Skin remains a standout growth area and is on track to be around 40% of IL MAKIAGE brand revenue this year. Successful product innovation has been a key driver of skin, and we expect this will continue in 2026 with our solid lineup of new product launches. Turning to SpoiledChild, which is having a strong year. We now expect the brand to cross $225 million of revenue in 2025. We are excited about our innovation lineup for 2026, including new product tests. Moving to ODDITY LABS, where our very hard work over the last 2 years is starting to bear fruit. We have made significant improvement over the last year to our systems, infrastructure and teams, which we believe will translate into strong commercial discoveries. The near-term commercial impact for ODDITY LABS is increasing. We plan to have at least 8 products with lab molecules on the market in 2026 for our existing brands, including 4 products for METHODIQ and 4 for IL MAKIAGE and SpoiledChild. Beyond these 8, we have additional products planned for our brand launch, lastly on tech product innovation, which is the backbone of our business and an area of continuous investment. Artificial intelligence has been a centerpiece of our tech platform since we first launched in 2018. Advances in large language models and generative AI, together with our large and growing proprietary data sets allow us to push the frontier of how we can use machine learning to drive direct-to-consumer. We have a range of initiatives in development on this front, including commerce agents that drive conversion and satisfaction, integrating these state-of-the-art models into our advertising creative and other customer-facing initiatives. With that, I will hand it over to Lindsay.

Lindsay Drucker Mann, Global CFO

Thanks, Oran. Turning to our third quarter financial results, which I'll refer to on an adjusted basis. You can find the full reconciliation to GAAP in our press release. Q3 was another good quarter for us, setting us up for a record-breaking full year results in 2025. ODDITY's strong financial results continue to stand out relative to our competitors. This outperformance has been driven by the strength of our direct-to-consumer model and exposure to what we see as the key durable growth vectors in the industry, which are the consumer shift online and the migration towards high-efficacy products. We grew revenue by 24% in the third quarter to $148 million, exceeding our guidance for revenue growth of between 21% and 23%. The strength was driven by double-digit online growth at both IL MAKIAGE and SpoiledChild. Net revenue was driven by an increase in orders, while average order value declined around 1%. Average order value was impacted by mix, including faster growth in international markets, which carry lower AOV. Repeat increased as a percentage of sales year-over-year, and our 12-month net revenue repeat cohort trends remained strong at north of 100%. Gross margins of 71.6% expanded 170 basis points versus the prior year and exceeded our guidance of 68%. We did experience some gross margin impact from the flow-through of higher tariffs during the period, but this was offset in part by cost efficiencies and favorable mix relative to our plan. We continue to expect tariff headwinds will remain manageable for the balance of 2025 and into 2026. And while we have the flexibility to take pricing as needed, we have no specific price increases planned to offset tariff-related inflation. We delivered adjusted EBITDA of $29 million in the quarter, above our guidance of $26 million to $28 million. We continue to invest in our long-term growth engines, including our METHODIQ brand launch and other future brands, ODDITY LABS and our tech platform. We had higher-than-planned media costs in the quarter and have seen the media backdrop improve as we progressed into the fourth quarter. We delivered adjusted diluted earnings per share of $0.40 compared to our guidance of $0.33 to $0.36. Adjusted diluted earnings per share exclude approximately $9 million of share-based compensation expense. We delivered strong free cash flow of $90 million for the first 9 months of the year. This included around $16 million of outflows related to inventory as we built inventory from METHODIQ and modified our inventory shipment timing for tariff planning purposes. We ended the quarter with $793 million of cash, cash equivalents and investments on our balance sheet with an additional $200 million available on our undrawn credit facilities. Turning to our outlook for 2025. After a strong first 9 months, we're on track for another record-breaking fiscal year and are once again raising full year guidance. We now expect full year 2025 net revenue will be between $806 million and $809 million, representing between 24% and 25% year-over-year growth. We expect gross margin will be approximately 72.5%. We expect adjusted EBITDA will be between $161 million and $163 million, and we expect adjusted diluted earnings per share will be between $2.10 and $2.12, assuming no share buybacks in 2025. This full year outlook includes our expectation that revenue in the fourth quarter will increase between 21% and 23% year-over-year. You can find more details on our Q4 outlook in our press release. With that, I'll turn the call back to the operator for questions.

Operator, Operator

Our first question is from Dara Mohsenian with Morgan Stanley.

Dara Mohsenian, Analyst

So Oran, on the base business, can you just help us unpack the 40% year-to-date growth you mentioned in international markets? Obviously, that's been a greater focus for you guys year-to-date. What have been the key geographic drivers of growth there from a country standpoint? And then just as you look out to 2026, you mentioned further scaling the international business. Is that around further country penetration? Is it SpoiledChild expansion? Just the key expansion or white space opportunities as you look going forward?

Oran Holtzman, Co-Founder and CEO

Sure. So the first 9 months, just to put things in perspective, still 83% of revenue came from the U.S. So although international grew 40%, it is still tiny compared to the U.S. while for others, as you know, international is approximately 2/3 of their business. For us, it's still 17%. Our plan is to continue to responsibly grow across the board in international markets. But as we said in our remarks, it's a huge revenue and profit opportunity for us, and we see that it's strategically important for us. We scale international when we think it makes sense. We don't run and spend in user acquisition just because we want to grow international or because we see softness in the U.S. The opposite. Where we see opportunity, this is where we push and we get more revenue. This year, we grew 40%, but like the objective is not just to grow the international market. And in terms of countries today, existing countries, Canada, U.K., Germany, Australia, Israel and France. New geographies are Italy, Spain, Netherlands, Ireland and Sweden and Denmark. Markets that we are adding as testing are Japan, Mexico, Korea, Belgium and a few others. But this year, only 2% of revenue came from new countries and the 15% came from existing countries. So basically, the majority of the growth came from countries that we already were active in.

Dara Mohsenian, Analyst

That's very helpful. And then just one on METHODIQ. Just high level, any thoughts after you've done some testing there on how much ability the platform has to bring in new customers to the ODDITY franchise and perhaps over time, indirectly drive beauty sales and cross-sell? And just as you see initial interest in the platform, how much of that is coming from your existing consumer base versus a new consumer base?

Oran Holtzman, Co-Founder and CEO

Every new country is completely new because we don't have users there. So that's why it costs more because we don't have any existing users.

Lindsay Drucker Mann, Global CFO

Oran, his question is on METHODIQ. The question is on METHODIQ, right there.

Oran Holtzman, Co-Founder and CEO

Sorry, I couldn't hear you. Yes, sorry. In terms of METHODIQ, yes, of course, like SpoiledChild, when we started, the majority of revenue came from IL MAKIAGE, and we expect that a decent percentage will come from IL MAKIAGE and SpoiledChild for METHODIQ. Of course, we are also doing user acquisition because we want to expand our user base. So it will be mixed. Over time, of course, when the brand grows, then we will have more acquisition, but we are doing both.

Operator, Operator

Our next question is from Anna Lizzul with Bank of America.

Anna Lizzul, Analyst

On METHODIQ, just wondering in terms of how we should be thinking about this brand for '26. Just wondering if you can continue to elaborate on how you're thinking about new customer acquisition for METHODIQ. Just how can we think about it incrementally versus SpoiledChild and IL MAKIAGE? And just in terms of the investments that you're making, we previously expected, I guess, a larger headwind on the second half in SG&A, and the guidance for Q4 implies that this might not be as bad as we previously expected. So I was wondering if you can comment on this also for the beginning of '26 in the context of the new brand launch.

Oran Holtzman, Co-Founder and CEO

I will start with high level. Our expectation from METHODIQ Brand 3 is to scale faster than SpoiledChild, which was one of the best D2C launches of all time. Our expectation here is to see even bigger numbers. In terms of contribution due to the fact that it's relatively small, like SpoiledChild did $25 million in year 1. And even if we do a bit more, still comparing to our next year revenue goal is still tiny. So Lindsay, if you want to touch regarding contribution for both top line and bottom line and METHODIQ.

Lindsay Drucker Mann, Global CFO

We are not ready to outline specific plans for METHODIQ in 2026. However, we are very optimistic about the brand in the long term. METHODIQ is a telehealth platform designed entirely around the customer’s needs. Oran mentioned the exceptional treatments we've developed, which adhere to the highest standards of care and offer truly personalized experiences, accessible online. Our current focus is on dermatology, a sector we know well since about half of our IL MAKIAGE and SpoiledChild users on the ODDITY platform have indicated concerns like acne, dark spots, and eczema. This makes it a strategic starting point for us. There is nothing else like it available in the market, and we are genuinely excited despite being in the early stages. We had a timely soft launch in the third quarter and formally launched this week, receiving strong early feedback, though we recognize there is still much work to be done regarding scaling and timing. Regarding our SG&A guidance for Q4 compared to prior periods, historically, we prefer to provide guidance on revenue and EBITDA while allowing flexibility in gross margin for our team. We aim to guide conservatively which enables them to pursue products that yield the best direct contribution margin. We focus on revenue and EBITDA figures, so I wouldn’t dwell too much on the gross margin aspect. We still have substantial investments planned for our growth initiatives, including METHODIQ in the fourth quarter, and we previously discussed growth investments for the first half of 2026.

Operator, Operator

Our next question is from Youssef Squali with Truist Securities.

Youssef Squali, Analyst

I have 2, maybe just starting with one, Oran. We've seen a pretty mixed bag of earnings from various consumer-oriented companies this earnings season. I think you alluded to that a little bit in your prepared remarks. Can you maybe speak to your views about the health of the U.S. consumer right now and some of the things that you guys are doing in particular, just to help ODDITY buck that trend? And I have another question.

Oran Holtzman, Co-Founder and CEO

Sure. Yes, like we see what you guys see regarding softness from the outside. But internally, as you can see based on our results, revenue is still according to plan, even better. Margin was strong. This is despite the fact that we see higher acquisition costs. And the main reason that we can offset it is just like the massive repeat that we have. And when I try to think about the way to think or to answer regarding softness, the first thing that I look at is obviously acquisition, but the second part is repeat. So yes, acquisition is higher, but repeat is getting way higher every quarter. And therefore, we are not impacted.

Youssef Squali, Analyst

Okay. Okay, that's great to hear. And then Lindsay, I know you're not guiding quite yet to 2026. But is the growth algorithm for 2026 any different from what we've expected or what we've heard from you guys up until this point, which is committing to basically 20% top line, about 20% adjusted EBITDA margins? And maybe within that, maybe just talk about the marketing efficiency in the business that you're seeing.

Lindsay Drucker Mann, Global CFO

Yes, we're not ready to give 2026 specific guidance. We'll give that when we issue our Q4 earnings results, but there's no change to our algorithm of 20% revenue growth and 20% adjusted EBITDA margin. And you heard Oran reiterate in his remarks earlier that the other sort of medium-term guidance that we've given for IL MAKIAGE to deliver $1 billion by 2028, there's no change to that either. So business continues to be on a very healthy footing. As far as media efficiency goes, you heard Oran comment, we did have some higher acquisition costs. In my remarks, I mentioned the environment has actually improved for us as we've gotten into the fourth quarter. Overall, SG&A in the third quarter was up around 30%, and that's including some of the increased spending initiatives that we have, for example, for METHODIQ, ODDITY LABS, et cetera. So it's been very manageable for us, and we're feeling really good as we head into Q4.

Operator, Operator

Our next question is from Andrew Boone with Citizens.

Andrew Boone, Analyst

Lindsay, as we think about METHODIQ being added to the model, is there anything that we should keep in mind in terms of the different financial profile, whether that be different AOVs, whether that be different margin profiles? Is there anything we should be considering as we think about the next 3 years and layering in that brand? And then on ODDITY LABS, it's great to see molecules start to contribute to the portfolio in 2026. Can you guys just help us understand what the expectation is of proprietary molecules? It feels like a step function change in terms of what you guys can bring to market. How do we think about that? And then what's the path beyond those 8 initial products? How do we think beyond this first step?

Lindsay Drucker Mann, Global CFO

In terms of the financial outlook for METHODIQ, we envision this brand operating similarly to IL MAKIAGE and SpoiledChild, aiming for sustained revenue growth of 20% annually and an adjusted EBITDA margin of 20%. We anticipate strong unit economics for the overall category and believe METHODIQ will excel in key performance indicators, particularly regarding repeat business and metrics that contribute to lifetime value. For the prescription product specifically, we expect lower gross margins initially, as we typically encounter inefficiencies in gross margins during the launch phase. The necessity of a third-party physician network and compounding pharmacies will incur additional costs. While the majority of the business will not be prescription-based, some of the costs associated with prescriptions will affect gross margins. Nonetheless, we anticipate a strong repeat business that will enhance direct-to-consumer margins. Although it may be too soon for further detailed insights, we are eager to share more as we move forward after the 2026 launch. Regarding ODDITY LABS, in 2024, we made a strategic shift by extending our development timelines to concentrate on creating molecules that offer significantly higher efficacy and better performance than existing market options. We recognized that this decision would postpone some product launches, but we believe it is a worthwhile trade-off for superior results. We expect to have 8 products available by 2026 for our current brands, with 4 of those being from METHODIQ. The products under the METHODIQ brand are highly innovative and meet critical consumer demands, which excites us greatly. Additionally, we have many more projects in development, including some molecules we plan to introduce with Brand 4 and more. Overall, we are very pleased with the significant improvements resulting from our efforts in ODDITY LABS.

Oran Holtzman, Co-Founder and CEO

I would just add that when we started labs, we began and then built it again. It was challenging since it was our first experience with something like this. The fact that so many products and molecules are coming to market this year indicates that our efforts were correct, and there has been genuine progress in labs. We anticipate maintaining this pace and even increasing it in the coming years. It is very encouraging that both METHODIQ and our IL MAKIAGE and SpoiledChild brands will receive molecules this year. This again highlights the significant strength and progress we have made over the past 1.5 years.

Operator, Operator

Our next question is from Cory Carpenter with JPMorgan.

Cory Carpenter, Analyst

I have 2, Lindsay, probably both for you. Just hoping you could expand on the comments around the media environment and higher acquisition costs now going a little lower. And anything in particular to call out on the search channel? And then capital allocation, you have a healthy cash balance. You have not purchased shares since the convert earlier this year. So maybe if you could just refresh us on your capital allocation priorities.

Lindsay Drucker Mann, Global CFO

On the media front, media costs have consistently risen each year, but we have effectively mitigated these expenses through increased repeat business and other improvements across our key performance indicators, including conversion. This strategy has enabled us to maintain a robust and profitable business, with repeat business accounting for approximately two-thirds of our total operations. We are very pleased to report that our net revenue repeat cohorts, such as the 12-month cohorts we analyze, remain exceptionally strong. This indicates that the consumer environment is still healthy, providing a solid foundation for our ongoing performance. Currently, our cash position is very strong, with nearly $800 million in cash equivalents and investments on our balance sheet. After issuing the convertible earlier this year, we consider it a form of efficient, patient capital that gives us the flexibility to make decisions. We have the option to use these funds for share buybacks or mergers and acquisitions, and we feel confident in our ability to be patient and selective in our allocation choices.

Operator, Operator

Our next question is from Ryan MacDonald with Needham & Company.

Ryan MacDonald, Analyst

Congrats on a great quarter. As you look at the international success into the test market, can you talk about how replicable like the data model in terms of targeting subscribers and new users and then sort of identifying maybe more local or geographic differences in terms of what their needs product-wise might be just as you continue to scale that international efforts? And then is your intent to immediately go international with METHODIQ right away? Or are you going to take sort of a more measured sort of region-by-region approach like you've done with other brands in the past?

Oran Holtzman, Co-Founder and CEO

Sure. First of all, concerning METHODIQ, we initially focused only on the U.S. because it's already complex enough without expanding internationally. Similarly, for nearly the first three years of SpoiledChild, we didn't even explore international markets. We plan to approach METHODIQ in the same way. While I'm not sure it will take three years, I think it will take at least that long. The reason we conduct tests, as you mentioned, is important. When I refer to testing, we start by launching a localized website and investing in marketing to attract new users in those countries. We then evaluate satisfaction, repeat business, and unit economics before determining if the market is right for us. This has been our strategy for the past 2.5 years.

Operator, Operator

Our next question is from Scott Schoenhaus with KeyBanc Capital Markets.

Scott Schoenhaus, Analyst

Lindsay, you mentioned that the majority of revenues are coming from nonprescription volumes compared to prescription. Will the four molecules also be aimed at nonprescription instead of prescription? Additionally, regarding the prescription side, you've established a physician network, but there is a clear shortage of dermatologists. How are you planning to utilize technology to engage more dermatologists in your network for patient care?

Lindsay Drucker Mann, Global CFO

Thank you, Scott. The four products we have are not prescription medications; they are a mix of over-the-counter and cosmetic items. We are very excited to launch them, but to clarify, they are not prescription products. For ODDITY LABS, we do not plan to introduce prescription products in the near to medium term; everything will remain either over-the-counter or cosmetic. Regarding our physician network, we are currently working with third-party partners but haven't internalized that yet. However, we may consider bringing it in-house for cost efficiency in the future. At present, we are utilizing a network of all board-certified physicians, though not exclusively dermatologists. As we develop our program, we could expand to include nurse practitioners and other medical professionals later on. We are initiating our efforts with all physicians while we learn and grow. From a technological perspective, we are enhancing our capabilities to ensure that clinicians receive the best possible information to support treatment decisions based on the data collected during the METHODIQ intake and onboarding process. This includes vital contextual information such as demographics and medical history, similar to what one would gather during an in-office visit. Our vision tools are also capturing critical signals like the number of lesions and their intensity, which are valuable for clinicians when determining treatment plans. This integration of our technology with provider systems streamlines the clinician interface and helps them utilize our tools effectively. Lastly, the METHODIQ app has features for feedback, progress monitoring, and direct communication with clinicians, all of which significantly enhance patient confidence, compliance, and overall success in treatment outcomes.

Operator, Operator

Our next question is from Bonnie Herzog with Goldman Sachs.

Bonnie Herzog, Analyst

I just have a question on IL MAKIAGE and SpoiledChild. Growth in the U.S. remains strong double digits for these brands, but it has moderated year-to-date versus last year. So could you talk about what's driving this? And if the low 20% growth in the U.S. for these 2 brands is doable over the next few years? Or should we expect a continued slowdown? I guess I'm asking especially for IL MAKIAGE. Also, could you touch on repeat rates for the brands and if these rates are also moderating?

Oran Holtzman, Co-Founder and CEO

I will start by saying...

Lindsay Drucker Mann, Global CFO

Go ahead.

Oran Holtzman, Co-Founder and CEO

Yes, I would just start by saying that as I mentioned before, we manage growth across brands and geographies. So I don't wake up tomorrow and say, today, I need to see 25% IL MAKIAGE in the U.S. We see we look more broader and we maximize the potential based on what we see in real time. So if Germany is working better on a specific day, this is where we push more and vice versa with SpoiledChild. Lindsay, do you want to touch repeat?

Lindsay Drucker Mann, Global CFO

Yes. I mean just to add on that, like we are driving growth at the ODDITY level and our growth targets we're managing growth towards 20%. We don't want to grow faster than that. And so ever since our IPO, we have been very clear and explicit about our plans to sustain 20% compounded durable growth. And that's exactly what we've been delivering on, and we're managing it at the ODDITY level, and we'll pull different levers within the different brands. Specific to IL MAKIAGE, our target is to get to $1 billion by 2028, and we've always talked about international being an important piece of that. And so you're seeing us flex on the international part now. At the same time, we want to make sure we're feeding SpoiledChild and now we have a third baby to give oxygen to. So we're managing it as a portfolio in order to deliver an overall ODDITY level growth. I think in terms of repeat, no, repeats continue to be very, very strong.

Operator, Operator

Our next question is from Georgia Anderson with Evercore ISI.

Georgia Anderson, Analyst

I was wondering if you could talk a little bit about the TAM for METHODIQ. Are you guys kind of defining this as all chronic skin sufferers in the U.S. or globally? Or is it a narrow cohort, acne or eczema patients are willing to pay out of pocket? And then just kind of in terms of measuring success of the brand, do you have any milestones or KPIs that would give you confidence that METHODIQ is scaling towards its full TAM?

Oran Holtzman, Co-Founder and CEO

Lindsay, I'll start with the KPIs and you'll talk about TAM.

Lindsay Drucker Mann, Global CFO

Yes.

Oran Holtzman, Co-Founder and CEO

So like we soft launched in September, official launch this week. So of course, very early. But based on what we see early, the demand is there. The KPIs that we look at now are user acquisition, repeat, app downloads, open rates, weekly check-ins. And when we see that those KPIs as we envision they are, then we will start scaling.

Lindsay Drucker Mann, Global CFO

In terms of the TAM, the right way we think to look at this is number of people rather than dollar size. And the reason for that is because it's such a high friction market and one that hasn't been run well that we think if you actually can unleash some technology that leads to better outcomes and easier outcomes for people to access, you're going to see the overall market grow. And for these chronic skin conditions like acne and hyperpigmentation and eczema, I mean, your solutions are, number one, go to a dermatologist. Oran talked about 2/3 of U.S. counties don't even have a dermatologist. Your average wait times are over a month. People spend hours commuting to and from plus sitting in the waiting room and waiting for a doctor's office. So it's a real pain in the neck, and it's not a great experience. So it's something people avoid. And then your alternative of going to the drugstore, bouncing around with low efficacy products that don't really work, it's overall stifled the total potential size of the market. We think that by really opening up this much better user experience, highest standards of care, world-class treatments made available easily to everybody online, you're actually going to see the overall market size grow. And that's why we're unleashing we think it's like probably the biggest wave of innovation to dermatology in decades and maybe ever. So we're really excited about it. And then if you look at just the number of the people, which is what we think is the right way to look at it in America, you've got 50 million Americans, around 50 million with acne, around 30 million with dark spots/hyperpigmentation, around 30 million with eczema. And just on our platform alone, we see the deep prevalence of these issues. A lot of people are buying foundation from IL MAKIAGE already to cover them up. So it's a natural place now that we have new tools and an effective way to address it for us to expand into.

Operator, Operator

Our next question is from Lauren Lieberman with Barclays.

Lauren Lieberman, Analyst

I was interested in discussing the launch plans for METHODIQ and any insights from spoils, particularly since I remember you used billboards for that. I see you're applying similar strategies with METHODIQ. You mentioned this being a significant TikTok activation, so I'm curious about the decision-making process for the non-online aspects of the launch and how long you anticipate maintaining these major TikTok activations. It certainly draws a lot of attention for a few days, but what is your perspective on sustaining that ongoing TikTok presence to build brand awareness?

Oran Holtzman, Co-Founder and CEO

Sure. So it's the third brand that we are launching, and we've done the same more or less with all 3 offline activation out of the gate for IL MAKIAGE, SpoiledChild and now in New York, we have the same with METHODIQ. Regarding TikTok, it's the biggest campaign that we've done so far. And we started now, and we plan to continue until end of Q1.

Operator, Operator

Our next question is from Brian Tanquilut with Jefferies.

Brian Tanquilut, Analyst

Congrats on the quarter. Maybe I'll follow up on Bonnie's question from earlier. As I think through the makeup of the growth rate for the quarter, very strong growth, obviously. How should we be thinking about volume versus pricing versus mix in that growth rate for the different product lines?

Lindsay Drucker Mann, Global CFO

The biggest driver of the vast majority of our revenue is driven just purely by orders. AOV was down around 1%, so essentially flat and order growth historically and in the future will be the dominant driver of our revenue growth.

Brian Tanquilut, Analyst

Understand. And if I may ask a follow-up, my follow-up question would just be, as we think about METHODIQ, is this going to be primarily a compounded drug product offering? Or is there a noncompounded version here? And how should we be thinking about like margin differentials between the 2, if that was the case?

Lindsay Drucker Mann, Global CFO

So the business today is a combination of nonprescription and prescription. Like we said, we think the prescription will be the smaller part of the business. And within the prescription, we're contemplating compounded products today with potential in the future, of course, to evolve, but that's the business model now.

Operator, Operator

We have reached the end of our question-and-answer session. I would like to turn the conference back over to Oran for closing remarks.

Oran Holtzman, Co-Founder and CEO

Thank you very much for joining us today. See you next quarter, guys. Bye-bye.

Operator, Operator

Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.