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Oddity Tech Ltd

Oddity Tech LtdODDEarnings & Financial Report

Nasdaq

Oddity Tech Ltd is a global consumer technology company focused on the beauty and wellness sector. It leverages advanced artificial intelligence and data science to develop personalized, high-performance products, operating popular direct-to-consumer brands including Il Makiage and SpoiledChild, serving customers across North America, Europe and other key global markets primarily via e-commerce channels.

What changed in Oddity Tech Ltd's 20-F — 2023 vs 2024

Top changes in Oddity Tech Ltd's 2024 20-F

510 paragraphs added · 618 removed · 404 edited across 6 sections

Item 2. Properties

Properties — owned and leased real estate

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ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 4 ​ ITEM 3. KEY INFORMATION 4 ​ ​ A. [Reserved] 4 ​ ​ B. Capitalization and Indebtedness 4 ​ ​ C. Reasons for the Offer and Use of Proceeds 4 ​ ​ D. Risk Factors 4 ​ ITEM 4. INFORMATION ON THE COMPANY 57 ​ ​ A.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 4 ​ ITEM 3. KEY INFORMATION 4 ​ ​ A. [Reserved] 4 ​ ​ B. Capitalization and Indebtedness 4 ​ ​ C. Reasons for the Offer and Use of Proceeds 4 ​ ​ D. Risk Factors 4 ​ ITEM 4. INFORMATION ON THE COMPANY 58 ​ ​ A.
Board Practices and Corporate Governance 106 ​ ​ D. Employees 117 ​ ​ E. Share Ownership 117 ​ ​ F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation 117 ​ ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 117 ​ ​ A. Major Shareholders 117 ​ ​ B. Related Party Transactions 119 ​ ​ C.
Board Practices and Corporate Governance 96 ​ ​ D. Employees 106 ​ ​ E. Share Ownership 106 ​ ​ F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation 107 ​ ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 107 ​ ​ A. Major Shareholders 107 ​ ​ B. Related Party Transactions 109 ​ ​ C.
History and Development of the Company 57 ​ ​ B. Business Overview 58 ​ ​ C. Organizational Structure 79 ​ ​ D. Property, Plants and Equipment 79 ​ ITEM 4A UNRESOLVED STAFF COMMENTS 79 ​ ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 79 ​ ​ A. Operating Results 80 ​ ​ B.
History and Development of the Company 58 ​ ​ B. Business Overview 59 ​ ​ C. Organizational Structure 69 ​ ​ D. Property, Plants and Equipment 69 ​ ITEM 4A UNRESOLVED STAFF COMMENTS 69 ​ ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 70 ​ ​ A. Operating Results 70 ​ ​ B.
Interests of Experts and Counsel 123 ​ ITEM 8. FINANCIAL INFORMATION 123 ​ ​ A. Consolidated Statements and Other Financial Information 123 ​ ​ B. Significant Changes 124 ​
Interests of Experts and Counsel 113 ​ ITEM 8. FINANCIAL INFORMATION 114 ​ ​ A. Consolidated Statements and Other Financial Information 114 ​ ​ B. Significant Changes 114 ​
Liquidity and Capital Resources 88 ​ ​ C. Research and Development, Patents and Licenses 91 ​ ​ D. Trend Information 91 ​ ​ E. Critical Accounting Estimates 91 ​ ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 93 ​ ​ A. Executive Officers and Directors 93 ​ ​ B. Compensation 95 ​ ​ C.
Liquidity and Capital Resources 78 ​ ​ C. Research and Development, Patents and Licenses 81 ​ ​ D. Trend Information 81 ​ ​ E. Critical Accounting Estimates 81 ​ ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 83 ​ ​ A. Executive Officers and Directors 83 ​ ​ B. Compensation 85 ​ ​ C.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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The market price of our Class A ordinary shares could be highly volatile and may fluctuate substantially as a result of many factors, including the following: ● actual or anticipated fluctuations in our revenue, financial condition, and results of operations; ● variance in our financial performance from the expectations of securities analysts; ● announcements by us or our direct or indirect competitors of significant business developments, changes in service provider relationships, acquisitions, or expansion plans; ● changes or proposed changes in laws or regulations or differing interpretations or enforcement of laws or regulations affecting our business; ● changes in our pricing model; ● our involvement in litigation or regulatory actions; ● sales of our Class A ordinary shares by us or our shareholders, including any sales of Class B ordinary shares, which will automatically convert into Class A ordinary shares upon transfer thereof; ● market conditions in our industry; 47 Table of Contents ● changes in key personnel; ● the trading volume of our ordinary shares; ● publication of research reports or news stories about us, our competition, or our industry, or positive or negative recommendations or withdrawal of research coverage by securities analysts; ● changes in the estimation of the future size and growth rate of our markets; and ● general economic and market conditions.
The market price of our Class A ordinary shares could be highly volatile and may fluctuate substantially as a result of many factors, including the following: ● actual or anticipated fluctuations in our revenue, financial condition, and results of operations; ● variance in our financial performance from the expectations of securities analysts; ● announcements by us or our direct or indirect competitors of significant business developments, changes in service provider relationships, acquisitions, or expansion plans; ● changes or proposed changes in laws or regulations or differing interpretations or enforcement of laws or regulations affecting our business; ● changes in our pricing model; 48 Table of Contents ● our involvement in litigation or regulatory actions; ● sales of our Class A ordinary shares by us or our shareholders, including any sales of Class B ordinary shares, which will automatically convert into Class A ordinary shares upon transfer thereof; ● market conditions in our industry; ● changes in key personnel; ● the trading volume of our ordinary shares; ● publication of research reports or news stories about us, our competition, or our industry, or positive or negative recommendations or withdrawal of research coverage by securities analysts; ● changes in the estimation of the future size and growth rate of our markets; and ● general economic and market conditions.
We may not be able to maintain and enhance our brand if we experience negative publicity related to our marketing efforts or use of social media, fail to maintain and grow our network of content creators, or otherwise fail to meet our customers’ expectations. 4 Table of Contents ● We rely on single source suppliers for certain component materials of our products and the loss of suppliers or shortages or disruptions in the supply of raw materials or finished products could adversely affect our business, financial condition, and results of operations. ● If we are unable to accurately forecast consumer demand, manage our inventory and plan for future expenses, our business, financial condition, and results of operations could be adversely affected. ● Our recent rapid growth may not be sustainable or indicative of future growth, and we expect our growth rate to ultimately slow over time. ● If we do not continue to successfully introduce and effectively market new brands, or develop and introduce new, innovative, and updated products, our ability to continue to grow may be adversely affected and we may not be able to maintain or increase our sales and profitability.
We may not be able to maintain and enhance our brand if we experience negative publicity related to our marketing efforts or use of social media, fail to maintain and grow our network of content creators, or otherwise fail to meet our customers’ expectations. 4 Table of Contents ● We rely on single source suppliers for certain component materials of our products and the loss of suppliers or shortages or disruptions in the supply of raw materials or finished products could adversely affect our business, financial condition, and results of operations. ● If we are unable to accurately forecast customer demand, manage our inventory and plan for future expenses, our business, financial condition, and results of operations could be adversely affected. ● Our recent rapid growth may not be sustainable or indicative of future growth, and we expect our growth rate to ultimately slow over time. ● If we do not continue to successfully introduce and effectively market new brands, or develop and introduce new, innovative, and updated products, our ability to continue to grow may be adversely affected and we may not be able to maintain or increase our sales and profitability.
If our performance metrics are not, or are not perceived to be, accurate representations of our business, if we discover material inaccuracies in our metrics or the data on which such metrics are based, or if we can no longer calculate any of our key performance metrics with a sufficient degree of accuracy, investors could lose confidence in the accuracy and completeness of such metrics, which could cause the price of our Class A ordinary shares to decline.
If our performance metrics are not, or are not perceived to be, accurate representations of our business, if we discover material inaccuracies in our metrics or the data on which such metrics are based, or if we can no longer calculate any of our performance metrics with a sufficient degree of accuracy, investors could lose confidence in the accuracy and completeness of such metrics, which could cause the price of our Class A ordinary shares to decline.
Regulation of cookies and similar technologies, and any decline of cookies or similar online tracking technologies as a means to identify and potentially target individuals, may lead to broader restrictions and impairments on our marketing and personalization activities, may negatively impact our efforts to understand consumers, and, as a result of us being able to process less data, make our AI process less accurate. 33 Table of Contents In addition, we are also subject to the Israeli Privacy Protection Law, 5741-1981 (the “PPL”), and its regulations, including the Israeli Privacy Protection Regulations (Data Security), 5777-2017 (the “Data Security Regulations”), which impose obligations with respect to the manner in which personal data is processed, maintained, transferred, disclosed, accessed, and secured, as well as the guidelines of the Israeli Privacy Protection Authority.
Regulation of cookies and similar technologies, and any decline of cookies or similar online tracking technologies as a means to identify and potentially target individuals, may lead to broader restrictions and impairments on our marketing and personalization activities, may negatively impact our efforts to understand consumers, and, as a result of us being able to process less data, make our AI process less accurate. 34 Table of Contents In addition, we are also subject to the Israeli Privacy Protection Law, 5741-1981 (the “PPL”), and its regulations, including the Israeli Privacy Protection Regulations (Data Security), 5777-2017 (the “Data Security Regulations”), which impose obligations with respect to the manner in which personal data is processed, maintained, transferred, disclosed, accessed, and secured, as well as the guidelines of the Israeli Privacy Protection Authority.
We also cannot ensure that any limitations of liability provisions in our customer agreements, contracts with third-party service providers, and other contracts for a security lapse or breach or other security-related matter would be enforceable or adequate or would otherwise protect us from any liabilities or damages with respect to any particular claim. 36 Table of Contents Unauthorized access, disclosure, or other loss or unauthorized use of information or data, whether actual or perceived, could result in legal claims or proceedings, regulatory investigations or actions, and other types of liability under laws that protect the privacy and security of personal information, including federal, state, local, and foreign data privacy and security laws, rules, regulations, and standards, violations of which could result in significant penalties and fines.
We also cannot ensure that any limitations of liability provisions in our customer agreements, contracts with third-party service providers, and other contracts for a security lapse or breach or other security-related matter would be enforceable or adequate or would otherwise protect us from any liabilities or damages with respect to any particular claim. 37 Table of Contents Unauthorized access, disclosure, or other loss or unauthorized use of information or data, whether actual or perceived, could result in legal claims or proceedings, regulatory investigations or actions, and other types of liability under laws that protect the privacy and security of personal information, including federal, state, local, and foreign data privacy and security laws, rules, regulations, and standards, violations of which could result in significant penalties and fines.
The laws are not consistent, and compliance in the event of a widespread data breach is costly. 30 Table of Contents For example, the California Consumer Privacy Act (the “CCPA”), which became effective in January 2020, gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used by requiring covered companies to provide new disclosures to California consumers (as that term is broadly defined and may include any of our current or future employees who may be California residents) and provide such residents new ways to opt out of certain sales of personal information.
The laws are not consistent, and compliance in the event of a widespread data breach is costly. 31 Table of Contents For example, the California Consumer Privacy Act (the “CCPA”), which became effective in January 2020, gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used by requiring covered companies to provide new disclosures to California consumers (as that term is broadly defined and may include any of our current or future employees who may be California residents) and provide such residents new ways to opt out of certain sales of personal information.
We may be required to invest significant resources in protecting against security breaches and other technological disruption, or to remediate problems and damages caused by such incidents, which could increase the cost of our business and in turn adversely affect our business, financial condition, and results of operations. 37 Table of Contents Ultimately, any actual or perceived failure to maintain the performance, reliability, security, and availability of our platform and technical infrastructure to the satisfaction of our customers and certain regulators could harm our reputation and result in loss of revenue from the adverse impact to our reputation and brand, disruption to our business, and our decreased ability to attract and retain customers.
We may be required to invest significant resources in protecting against security breaches and other technological disruption, or to remediate problems and damages caused by such incidents, which could increase the cost of our business and in turn adversely affect our business, financial condition, and results of operations. 38 Table of Contents Ultimately, any actual or perceived failure to maintain the performance, reliability, security, and availability of our platform and technical infrastructure to the satisfaction of our customers and certain regulators could harm our reputation and result in loss of revenue from the adverse impact to our reputation and brand, disruption to our business, and our decreased ability to attract and retain customers.
We track certain key operating metrics using internal data analytics tools, which have certain limitations. In addition, we rely on data received from third parties, including third-party platforms, to track certain performance indicators, and we may be limited in our ability to verify such data.
We track certain operating metrics using internal data analytics tools, which have certain limitations. In addition, we rely on data received from third parties, including third-party platforms, to track certain performance indicators, and we may be limited in our ability to verify such data.
Changes may require us to reformulate or discontinue certain of our products or revise our product packaging or labeling, any of which could result in, among other things, increased costs to us, delays in our product launches, product returns or recalls, and lower net revenue, and therefore could have an adverse effect on our business, financial condition, and results of operations. 21 Table of Contents Government regulation, both in the United States and internationally, of the internet and e-commerce is evolving, and unfavorable changes or failure by us to comply with these regulations could adversely affect our business, financial condition, and results of operations.
Changes may require us to reformulate or discontinue certain of our products or revise our product packaging or labeling, any of which could result in, among other things, increased costs to us, delays in our product launches, product returns or recalls, and lower net revenue, and therefore could have an adverse effect on our business, financial condition, and results of operations. 22 Table of Contents Government regulation, both in the United States and internationally, of the internet and e-commerce is evolving, and unfavorable changes or failure by us to comply with these regulations could adversely affect our business, financial condition, and results of operations.
Costs and potential problems and interruptions associated with the implementation of new or upgraded systems and technology or with maintenance or adequate support of existing systems could disrupt or reduce the efficiency of our operations. 35 Table of Contents In addition, as part of our normal business activities, we collect, store, and otherwise process certain confidential information, including personal information with respect to customers and employees, as well as information related to intellectual property, and the success of our e-commerce operations depends on the secure transmission of confidential and personal information over public networks, including the use of cashless payments.
Costs and potential problems and interruptions associated with the implementation of new or upgraded systems and technology or with maintenance or adequate support of existing systems could disrupt or reduce the efficiency of our operations. 36 Table of Contents In addition, as part of our normal business activities, we collect, store, and otherwise process certain confidential information, including personal information with respect to customers and employees, as well as information related to intellectual property, and the success of our e-commerce operations depends on the secure transmission of confidential and personal information over public networks, including the use of cashless payments.
There are also other risks and costs inherent in doing business in international markets, including: ● the need to adapt and localize products for specific countries to account for, among other things, different cultural tastes, size and fit preferences, or regulatory requirements; ● difficulty establishing and managing international operations and the increased operations, travel, infrastructure, including establishment of local delivery service and customer service operations, and legal compliance costs associated with locations in different countries or regions; ● increased shipping times to and from international markets; 14 Table of Contents ● the need to vary pricing and margins to effectively compete in international markets; ● increased competition from local providers of similar products; ● difficulty obtaining, maintaining, protecting, defending, and enforcing intellectual property rights abroad; ● the need to offer customer services in various languages; ● difficulties in understanding and complying with local laws, regulations, and customs in other jurisdictions; ● compliance with anti-bribery laws, such as the U.S.
There are also other risks and costs inherent in doing business in international markets, including: ● the need to adapt and localize products for specific countries to account for, among other things, different cultural tastes, size and fit preferences, or regulatory requirements; ● difficulty establishing and managing international operations and the increased operations, travel, infrastructure, including establishment of local delivery service and customer service operations, and legal compliance costs associated with locations in different countries or regions; ● increased shipping times to and from international markets; ● the need to vary pricing and margins to effectively compete in international markets; ● increased competition from local providers of similar products; ● difficulty obtaining, maintaining, protecting, defending, and enforcing intellectual property rights abroad; ● the need to offer customer services in various languages; ● difficulties in understanding and complying with local laws, regulations, and customs in other jurisdictions; ● compliance with anti-bribery laws, such as the U.S.
Risks associated with our e-commerce business include: ● uncertainties associated with our websites and in-store systems including changes in required technology interfaces, website downtime and other technical failures, costs, and technical issues as we upgrade our systems software, inadequate system capacity, computer viruses, human error, data breaches and other security incidents, legal claims related to our systems operations, and other challenges with order fulfillment; ● changes in website interfaces, website downtime, and other technical failures; 15 Table of Contents ● disruptions in internet service or power outages; ● reliance on third parties for computer hardware and software, as well as delivery of products to our customers; ● rapid technology changes; ● credit or debit card fraud and other payment processing related issues; ● changes in applicable federal, state, and international regulations; ● liability for online content; ● cybersecurity and data privacy concerns and laws, rules, and regulations; and ● natural disasters or adverse weather conditions.
Risks associated with our e-commerce business include: ● uncertainties associated with our websites and in-store systems including changes in required technology interfaces, website downtime and other technical failures, costs, and technical issues as we upgrade our systems software, inadequate system capacity, computer viruses, human error, data breaches and other security incidents, legal claims related to our systems operations, and other challenges with order fulfillment; ● disruptions in internet service or power outages; ● reliance on third parties for computer hardware and software, as well as delivery of products to our customers; ● rapid technology changes; ● credit or debit card fraud and other payment processing related issues; ● changes in applicable federal, state, and international regulations; ● liability for online content; ● cybersecurity and data privacy concerns and laws, rules, and regulations; and ● natural disasters or adverse weather conditions.
We may be subject to investigations, fines or complaints; we may be required to cease our use of certain vendors and products; we may be required to implement new internal policies within a specified time frame with regards to data storage, management and transfer; and/or it could otherwise affect our business, our provision of services, and our finances. 32 Table of Contents These recent developments may require us to review and amend the legal mechanisms by which we transfer personal data from the EEA and the U.K.
We may be subject to investigations, fines or complaints; we may be required to cease our use of certain vendors and products; we may be required to implement new internal policies within a specified time frame with regards to data storage, management and transfer; and/or it could otherwise affect our business, our provision of services, and our finances. 33 Table of Contents These recent developments may require us to review and amend the legal mechanisms by which we transfer personal data from the EEA and the U.K.
Although the majority of our expenses and revenue are incurred in U.S. dollars, some of our revenue and expenses are generated in other currencies, such as the New Israeli Shekel (“NIS”), Euro, Pound Sterling, or Australian dollar.
Although the majority of our expenses and revenue are incurred in U.S. dollars, some of our revenue and expenses are generated in other currencies, such as the New Israeli Shekel, Euro, Pound Sterling, or Australian dollar.
Additionally, difficulties with implementing new technology systems, delays in our timeline for planned improvements, significant system failures, or our inability to successfully modify our information systems to respond to changes in our business needs may cause disruptions in our business operations and adversely affect our business, financial condition, and results of operations. 41 Table of Contents Our use of open source software could compromise the proprietary nature of our software and expose us to other legal liabilities and technological risks.
Additionally, difficulties with implementing new technology systems, delays in our timeline for planned improvements, significant system failures, or our inability to successfully modify our information systems to respond to changes in our business needs may cause disruptions in our business operations and adversely affect our business, financial condition, and results of operations. 42 Table of Contents Our use of open -source software could compromise the proprietary nature of our software and expose us to other legal liabilities and technological risks.
Our failure to successfully complete the integration of any acquired business or to achieve the long-term plan for such business, as well as any other adverse consequences associated with our acquisition and investment activities, could have an adverse effect on our business. 52 Table of Contents We are not insured against all risks affecting our activities and our insurance coverage may not be sufficient to cover all losses and/or liabilities that may be incurred by our operations.
Our failure to successfully complete the integration of any acquired business or to achieve the long-term plan for such business, as well as any other adverse consequences associated with our acquisition and investment activities, could have an adverse effect on our business. 53 Table of Contents We are not insured against all risks affecting our activities and our insurance coverage may not be sufficient to cover all losses and/or liabilities that may be incurred by our operations.
We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers. 55 Table of Contents We are continuing to improve our internal control over financial reporting.
We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers. 56 Table of Contents We are continuing to improve our internal control over financial reporting.
Any of these events could have an adverse effect on our business, financial condition, and operating results. 23 Table of Contents As a result of our plans to expand our business operations, including to jurisdictions in which tax laws may not be favorable, our tax obligations may change or fluctuate, become significantly more complex, or become subject to greater risk of examination by taxing authorities, any of which could adversely affect our after-tax profitability and financial results.
Any of these events could have an adverse effect on our business, financial condition, and operating results. 24 Table of Contents As a result of our plans to expand our business operations, including to jurisdictions in which tax laws may not be favorable, our tax obligations may change or fluctuate, become significantly more complex, or become subject to greater risk of examination by taxing authorities, any of which could adversely affect our after-tax profitability and financial results.
Despite our efforts to maintain our source code and certain other technologies as trade secrets, it may still be possible for unauthorized third parties to copy our technologies, including our PowerMatch capabilities, and use information that we regard as proprietary to create products and services that compete with ours. 38 Table of Contents We enter into confidentiality and invention assignment agreements with our employees and consultants and enter into confidentiality agreements with other parties who may have access to confidential or proprietary information.
Despite our efforts to maintain our source code and certain other technologies as trade secrets, it may still be possible for unauthorized third parties to copy our technologies, including our PowerMatch capabilities, and use information that we regard as proprietary to create products and services that compete with ours. 39 Table of Contents We enter into confidentiality and invention assignment agreements with our employees and consultants and enter into confidentiality agreements with other parties who may have access to confidential or proprietary information.
If companies or governmental entities block, limit, or otherwise restrict customers from accessing our products and services, our business could be negatively impacted, the number of customers could decline or grow more slowly, and our results of operations could be adversely affected. 42 Table of Contents Our customer engagement on mobile devices depends upon effective operation with mobile operating systems, networks, and standards that we do not control.
If companies or governmental entities block, limit, or otherwise restrict customers from accessing our products and services, our business could be negatively impacted, the number of customers could decline or grow more slowly, and our results of operations could be adversely affected. 43 Table of Contents Our customer engagement on mobile devices depends upon effective operation with mobile operating systems, networks, and standards that we do not control.
As a U.S. listed public company that is not a foreign private issuer, we will incur significant additional legal, accounting and other expenses that we will not incur as a foreign private issuer. 50 Table of Contents As we are a “foreign private issuer” and intend to follow certain home country corporate governance practices, our shareholders may not have the same protections afforded to shareholders of companies that are subject to all corporate governance rules of Nasdaq.
As a U.S. listed public company that is not a foreign private issuer, we will incur significant additional legal, accounting and other expenses that we will not incur as a foreign private issuer. 51 Table of Contents As we are a “foreign private issuer” and intend to follow certain home country corporate governance practices, our shareholders may not have the same protections afforded to shareholders of companies that are subject to all corporate governance rules of Nasdaq.
Additionally, despite our compliance efforts, we may become subject to claims that we have violated the PCI Standard, based on past, present, and future business practices, which could have an adverse impact on our business and reputation. 31 Table of Contents In addition, as we offer new payment options (such as to customers), we may be subject to additional regulations, compliance requirements, fraud, and other risks.
Additionally, despite our compliance efforts, we may become subject to claims that we have violated the PCI Standard, based on past, present, and future business practices, which could have an adverse impact on our business and reputation. 32 Table of Contents In addition, as we offer new payment options (such as to customers), we may be subject to additional regulations, compliance requirements, fraud, and other risks.
We do not currently intend to pay dividends for the foreseeable future. We currently intend to retain any future earnings to finance the operation and expansion of our business and we do not currently expect to declare or pay any dividends in the foreseeable future.
We currently intend to retain any future earnings to finance the operation and expansion of our business and we do not currently expect to declare or pay any dividends in the foreseeable future.
Despite efforts by our suppliers to safeguard their facilities, a number of factors could damage or destroy the manufacturing equipment or our inventory component of supplies or finished goods, cause substantial delays in manufacturing, supply and distribution of our products, result in the loss of key information, and cause us to incur additional expenses, including: ● operating restrictions, partial suspension, or total shutdown of production imposed by regulatory authorities; ● equipment malfunctions or failures; ● technology malfunctions; 8 Table of Contents ● work stoppages; ● damage to or destruction of the facility due to natural disasters including wildfires, earthquakes, or other events; or ● regional or local power shortages.
Despite efforts by our suppliers to safeguard their facilities, a number of factors could damage or destroy the manufacturing equipment or our inventory component of supplies or finished goods, cause substantial delays in manufacturing, supply and distribution of our products, result in the loss of key information, and cause us to incur additional expenses, including: ● operating restrictions, partial suspension, or total shutdown of production imposed by regulatory authorities; ● equipment malfunctions or failures; ● technology malfunctions; ● work stoppages; ● damage to or destruction of the facility due to natural disasters including wildfires, earthquakes, or other events; or ● regional or local power shortages.
Any inquiry into the regulatory status of our products and any related interruption in the marketing and sale of these products could damage our reputation and image in the marketplace. 24 Table of Contents Other U.S. regulatory authorities, such as the FTC and state consumer protection agencies, also govern our products and typically require adequate and reliable scientific substantiation to support any marketing claims.
Any inquiry into the regulatory status of our products and any related interruption in the marketing and sale of these products could damage our reputation and image in the marketplace. 25 Table of Contents Other U.S. regulatory authorities, such as the FTC and state consumer protection agencies, also govern our products and typically require adequate and reliable scientific substantiation to support any marketing claims.
For further discussion, see the section titled “Item 10.E Taxation—Passive Foreign Investment Company.” 51 Table of Contents If a United States person is treated as owning 10% or more of our shares, such holder may be subject to adverse U.S. federal income tax consequences.
For further discussion, see the section titled “Item 10.E Taxation—Passive Foreign Investment Company.” 52 Table of Contents If a United States person is treated as owning 10% or more of our shares, such holder may be subject to adverse U.S. federal income tax consequences.
Under these rules, a listed company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including: ● the requirement that a majority of the board of directors be comprised of independent directors; ● the requirement that our compensation committee be comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and 48 Table of Contents ● the requirement that director nominees be selected, or recommended for the board of directors’ selection, either by a majority vote of the board of directors’ independent directors or a nominations committee comprised solely of independent directors.
Under these rules, a listed company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including: ● the requirement that a majority of the board of directors be comprised of independent directors; ● the requirement that our compensation committee be comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and ● the requirement that director nominees be selected, or recommended for the board of directors’ selection, either by a majority vote of the board of directors’ independent directors or a nominations committee comprised solely of independent directors.
If our finished product suppliers are unable to perform, or our relationship with a supplier is terminated, and we are required to find alternative sources of supply, these new suppliers may have to be qualified under applicable industry, governmental, and our own vendor standards, which can require additional investment and be time-consuming.
If our finished product suppliers are unable to perform, or our relationship with a supplier is terminated, and we are required to find alternative sources of supply, these new suppliers may have to be qualified under applicable industry, governmental, and our own vendor standards, which could require additional investment and be time-consuming.
For example, laws in the EEA, the UK, and all 50 U.S. states may require businesses to notify regulators within specific timeframes that a breach affecting personal information has occurred and/or to provide notice to individuals whose personal information has been impacted as a result of such breach.
For example, laws in the EEA, the U.K., and all 50 U.S. states may require businesses to notify regulators within specific timeframes that a breach affecting personal information has occurred and/or to provide notice to individuals whose personal information has been impacted as a result of such breach.
If we fail to obtain, maintain, protect, defend, and enforce our intellectual property rights, our business, financial condition, or results of operations may be harmed. 39 Table of Contents If our trademarks and trade names are not adequately protected, we may not be able to maintain or build name recognition in our markets of interest.
If we fail to obtain, maintain, protect, defend, and enforce our intellectual property rights, our business, financial condition, or results of operations may be harmed. 40 Table of Contents If our trademarks and trade names are not adequately protected, we may not be able to maintain or build name recognition in our markets of interest.
Any of the foregoing could adversely affect our business, financial condition, and results of operations. 40 Table of Contents Proceedings to enforce our intellectual property rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert efforts and resources from other aspects of our business.
Any of the foregoing could adversely affect our business, financial condition, and results of operations. 41 Table of Contents Proceedings to enforce our intellectual property rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert efforts and resources from other aspects of our business.
We have developed and are working to further enhance our internal controls, policies, procedures, and training to ensure compliance by us and our directors, officers, employees, representatives and agents with the FCPA, the Israeli Anti-Corruption Laws, the Bribery Act, and other applicable anti-corruption laws.
We have developed and are working to further enhance our internal controls, policies, procedures, and training to ensure compliance by us and our directors, officers, employees, representatives and agents with the FCPA, the Israeli Anti-Corruption Laws, the U.K. Bribery Act, and other applicable anti-corruption laws.
Based on our market capitalization and the composition of our income, assets, and operations, we believe that we are not a PFIC for the year ended December 31, 2023 and do not expect to be a PFIC for the current taxable year or in the foreseeable future.
Based on our market capitalization and the composition of our income, assets, and operations, we believe that we are not a PFIC for the year ended December 31, 2024 and do not expect to be a PFIC for the current taxable year or in the foreseeable future.
You should not rely on the results of one quarter as an indication of future performance. 53 Table of Contents Certain of our key operating metrics are subject to inherent challenges in measurement, and any real or perceived inaccuracies in our metrics or the underlying data may cause a loss of investor confidence in such metrics and the market price of our Class A ordinary shares may decline.
You should not rely on the results of one quarter as an indication of future performance. 54 Table of Contents Certain of our operating metrics are subject to inherent challenges in measurement, and any real or perceived inaccuracies in our metrics or the underlying data may cause a loss of investor confidence in such metrics and the market price of our Class A ordinary shares may decline.
If we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act, including if we are unable to maintain proper and effective internal controls, we may not be able to produce timely and accurate financial statements.
If we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act, including if in the future we are unable to maintain proper and effective internal controls, we may not be able to produce timely and accurate financial statements.
If any of these events were to occur, our business, results of operations, and financial condition could be materially adversely affected. 22 Table of Contents Regulatory and legislative developments related to climate change may materially adversely affect our business and financial condition.
If any of these events were to occur, our business, results of operations, and financial condition could be materially adversely affected. 23 Table of Contents Regulatory and legislative developments related to climate change may materially adversely affect our business and financial condition.
These rules and regulations significantly increase our accounting, legal, and financial compliance costs and make some activities more time consuming. We expect such expenses to further increase after we are no longer an “emerging growth company.” We also expect these rules and regulations to make it more expensive for us to maintain directors’ and officers’ liability insurance.
These rules and regulations significantly increase our accounting, legal, and financial compliance costs and make some activities more time consuming. We expect such expenses to further increase now that we are no longer an “emerging growth company.” We also expect these rules and regulations to make it more expensive for us to maintain directors’ and officers’ liability insurance.
Department of Treasury’s Office of Foreign Assets Control, the U.S. Department of State, the U.S. Department of Commerce, the United Nations Security Council, the State of Israel, the EU, His Majesty’s Treasury of the United Kingdom, and other relevant sanctions and export control authorities.
Department of Treasury’s Office of Foreign Assets Control, the U.S. Department of State, the U.S. Department of Commerce, the United Nations Security Council, the State of Israel, the EU, His Majesty’s Treasury of the U.K., and other relevant sanctions and export control authorities.
If we identify one or more material weaknesses, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.
Furthermore, if in the future we identify one or more material weaknesses, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.
Problems associated with product recalls could be exacerbated due to the global nature of our business because a recall in one jurisdiction could lead to recalls in other jurisdictions. Recalls of this sort could adversely affect our business, financial condition, and results of operations. 25 Table of Contents Government reviews, inquiries, investigations, and actions could harm our business.
Problems associated with product recalls could be exacerbated due to the global nature of our business because a recall in one jurisdiction could lead to recalls in other jurisdictions. Recalls of this sort could adversely affect our business, financial condition, and results of operations. Government reviews, inquiries, investigations, and actions could harm our business.
Investigations of alleged violations may result in significant diversion of management’s attention and resources and significant defense costs and other professional fees. 27 Table of Contents U.S. public companies are required to maintain records that accurately and fairly represent their transactions and have an adequate system of internal accounting controls.
Investigations of alleged violations may result in significant diversion of management’s attention and resources and significant defense costs and other professional fees. U.S. public companies are required to maintain records that accurately and fairly represent their transactions and have an adequate system of internal accounting controls.
Where they apply, the FCPA, the Bribery Act, and the Israeli Anti-Corruption Laws prohibit us and our officers, directors, employees, and business partners acting on our behalf, including joint venture partners and agents, from corruptly offering, promising, authorizing, or providing anything of value, directly or indirectly, to public officials for the purposes of influencing official decisions or obtaining or retaining business or a business advantage or otherwise obtaining favorable treatment.
Bribery Act, and the Israeli Anti-Corruption Laws prohibit us and our officers, directors, employees, and business partners acting on our behalf, including joint venture partners and agents, from corruptly offering, promising, authorizing, or providing anything of value, directly or indirectly, to public officials for the purposes of influencing official decisions or obtaining or retaining business or a business advantage or otherwise obtaining favorable treatment.
Holtzman, who, as of the December 31, 2023, beneficially owns all of our issued and outstanding Class B ordinary shares, beneficially owns approximately 76.1% of the voting power of our outstanding shares and, as such, will be able to significantly influence matters submitted to our shareholders for approval, including the election of directors, amendments of our organizational documents and any merger or other major corporate transactions that require shareholder approval.
Holtzman, who, as of December 31, 2024, beneficially owns all of our issued and outstanding Class B ordinary shares, beneficially owns approximately 76.2% of the voting power of our outstanding shares and, as such, will be able to significantly influence matters submitted to our shareholders for approval, including the election of directors, amendments of our organizational documents and any merger or other major corporate transactions that require shareholder approval.
Data Privacy Framework (“DPF”), and the EU AI Act; ● varying business practices and customs related to the sale of beauty and wellness products; ● varying levels of internet technology adoption and infrastructure, and increased or varying network and hosting service provider costs; ● tariffs and other non-tariff barriers, such as quotas and local content rules, as well as tax consequences; ● fluctuations in currency exchange rates and the requirements of currency control regulations, which might restrict or prohibit conversion of other currencies into U.S. dollars; and ● political or social unrest or economic instability in a specific country or region in which we operate, including, for example, the effects of the U.K.’s withdrawal from the EU (“Brexit”), which could have an adverse impact on our operations in that location.
Data Privacy Framework (“DPF”), and the EU AI Act; ● varying business practices and customs related to the sale of beauty and wellness products; 15 Table of Contents ● varying levels of internet technology adoption and infrastructure, and increased or varying network and hosting service provider costs; ● tariffs and other non-tariff barriers, such as quotas and local content rules, as well as tax consequences; ● fluctuations in currency exchange rates and the requirements of currency control regulations, which might restrict or prohibit conversion of other currencies into U.S. dollars; and ● political or social unrest or economic instability in a specific country or region in which we operate, including, for example, the effects of the United Kingdom’s (the “U.K.”) withdrawal from the EU (“Brexit”), which could have an adverse impact on our operations in that location.
Additionally, the growth of our business places significant demands on our existing management and other employees. 11 Table of Contents In addition, we are required to manage relationships with a growing number of customers, suppliers, distributors and other third parties.
Additionally, the growth of our business places significant demands on our existing management and other employees. In addition, we are required to manage relationships with a growing number of customers, suppliers, distributors and other third parties.
At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed or operating.
Additionally, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed or operating.
Business Overview—Legal Proceedings.” 20 Table of Contents Our products are subject to U.S. federal, state, and international laws, regulations, and policies that could have an adverse effect on our business, financial condition, and results of operations.
Business Overview—Legal Proceedings.” Our products are subject to U.S. federal, state, and international laws, regulations, and policies that could have an adverse effect on our business, financial condition, and results of operations.
The Bribery Act also includes an offense applicable to corporate entities and partnerships which carry on part of their business in the United Kingdom (the “U.K.”) that fail to prevent bribery, which can take place anywhere in the world, by persons who perform services for or on behalf of them, subject to a defense of having adequate procedures in place to prevent the bribery from occurring.
Bribery Act also includes an offense applicable to corporate entities and partnerships which carry on part of their business in the U.K. that fail to prevent bribery, which can take place anywhere in the world, by persons who perform services for or on behalf of them, subject to a defense of having adequate procedures in place to prevent the bribery from occurring.
If our revenue does not increase at a greater rate than our operating expenses, we will not be able to maintain our current level of profitability. We have a limited operating history at our current scale, which may make it difficult to evaluate our business and future prospects. We have a limited history of generating revenue at our current scale.
If our revenue does not increase at a greater rate than our operating expenses, we will not be able to maintain our current level of profitability. 14 Table of Contents We have a limited operating history at our current scale, which may make it difficult to evaluate our business and future prospects.
Among other things: ● Israeli corporate law regulates mergers and requires that a tender offer be effected when more than a specified percentage of shares in a company are purchased; ● Israeli corporate law does not provide for shareholder action by written consent in public companies, thereby requiring all shareholder actions to be taken at a general meeting of shareholders; ● Israeli corporate law requires special approvals for transactions involving directors, officers, or significant shareholders and regulates other matters that may be relevant to these types of transactions; ● our amended and restated articles of association divide our directors into three classes, each of which is elected once every three years; ● our amended and restated articles of association generally require a vote of the holders of a majority of our outstanding ordinary shares entitled to vote present and voting on the matter at a general meeting of shareholders (referred to as simple majority); however, the amendment of a limited number of provisions, such as (i) the provisions that relate to the rights of our Class A ordinary shares and Class B ordinary shares, (ii) the provision providing for the minimum and maximum number of directors that may serve on our board of directors and empowering our board of directors to determine the size of the board of directors, (iii) the provision setting forth the procedures and the requirements that must be met in order for a shareholder to require us to include a matter on the agenda for a general meeting of our shareholders, (iv) the provisions relating to the election and removal of members of our board of directors and empowering our board of directors to fill vacancies on the board of directors, and (v) the provision dividing our directors into three classes, requires a vote of the holders of 60% of the total voting power of our shareholders; ● our amended and restated articles of association do not permit a director to be removed except by a vote of the holders of at least 60% of the total voting power of our shareholders; ● our dual class ordinary share structure provides our existing shareholders holding Class B ordinary shares with the ability to significantly influence the outcome of matters requiring shareholder approval, even if they own significantly less than a majority of our outstanding ordinary shares; and ● our amended and restated articles of association provide that director vacancies may be filled by our board of directors.
Among other things: ● Israeli corporate law regulates mergers and requires that a tender offer be effected when more than a specified percentage of shares in a company are purchased; ● Israeli corporate law does not provide for shareholder action by written consent in public companies, thereby requiring all shareholder actions to be taken at a general meeting of shareholders; ● Israeli corporate law requires special approvals for transactions involving directors, officers, or significant shareholders and regulates other matters that may be relevant to these types of transactions; ● our amended and restated articles of association divide our directors into three classes, each of which is elected once every three years; ● our amended and restated articles of association generally require a vote of the holders of a majority of our outstanding ordinary shares entitled to vote present and voting on the matter at a general meeting of shareholders (referred to as simple majority); however, the amendment of a limited number of provisions, such as (i) the provisions that relate to the rights of our Class A ordinary shares and Class B ordinary shares, (ii) the provision providing for the minimum and maximum number of directors that may serve on our board of directors and empowering our board of directors to determine the size of the board of directors, (iii) the provision setting forth the procedures and the requirements that must be met in order for a shareholder to require us to include a matter on the agenda for a general meeting of our shareholders, (iv) the provisions relating to the election and removal of members of our board of directors and empowering our board of directors to fill vacancies on the board of directors, and (v) the provision dividing our directors into three classes, requires a vote of the holders of 60% of the total voting power of our shareholders; ● our amended and restated articles of association do not permit a director to be removed except by a vote of the holders of at least 60% of the total voting power of our shareholders; ● our dual class ordinary share structure provides our existing shareholders holding Class B ordinary shares with the ability to significantly influence the outcome of matters requiring shareholder approval, even if they own significantly less than a majority of our outstanding ordinary shares; and ● our amended and restated articles of association provide that director vacancies may be filled by our board of directors. 47 Table of Contents Further, Israeli tax considerations may make potential transactions undesirable to us or to some of our shareholders whose country of residence does not have a tax treaty with Israel granting tax relief to such shareholders from Israeli tax.
While we may attempt to renegotiate prices with suppliers or diversify our supply chain in response to tariffs, such efforts may not yield immediate results or may be ineffective. We might also consider increasing prices to the customer; however, this could reduce the competitiveness of our products and adversely affect our net revenue.
While we may attempt to renegotiate prices with suppliers or diversify our supply chain in response to tariffs, such efforts may not yield immediate results or may be ineffective. We might also consider increasing the price of our products to offset increased production costs; however, this could reduce the competitiveness of our products and adversely affect our net revenue.
As a result, we have limited financial data that can be used to evaluate our business and future prospects. Any evaluation of our business and prospects must be considered in light of our limited operating history, which may not be indicative of future performance.
We have a limited history of generating revenue at our current scale. As a result, we have limited financial data that can be used to evaluate our business and future prospects. Any evaluation of our business and prospects must be considered in light of our limited operating history, which may not be indicative of future performance.
The United States and the countries in which our products are produced or sold internationally have imposed and may impose additional quotas, duties, tariffs, or other restrictions or regulations, or may adversely adjust prevailing quota, duty, or tariff levels.
The majority of our products are currently manufactured outside of the United States. The United States and the countries in which our products are produced or sold internationally have imposed and may impose additional quotas, duties, tariffs, or other restrictions or regulations, or may adversely adjust prevailing quota, duty, or tariff levels.
We also are subject to the jurisdiction of various governments and regulatory agencies around the world, which may bring our personnel and agents into contact with public officials responsible for issuing or renewing permits, licenses, or approvals or for enforcing other governmental regulations.
Bribery Act, and the Israeli Anti-Corruption Laws. We also are subject to the jurisdiction of various governments and regulatory agencies around the world, which may bring our personnel and agents into contact with public officials responsible for issuing or renewing permits, licenses, or approvals or for enforcing other governmental regulations.
The Bribery Act also prohibits non-governmental “commercial” bribery and accepting bribes.
The U.K. Bribery Act also prohibits non-governmental “commercial” bribery and accepting bribes. The U.K.
Sales by us or our shareholders of a substantial number of Class A ordinary shares, including Class B ordinary shares, which will automatically convert into Class A ordinary shares upon transfer, in the public market, or the perception that these sales might occur, could cause the market price of our Class A ordinary shares to decline or could impair our ability to raise capital through a future sale of, or pay for acquisitions using, our equity securities.
Sales by us or our shareholders of a substantial number of Class A ordinary shares, including Class B ordinary shares, which will automatically convert into Class A ordinary shares upon transfer, in the public market, or the perception that these sales might occur, could cause the market price of our Class A ordinary shares to decline or could impair our ability to raise capital through a future sale of, or pay for acquisitions using, our equity securities. 50 Table of Contents We do not currently intend to pay dividends for the foreseeable future.
From time to time, we may receive formal and informal inquiries from various government regulatory authorities, as well as self-regulatory organizations, about our business and compliance with local laws, regulations, or standards.
We have in the past received, and from time to time we may in the future receive, formal and informal inquiries from various government regulatory authorities, as well as self-regulatory organizations, about our business and compliance with local laws, regulations, or standards.
Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC after we lose our status as an emerging growth company.
Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we are now required to include in our periodic reports filed with the SEC as we are no longer an emerging growth company.
In addition, our ability to receive inbound inventory efficiently and ship products to customers in a timely manner may be negatively affected by factors beyond our and these providers’ control, including inclement weather, fire, flood, power loss, earthquakes, acts of war or terrorism or other events specifically impacting other shipping partners, such as labor shortages or disputes, container shortages, financial difficulties, system failures, and other disruptions to the operations of the shipping companies on which we rely.
In addition, our ability to receive inbound inventory efficiently and ship products to customers in a timely manner may be negatively affected by factors beyond our and these providers’ control, including inclement weather, fire, flood, power loss, earthquakes, acts of war or terrorism or other events specifically impacting other shipping partners, such as labor shortages or disputes, container shortages, financial difficulties, system failures, and other disruptions to the operations of the shipping companies on which we rely. 11 Table of Contents The shipping industry is also currently experiencing issues with port congestion, port closures and ship diversions.
While the U.S. government’s recent tariffs on certain imports from China only affect a small portion of our production, any such future tariffs by the United States or other countries could have a significant impact on our business.
While the previous U.S. administration’s tariffs on certain imports from China only affected a small portion of our production, any such future tariffs imposed by the United States or other countries could have a significant impact on our business.
Further, under the Modernization of Cosmetic Regulation Act of 2022, manufacturers of cosmetics will become subject to more onerous FDA obligations once implemented via regulation, including adverse event reporting and record retention requirements, safety substantiation requirements, facility registration requirements, and good manufacturing practice requirements.
Further, under the Modernization of Cosmetic Regulation Act of 2022, manufacturers of cosmetics are subject to more onerous FDA obligations, including adverse event reporting and record retention requirements, safety substantiation requirements, facility registration requirements, and will in the future be subject to more onerous good manufacturing practice requirements.
As of the date of this Annual Report, more than 140 countries, including Israel and other countries in which we operate, have agreed to enact legislation on Pillar Two and to enforce a minimum global tax rate of 15%. Many countries are expected to implement such legislation in 2024, but it is currently unclear when Israel will do so.
As of the date of this Annual Report, more than 140 countries, including Israel and other countries in which we operate, have agreed to enact legislation on Pillar Two and to enforce a minimum global tax rate of 15%. Many countries implemented such legislation in 2024, and Israel is expected to do so in 2026.
It is not always possible to identify and deter misconduct by our employees and other third parties, and the precautions we take to detect and prevent these activities may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.
These laws may impact, among other things, future sales, marketing, and education programs. 28 Table of Contents It is not always possible to identify and deter misconduct by our employees and other third parties, and the precautions we take to detect and prevent these activities may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.
Accordingly, you may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq and our status as a controlled company could make our ordinary shares less attractive to some investors or otherwise harm our share price.
Directors, Senior Management and Employees—Board Practices—Corporate Governance Practices.” As a result of the above, you may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq and our status as a controlled company could make our ordinary shares less attractive to some investors or otherwise harm our share price.
See the section titled “Item 10.B. Additional Information—Articles of Association—Dividend and Liquidation Rights” for additional information. Payment of dividends may also be subject to Israeli withholding taxes. See the section titled “Item 10.E.
See the section titled “Item 10.B. Additional Information—Articles of Association—Dividend and Liquidation Rights” for additional information. Payment of dividends may also be subject to Israeli withholding taxes. See the section titled “Item 10.E. Taxation—Taxation of non-Israeli Resident Shareholders—Taxation on Receipt of Dividends” for additional information.
If we are unable to access and use data collected from our customers as part of our PowerMatch process, or other third-party data used in our AI models, or if our access to such data is limited, for example, due to new or changing laws, rules, or regulations, or policies of third parties, our ability to accurately evaluate potential transactions, detect fraud, and verify customers’ data would be compromised. 19 Table of Contents In addition, if third-party data used to train and improve our AI models is inaccurate, or access to such third-party data is limited or becomes unavailable to us, our ability to continue to improve our AI models would be adversely affected.
If we are unable to access and use data collected from our customers as part of our PowerMatch process, or other third-party data used in our AI models, or if our access to such data is limited, for example, due to new or changing laws, rules, or regulations, or policies of third parties, our ability to accurately evaluate potential transactions, detect fraud, and verify customers’ data would be compromised.
A violation of these applicable laws could adversely affect our business, prospects, financial condition, and results of operations. Our ability to source and distribute our products profitably or at all could be harmed if new trade restrictions are imposed or existing trade restrictions become more burdensome. The majority of our products are currently manufactured outside of the United States.
A violation of these applicable laws could adversely affect our business, prospects, financial condition, and results of operations. 29 Table of Contents Our ability to source and distribute our products profitably or at all could be harmed if new trade restrictions are imposed or existing trade restrictions become more burdensome.
Our operations could be disrupted by such call-ups and by the absence of a significant number of our employees related to military service or the absence for extended periods of military service of one or more of our key employees or members of our management.
Our operations could be disrupted by such call-ups and by the absence of a significant number of our employees related to military service or the absence for extended periods of military service of one or more of our key employees or members of our management. Such disruption could materially adversely affect our business, financial condition, and results of operations.
Our ability to compete also depends on the continued strength of our brands and products, our ability to attract and retain key talent and other personnel, the influence of social media content creators, the efficiency of our third-party manufacturing facilities and distribution network, our relationships with our customers, our ability to continue to innovate in online technology to match customers with the adequate products from our offerings, and our ability to obtain, maintain, protect, defend, and enforce our intellectual property and other proprietary rights used in our business.
It is difficult for us to predict the timing and scale of our competitors’ actions in these areas. 10 Table of Contents Our ability to compete also depends on the continued strength of our brands and products, our ability to attract and retain key talent and other personnel, the influence of social media content creators, the efficiency of our third-party manufacturing facilities and distribution network, our relationships with our customers, our ability to continue to innovate in online technology to match customers with the adequate products from our offerings, and our ability to obtain, maintain, protect, defend, and enforce our intellectual property and other proprietary rights used in our business.
From time to time, we may be involved in litigation and other proceedings, including matters related to commercial disputes, product liability, intellectual property, data privacy and security, trade, customs laws and regulations, employment, regulatory compliance, and other claims related to our business. See the section titled “Item 4.B. Business Overview —Legal Proceedings” for additional information.
We are currently involved in, and may in the future from time to time become involved in, litigation and other proceedings, including matters related to commercial disputes, product liability, intellectual property, data privacy and security, trade, customs laws and regulations, employment, regulatory compliance, and other claims related to our business. See the section titled “Item 4.B.
If we or our brand ambassadors fail to comply with the Endorsement Guides or make improper product claims, the FTC could bring an enforcement action against us and we could be fined and/or forced to alter our marketing materials. Moreover, consumer protection laws and regulations governing our business continue to expand.
If we or our brand ambassadors fail to comply with the Endorsement Guides or make improper product claims, the FTC could bring an enforcement action against us and we could be fined and/or forced to alter our marketing materials.
In some states such as California, class-action lawsuits may be based on similar standards regarding false and misleading advertising and other increasingly novel theories of liability. In addition, plaintiffs’ lawyers have filed class action or false advertising lawsuits against cosmetic companies based on their marketing claims.
Moreover, consumer protection laws and regulations governing our business continue to expand. In some states such as California, class-action lawsuits may be based on similar standards regarding false and misleading advertising and other increasingly novel theories of liability. In addition, plaintiffs’ lawyers have filed class action or false advertising lawsuits against cosmetic companies based on their marketing claims.
In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq. We are subject to the requirements of Section 404 of the Sarbanes-Oxley Act, subject to accommodations available to newly public companies and emerging growth companies.
In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq. We are subject to the requirements of Section 404 of the Sarbanes-Oxley Act.
The dual class structure of our ordinary shares has the effect of concentrating voting power with our co-founder and Chief Executive Officer, which will limit your ability to influence the outcome of important transactions, including a change in control. Our Class B ordinary shares have ten votes per share, and our Class A ordinary shares have one vote per share.
Legal Proceedings.” The dual class structure of our ordinary shares has the effect of concentrating voting power with our co-founder and Chief Executive Officer, which will limit your ability to influence the outcome of important transactions, including a change in control.
If we do not help our customers quickly resolve issues and provide effective ongoing support, or we are unable to achieve or maintain a high level of customer satisfaction, we could experience more complaints from customers, lower than expected repeat purchases, disputes and additional costs, or negative publicity, any of which could have an adverse effect on our business, financial condition, and results of operations.
If we do not help our customers quickly resolve issues and provide effective ongoing support, or we are unable to achieve or maintain a high level of customer satisfaction, we could experience more complaints from customers, lower than expected repeat purchases, disputes and additional costs, or negative publicity, any of which could have an adverse effect on our business, financial condition, and results of operations. 20 Table of Contents We may need additional capital, and we cannot be sure that additional financing will be available on favorable terms, if at all.
Competition in the beauty and wellness industry is based on a variety of factors, including innovation, technology, effectiveness of beneficial attributes, accessible pricing, service to the consumer, promotional activities, marketing, special events, new brand and product introductions, e-commerce initiatives, and other activities. It is difficult for us to predict the timing and scale of our competitors’ actions in these areas.
Competition in the beauty and wellness industry is based on a variety of factors, including innovation, technology, effectiveness of beneficial attributes, accessible pricing, service to the consumer, promotional activities, marketing, special events, new brand and product introductions, e-commerce initiatives, and other activities.
For example, if our AI models fail to accurately analyze facial and hair features, or any of the other components of our advanced computer vision fail, we may experience higher than forecasted returns, and our ability to attract new customers, retain existing customers, or increase sales of our products to existing customers and our business, financial condition, and results of operations may be adversely affected.
For example, if our AI models fail to accurately analyze facial and hair features, or any of the other components of our advanced computer vision fail, we may experience higher than forecasted returns, and our ability to attract new customers, retain existing customers, or increase sales of our products to existing customers and our business, financial condition, and results of operations may be adversely affected. 19 Table of Contents Our AI models are designed to utilize statistical, physics-based, and/or vision-based models to match users to specific products with high accuracy.
U.S. State consumer protection laws modeled after the FTC Act impose similar requirements on our business. As such, we are required to have adequate substantiation of all material advertising claims made for our products.
U.S. State consumer protection laws modeled after the FTC Act impose similar requirements on our business. As such, we are required to have adequate substantiation of all material advertising claims made for our products. Failure to adequately substantiate claims may be considered either deceptive or unfair practices.
As a result, the market price of our Class A ordinary shares could be negatively affected, and we could become subject to investigations by the SEC or other regulatory authorities, which could require additional financial and management resources.
As a result, the market price of our Class A ordinary shares could be negatively affected, and we could become subject to investigations by the SEC or other regulatory authorities, which could require additional financial and management resources. Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.
Any of the following could have a material effect on our overall effective tax rate: ● Some programs may be discontinued; ● We may be unable to meet the requirements for continuing to qualify for some programs; 44 Table of Contents ● These programs and tax benefits may be unavailable at their current levels; or ● We may be required to refund previously recognized tax benefits if we are found to be in violation of the stipulated conditions.
If we fail to meet the conditions upon which certain favorable tax treatment is based, we would not be able to claim future tax benefits and could be required to refund tax benefits already received. 45 Table of Contents Any of the following could have a material effect on our overall effective tax rate: ● Some programs may be discontinued; ● We may be unable to meet the requirements for continuing to qualify for some programs; ● These programs and tax benefits may be unavailable at their current levels; or ● We may be required to refund previously recognized tax benefits if we are found to be in violation of the stipulated conditions.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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ODDITY LABS is deploying these capabilities to build a next-generation platform, which we believe will have distinct advantages: ● the ability to discover and develop high-performance products that meet consumer needs at speed and scale; ● the biological pathway mapping data base to understand the mechanisms that drive cellular behavior, supporting future innovation of novel products and solutions; ● the ability to attract world leading talent; and ● the ability to support systematic and repeatable innovation through AI-based molecular discovery.
ODDITY LABS is deploying these capabilities to build a next-generation platform, which we believe will have distinct advantages: ● the ability to discover and develop high-performance products that meet consumer needs at speed and scale; ● the biological pathway mapping data base to understand the mechanisms that drive cellular behavior, supporting future innovation of novel products and solutions; ● the ability to attract world leading talent; and ● the ability to support systematic and repeatable innovation through AI-based molecule discovery.
We may consider pursuing trademark registrations for additional marks and in additional jurisdictions if and to the extent we believe such registrations would be beneficial to our business and cost-effective. As of December 31, 2023, we have also registered various domain names that we use in the conduct of our business, including ilmakiage.co.il, ilmakiage.com and spoiledchild.com.
We may consider pursuing trademark registrations for additional marks and in additional jurisdictions if and to the extent we believe such registrations would be beneficial to our business and cost-effective. As of December 31, 2024, we have also registered various domain names that we use in the conduct of our business, including ilmakiage.co.il, ilmakiage.com and spoiledchild.com.
We believe that our ability to compete successfully depends primarily on the following factors: ● continuing to advance our technology platform; ● leveraging our data and AI capabilities; ● maintaining and attracting customers; ● developing and launching new products and transformative brands; ● responding to changing consumer demands in a timely manner; ● maintaining the value and reputation of our brand; ● attracting and retaining a team committed to innovation; ● effectiveness of our products; ● accessible pricing; ● customer service; and ● effectiveness of our marketing strategies.
We believe that our ability to compete successfully depends primarily on the following factors: ● continuing to advance our technology platform; ● leveraging our data and AI capabilities; ● maintaining and attracting customers; ● developing and launching new products and transformative brands; ● responding to changing consumer demands in a timely manner; ● maintaining the value and reputation of our brand; ● attracting and retaining a team committed to innovation; ● effectiveness of our products; 64 Table of Contents ● accessible pricing; ● customer service; and ● effectiveness of our marketing strategies.
For example, the use of dihydroxyacetone, as a color additive in self-tanning products must comply with FDA regulations that impose strict limitations on impurities. 74 Table of Contents Additionally, in January 2022, the FDA published a white paper containing expert opinion on testing methods for the presence of asbestos in talc and talc-containing cosmetics.
For example, the use of dihydroxyacetone, as a color additive in self-tanning products must comply with FDA regulations that impose strict limitations on impurities. Additionally, in January 2022, the FDA published a white paper containing expert opinion on testing methods for the presence of asbestos in talc and talc-containing cosmetics.
GDPR impose robust obligations on controllers and processors for the collection, control, use, sharing, disclosure, and other processing of data relating to an identified or identifiable living individual (personal data) and contain documentation and accountability requirements for data protection compliance. See the section titled “Item 3.D.
GDPR impose robust obligations on controllers and processors for the collection, control, use, sharing, disclosure, and other processing of data relating to an identified or identifiable living individual (personal data) and contain documentation and accountability requirements for data protection compliance. 68 Table of Contents See the section titled “Item 3.D.
Any practices inconsistent with the Green Guides and Endorsement Guides can result in violations of the FTC Act’s proscription against unfair and deceptive practices. 75 Table of Contents United States Regulation of Dietary Supplements Dietary Supplements The FDA has comprehensive authority to regulate dietary supplements, including their composition, labeling and manufacturing.
Any practices inconsistent with the Green Guides and Endorsement Guides can result in violations of the FTC Act’s proscription against unfair and deceptive practices. United States Regulation of Dietary Supplements Dietary Supplements The FDA has comprehensive authority to regulate dietary supplements, including their composition, labeling and manufacturing.
We rely on expert consultants for our EU product registrations and review of our labeling for compliance with the EU Cosmetics Regulation. The EU Cosmetics Regulation requires the manufacture of cosmetic products to comply with GMPs, which is presumed where the manufacture is in accordance with the relevant harmonized standards.
We rely on expert consultants for our EU product registrations and review of our labeling for compliance with the EU Cosmetics Regulation. 67 Table of Contents The EU Cosmetics Regulation requires the manufacture of cosmetic products to comply with GMPs, which is presumed where the manufacture is in accordance with the relevant harmonized standards.
We are focused on continuing to acquire new users efficiently, and building brand awareness and a demand generation engine. 72 Table of Contents We have invested heavily in building a talented in-house marketing team, while also developing proprietary technologies that enable us to build data-driven and highly personalized campaigns that can scale globally on digital platforms.
We are focused on continuing to acquire new users efficiently, and building brand awareness and a demand generation engine. We have invested heavily in building a talented in-house marketing team, while also developing proprietary technologies that enable us to build data-driven and highly personalized campaigns that can scale globally on digital platforms.
Second, the consumer shift to science-backed products that truly solve their pain points, where our investment in ODDITY LABS positions us to lead in developing the highest performing ingredients and formulations on the market.
Second, the consumer shift to science-backed products that truly solve their pain points, where our investment in ODDITY LABS positions us to lead in developing high performing ingredients and formulations in the market.
Technology First Our business model is centered on our in-house technology capabilities, with leading expertise in data science, machine learning, and computer vision. We operate a cutting-edge R&D and technology center in Tel Aviv that is fully integrated with our business operations in New York City.
Our business model is centered on our in-house technology capabilities, with leading expertise in data science, machine learning, and computer vision. We operate a cutting-edge R&D and technology center in Tel Aviv that is fully integrated with our business operations in New York City, and a biotech lab in Boston.
We believe that our existing facilities are sufficient for our current needs. We believe that suitable additional or substitute space will be available as needed to accommodate changes in our operations. ITEM 4A UNRESOLVED STAFF COMMENTS Not applicable.
We believe that our existing facilities are sufficient for our current needs. We believe that suitable additional or substitute space will be available as needed to accommodate changes in our operations. ITEM 4A UNRESOLVED STAFF COMMENTS Not applicable. 69 Table of Contents
We work hard to create an environment where our employees feel empowered, and live by our core mantras: ● We’re boldly unconstrained. ● We always outrun. ● We take big swings. 73 Table of Contents ● We win every day. ● We never fit in.
We work hard to create an environment where our employees feel empowered, and live by our core mantras: ● We’re boldly unconstrained. ● We always outrun. ● We take big swings. ● We win every day. ● We never fit in.
When Beauty Meets Israeli Technology We operate an elite technology organization, and technology is at the center of everything we do. An ethos of innovation, creation, agility, and disruption permeates our entire company. Our dedicated workforce includes in-house engineers, data scientists, computer vision experts, and product teams that comprise over 40% of our global headcount.
Technology Talent We operate an elite technology organization and technology is at the center of everything we do. An ethos of innovation, creation, agility, and disruption permeates our entire company. Our dedicated workforce includes in-house engineers, data scientists, computer vision experts, and product teams that comprise over 40% of our online platform headcount.
What constitutes a reasonable basis can vary depending on the strength or type of claim made, or the market in which the claim is made, but objective evidence substantiating the claim is generally required. The FTC also has specialized requirements for certain types of claims.
The FTC requires that companies have a reasonable basis to support marketing claims. What constitutes a reasonable basis can vary depending on the strength or type of claim made, or the market in which the claim is made, but objective evidence substantiating the claim is generally required. The FTC also has specialized requirements for certain types of claims.
Over the years, the EU cosmetics legal regime has been adopted by many countries around the world. 76 Table of Contents Under the EU Cosmetics Regulation, a “cosmetic product” is defined as “any substance or mixture intended to be placed in contact with the external parts of the human body (epidermis, hair system, nails, lips and external genital organs) or with the teeth and the mucous membranes of the oral cavity with a view exclusively or mainly to cleaning them, perfuming them, changing their appearance, protecting them, keeping them in good condition or correcting body odors.” Consequently, a product is considered to be a cosmetic if it is presented as protecting the skin, maintaining the skin in good condition or improving the appearance of the skin, provided that it is not a medicinal product due to its composition or intended use.
Under the EU Cosmetics Regulation, a “cosmetic product” is defined as “any substance or mixture intended to be placed in contact with the external parts of the human body (epidermis, hair system, nails, lips and external genital organs) or with the teeth and the mucous membranes of the oral cavity with a view exclusively or mainly to cleaning them, perfuming them, changing their appearance, protecting them, keeping them in good condition or correcting body odors.” Consequently, a product is considered to be a cosmetic if it is presented as protecting the skin, maintaining the skin in good condition or improving the appearance of the skin, provided that it is not a medicinal product due to its composition or intended use.
Property, Plants and Equipment Our Facilities We lease approximately 17,258 square feet in New York, New York, where we operate our U.S. headquarters, approximately 2,073 square feet in Boston, Massachusetts, where we operate ODDITY LABS, and approximately 9,365 square feet in Tel Aviv, Israel, where we operate our corporate headquarters.
Property, Plants and Equipment ​ Our Facilities ​ We lease approximately 19,898 square feet in New York, New York, where we operate our U.S. headquarters, approximately 3,825 square feet in Boston, Massachusetts, where we operate ODDITY LABS, and approximately 9,365 square feet in Tel Aviv, Israel, where we operate our corporate headquarters.
Since we launched our first digital brand, IL MAKIAGE, in 2018, we have disrupted the way millions of consumers shop for beauty products by bringing them online and transforming their shopping experience, deploying algorithms and machine learning models to deliver a precise product match and seamless shopping experience.
Since launching in the United States in 2018, we have disrupted the way millions of consumers shop for beauty products by bringing them online and transforming their shopping experience, deploying algorithms and machine learning models to deliver a precise product match and seamless shopping experience.
IL MAKIAGE defines and builds the future of beauty by using ODDITY’s unparalleled technology to connect people with a superior, painstakingly tested, wide range of beauty products.
IL MAKIAGE defines and builds the future of beauty by using ODDITY’s unparalleled technology to connect people with a superior, painstakingly tested, wide range of beauty products including face and complexion, skin, eyes and brows, and lips.
The FDA has broad authority to enforce the provisions of federal law applicable to dietary supplements, including powers to issue public Warning Letters or Untitled Letters to a company, publicize information about illegal products, detain products intended for import, request a recall of illegal or unsafe products from the market, and request that the Department of Justice initiate a seizure action, an injunction action or a criminal prosecution in the U.S. courts.
The FDA has broad authority to enforce the provisions of federal law applicable to dietary supplements, including powers to issue public Warning Letters or Untitled Letters to a company, publicize information about illegal products, detain products intended for import, request a recall of illegal or unsafe products from the market, and request that the Department of Justice initiate a seizure action, an injunction action or a criminal prosecution in the U.S. courts. 66 Table of Contents Foreign Government Regulation European Union Regulation of Cosmetic Products We currently market products that are regulated as cosmetic products in the EU.
Operating and Financial Review and Prospects—Operating Results—Key Factors Affecting Our Performance—Seasonality”. Sales and Marketing Our sales and marketing capabilities represent a core and differentiated competency that is essential to the success of the ODDITY platform.
Seasonality For a discussion of the seasonality of our business, see the section titled “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Key Factors Affecting Our Performance—Seasonality”. Sales and Marketing Our sales and marketing capabilities represent a core and differentiated competency that is essential to the success of the ODDITY platform.
Beauty and wellness remains largely offline with insufficient technology deployed to engage a digitally native consumer. IL MAKIAGE IL MAKIAGE is a prestige, digital beauty brand powered by ODDITY’s consumer tech platform, which leverages data science, machine learning and computer vision capabilities to deliver high-quality online experiences for consumers.
IL MAKIAGE IL MAKIAGE is a prestige, digital beauty brand powered by ODDITY’s consumer tech platform, which leverages data science, machine learning and computer vision capabilities to deliver high-quality online experiences for consumers.
Each member state appoints a competent authority to enforce the EU Cosmetics Regulation in its territory and to cooperate with the other member state authorities and the European Commission.
Each member state appoints a competent authority to enforce the EU Cosmetics Regulation in its territory and to cooperate with the other member state authorities and the European Commission. The European Commission is responsible for driving consistency in the way the Cosmetics Regulation is enforced across the EU.
While we have not in the past been affected by significant volatility in the prices of principal raw materials required to make our products, it is possible that price volatility could increase in the future. We believe that we are well-positioned to withstand any reasonably foreseeable supply chain disruptions or pricing fluctuations.
While we have not in the past been affected by significant volatility in the prices of principal raw materials required to make our products, it is possible that price volatility could increase in the future.
In addition, the transaction included additional consideration related to compensation for post-combination services. ODDITY LABS operates a frontier biotechnology research and development lab in Boston, at the center of biotechnology talent and innovation. It will power our product innovation for the future, with a focus on the discovery and development of novel products.
ODDITY LABS operates a biotechnology research and development lab in Boston, at the center of biotechnology talent and innovation. We expect that it will power our product innovation for the future, with a focus on the discovery and development of novel products.
Using artificial intelligence, PowerMatch and SpoiledBrain help users identify the correct products, formulations, and shades, reducing the risk of incorrect selection and eliminating the need to physically try on products in-store.
Our proprietary algorithms and machine learning models match customers with accurate complexion and beauty products. Using artificial intelligence and computer vision, PowerMatch and SpoiledBrain help users identify the correct products, formulations, and shades, reducing the risk of incorrect selection and eliminating the need to physically try on products in-store.
Our Market Opportunity We operate in the highly attractive over $600 billion global beauty and wellness market as defined by the global beauty, personal care and dietary supplements market per Euromonitor, which is characterized by its large size, secular tailwinds, high growth, and compelling gross margin profile.
These include growing our user base, converting users into customers, increasing customer loyalty and share of wallet, expanding our global footprint, growing our existing brands, and expanding our portfolio of brands and services. 59 Table of Contents Our Market Opportunity We operate in the highly attractive over $600 billion global beauty and wellness market as defined by the global beauty, personal care and dietary supplements market per Euromonitor, which is characterized by its large size, secular tailwinds, high growth, and compelling gross margin profile.
In the event the FDA identifies unsanitary conditions, false or misleading labeling, or any other violation of FDA regulation, the FDA may request, or a manufacturer may independently decide to conduct a recall or market withdrawal of a product or to make changes to its manufacturing processes or product formulations or labels.
In the event the FDA identifies unsanitary conditions, false or misleading labeling, or any other violation of FDA regulation, the FDA may request, or a manufacturer may independently decide to conduct a recall or market withdrawal of a product or to make changes to its manufacturing processes or product formulations or labels. 65 Table of Contents The FTC also regulates and can bring enforcement action against cosmetic companies for deceptive advertising and lack of adequate scientific substantiation for claims.
Further, under the Modernization of Cosmetic Regulation Act of 2022, which amended the FDCA, manufacturers of cosmetics will become subject to more onerous FDA obligations once implemented via regulation, including adverse event reporting and record retention requirements, safety substantiation requirements, facility registration requirements, and good manufacturing practice requirements.
The FDA also recommends that manufacturers maintain product complaint and recall files and voluntarily report adverse events to the agency. Further, under the Modernization of Cosmetic Regulation Act of 2022, which amended the FDCA, manufacturers of cosmetics are subject to more onerous FDA obligations, including adverse event reporting and record retention requirements, safety substantiation requirements, and facility registration requirements.
Since the brand’s launch in 2018, according to our customer surveys, IL MAKIAGE has converted millions of consumers from shopping for beauty products in stores to making purchases online and disrupted the industry in the process. In 2020, IL MAKIAGE started its global expansion with launches in the U.K., Germany, and Australia.
Since the brand’s launch in 2018, according to our customer surveys, IL MAKIAGE has converted millions of consumers from shopping for beauty products in stores to making purchases online and disrupted the industry in the process. SpoiledChild We launched our multi-category second brand, SpoiledChild, in February 2022 with the goal of disrupting the wellness industry.
In 2020 we expanded our online platform to the U.K., followed by additional markets in continental Europe and Australia. Sales outside of the U.S. represent 19% of our net revenues for the year ended December 31, 2023. We expanded our technology capabilities into computer vision in 2021 with the acquisition of Voyage81 Ltd.
In 2020 we expanded our online platform to the U.K., followed by additional markets in continental Europe and Australia. Sales outside of the United States represented 15% of our net revenue for the year ended December 31, 2024. In 2021, we acquired Voyage81, a leader in computer vision, AI-driven imaging, and hyperspectral technology.
Our platform delivers the future of beauty and wellness to consumers by addressing the complex demands they face when buying online. Our core technology products should and will serve multiple brands: PowerMatch / SpoiledBrain Our proprietary algorithms and machine learning models match customers with accurate complexion and beauty products.
Technology Products Our platform delivers the future of beauty and wellness to consumers by addressing the complex demands they face when buying online. Our core technology products should and will serve multiple brands: ● Artificial Intelligence. We deploy AI and machine learning models across a wide range of front- and back-end operations.
The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The SEC’s website is www.sec.gov. B. Business Overview Who We Are We are a consumer tech platform that is built to transform the global beauty and wellness market.
The SEC’s website is www.sec.gov. 58 Table of Contents B. Business Overview Who We Are We are a consumer tech platform that is built to transform the global beauty and wellness market.
We bring visitors to our website, turn visitors into users by asking questions and learning about them, and then leverage the data we have across the platform to convert them into paying customers.
Our data moat drives all aspects of our business, including revenue, product recommendations, marketing and retargeting, distribution, operations, and development of new products and brands. We bring visitors to our website, turn visitors into users by asking questions and learning about them, then leverage the data we have across the platform to convert them into paying customers and repeat customers.
Distribution and Fulfillment We primarily utilize third parties to warehouse and distribute our products throughout the world. We have recently significantly expanded the order fulfillment capacity of our fulfillment and distribution center network, and we believe that we have sufficient capacity to support current and reasonably anticipated future requirements.
We believe that we are well-positioned to withstand any reasonably foreseeable supply chain disruptions or pricing fluctuations. 63 Table of Contents Distribution and Fulfillment We primarily utilize third parties to warehouse and distribute our products throughout the world. We believe that we have sufficient capacity to support current and reasonably anticipated future requirements.
SpoiledChild We launched our multi-category second brand, SpoiledChild, in February 2022 with the goal of disrupting the wellness industry. SpoiledChild is a prestige, online-only wellness brand powered by ODDITY’s scalable technology platform, including its AI and machine learning capabilities, along with superior products and sustainable design.
SpoiledChild is a prestige online-only wellness brand powered by ODDITY’s scalable technology platform, including its AI and machine learning capabilities. SpoiledChild offers a range of superior products and sustainable design including skincare products, haircare products, and supplements.
The EU Cosmetics Regulation is directly applicable in, and binding on all EU member states and is enforced at the national member state level.
In the EU, the sale of cosmetic products is regulated under the EU Cosmetics Regulation, setting out the general regulatory framework for finished cosmetic products and their ingredients. The EU Cosmetics Regulation is directly applicable in, and binding on all EU member states and is enforced at the national member state level.
Intellectual Property To establish, maintain, protect, defend, and enforce our intellectual property rights, we rely on a combination of trademark, patent, copyright and trade secret laws in the United States and certain other jurisdictions, as well as contractual arrangements. 78 Table of Contents Our primary trademark, IL MAKIAGE, and our logo have been registered in the United States as well as in a number of foreign jurisdictions, including Israel.
Key Information—Risk Factors—Risks Related to Data Privacy and Security, Information Technology, and Intellectual Property” for more information. Intellectual Property To establish, maintain, protect, defend, and enforce our intellectual property rights, we rely on a combination of trademark, patent, copyright and trade secret laws in the United States and certain other jurisdictions, as well as contractual arrangements.
Regulation of Cosmetic Products Following Brexit The U.K. formally left the EU on January 31, 2020, commonly referred to as “Brexit”.
The aforementioned EU rules are generally applicable in the EEA, which consists of the 27 EU member states plus Norway, Liechtenstein and Iceland. U.K. Regulation of Cosmetic Products Following Brexit The U.K. formally left the EU on January 31, 2020, commonly referred to as “Brexit”.
The FDA monitors compliance of cosmetic products through market surveillance and inspection of cosmetic manufacturers and distributors to ensure that the products are not manufactured under unsanitary conditions, or labeled in a false or misleading manner. Inspections also may arise from consumer or competitor complaints filed with the FDA.
The FDA has also been granted new enforcement authorities over cosmetics, such as mandatory recall authority, and new cosmetic labeling requirements have been imposed. The FDA monitors compliance of cosmetic products through market surveillance and inspection of cosmetic manufacturers and distributors to ensure that the products are not manufactured under unsanitary conditions, or labeled in a false or misleading manner.
Our operating method allows us to keep a strong pace of innovation and execution as we scale. The tech team is organized in squads devoted to key domains, each organized as a small standalone startup with dedicated project managers, software developers, and quality assurance teams. This allows all teams to push domains in parallel and avoid bottlenecks.
Tech squads are devoted to key domains, each organized as a small standalone startup with dedicated project managers, software developers, and quality assurance teams. This allows all teams to push domains in parallel and avoid bottlenecks. We work in weekly sprints that include planning, coding, deploying, testing, analyzing performance, and optimizing.
We believe this market is ripe for disruption, dominated by established, largely offline, wholesale models that we feel have not sufficiently evolved to meet changing consumer preferences for a digital, personalized, and customized experience. Beauty and Wellness Represents a Massive Market Ripe for Digital Disruption Today’s beauty and wellness market is dominated by multi-brand brick-and-mortar retailers.
We believe this market is ripe for disruption, dominated by established, largely offline, wholesale models that we feel have not sufficiently evolved to meet changing consumer preferences for a digital, personalized, and customized experience. We see two powerful pillars of transformation in the industry, and have positioned ODDITY to lead on both fronts: ● Increased online adoption.
We are uncompromising in our mission to make the first move, set the pace for the industry, take big swings, and continuously raise the bar - wild vision combined with hard work and a hands-on approach. Our Growth Strategies Our intention is to sustain our high-growth and attractive margin profile that consistently delivers great outcomes for our stakeholders.
As our name suggests, our corporate DNA values the ability to be unconstrained by historical conventions. We are uncompromising in our mission to make the first move, set the pace for the industry, take big swings, and continuously raise the bar - a wild vision combined with hard work and a hands-on approach. ● Technology First.
(formerly known as Il Makiage Cosmetics (2013) Ltd.) was incorporated on June 23, 2013 in Israel under the Companies Law. Our principal executive offices are located at 8 Haharash Street, Tel Aviv-Jaffa 6761304, Israel where we operate our R&D center; we also have business headquarters in New York City and a biotechnology lab in Boston.
Our principal executive offices are located at 8 HaHarash Street, Tel Aviv-Jaffa 6761304, Israel where we operate our R&D center; we also have business headquarters in New York City and a biotechnology lab in Boston. Our agent for service of process in the United States is ODDITY Tech US Inc., located at 110 Greene Street, New York, New York 10012.
In addition, for the years ended December 31, 2023, 2022 and 2021, we achieved a gross margin of 70.4%, 67.2% and 68.8%, net income margin of 11.5%, 6.7% and 6.3%, and Adjusted EBITDA margin of 21.1%, 12.2% and 12.0%, respectively.
In addition, for the years ended December 31, 2024, 2023 and 2022, we achieved a net income margin of 15.7%, 11.5%, and 6.7%, and Adjusted EBITDA margin of 23.3%, 21.1%, and 12.2%, respectively. For a breakdown of our net revenue by geography, see Note 15 to our consolidated financial statements included elsewhere in this Annual Report.
We also own several trademarks for which applications for registration are pending including, among others, SpoiledChild. As of December 31, 2023, we owned approximately 132 trademark registrations and 15 applications for trademark registration worldwide.
Our primary trademark, IL MAKIAGE, and our logo have been registered in the United States as well as in a number of foreign jurisdictions, including Israel. We also own several trademarks for which applications for registration are pending including, among others, SpoiledChild. As of December 31, 2024, we owned approximately 236 trademark registrations and 52 applications for trademark registration worldwide.
In addition, our order billings grew to $595.8 million for the year ended December 31, 2023 compared to $395.5 million and $267.8 million for the years ended December 31, 2022 and 2021, respectively. See the section titled “Item 5.A. Operating and Financial Review and Prospects—Operating Results” for more information.
Our asset light model supports significant cash generation. During the year ended December 31, 2024, we generated $137.8 million of net operating cash flow compared to $87.5 million and $39.0 million for the years ended December 31, 2023, and 2022. See the section titled “Item 5.A. Operating and Financial Review and Prospects—Operating Results” for more information.
ODDITY LABS was formed in April 2023, in conjunction with our acquisition of Revela, a biotechnology company focused on the development of new molecules for beauty and wellness products.
ODDITY LABS was formed in April 2023 in conjunction with our acquisition of Revela, a biotechnology company focused on the development of new molecules for beauty and wellness products. 62 Table of Contents None of our products to date have required FDA approval and as a result the FDA has not approved any of our products or otherwise made any determinations on whether our products are safe and effective for their intended uses.
Our in-house R&D center works directly with our third-party manufacturing partners to develop or identify the precise product formulas that best achieve our stringent data-centric performance and quality criteria. 69 Table of Contents IL MAKIAGE Face and Complexion Our complexion products offer a wide variety of shades designed to match every skin tone.
We have made significant R&D investments in support of developing exceptional quality beauty and wellness products that drive adoption, customer loyalty, and repeat purchasing behavior. Our in-house R&D center works directly with our third-party manufacturing partners to develop or identify the precise product formulas that best achieve our stringent data-centric performance and quality criteria.
Our agent for service of process in the United States is ODDITY Tech US Inc., located at 110 Greene Street, New York, New York 10012. Our website address is https://oddity.com. Information contained on, or that can be accessed through, our website does not constitute a part of this Annual Report and is not incorporated by reference herein.
Our website address is https://oddity.com. Information contained on, or that can be accessed through, our website does not constitute a part of this Annual Report and is not incorporated by reference herein. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
Superior Product Performance Our data-centric strategy enables us to create and deliver superior products to our customers and build differentiated brands across the beauty and wellness space. From inception, we construct each brand by thoughtfully leveraging data and employing an exhaustive testing process with our global user base, to determine product-market fit and develop ingredients and formulations.
From inception, we construct each brand by thoughtfully leveraging data and employing an exhaustive testing process with our global user base to determine product-market fit and develop ingredients and formulations. We are committed to only launching a product when our user data shows there is a real consumer need and that our product quality gives us the ability to win.
We expect our technology roadmap will define the future of beauty. 59 Table of Contents Data Drives Our Business We deploy our technology to better understand customers and anticipate their wants and needs. Our data moat drives all aspects of our business, including revenue, marketing, distribution, operations, and development of new products and brands.
Our investments in and focus on recruiting top technology talent is a key component of our strategy, and we expect our technology roadmap will define the future of beauty. ● Data Drives Our Business. We deploy our technology to better understand customers and anticipate their wants and needs.
We acquired our hyperspectral vision technology in July 2021 through the purchase of all outstanding shares of Voyage81 for approximately $20.2 million in cash and approximately $12.3 million in Redeemable A shares. For more information see Note 13 to our consolidated financial statements included elsewhere in this Annual Report.
These tools allow us to identify skin conditions like acne and hyperpigmentation, track those conditions over time, and anticipate how those conditions will progress. We acquired hyperspectral vision technology in 2021 through the purchase of Voyage81. For more information see Note 13 to our consolidated financial statements included elsewhere in this Annual Report. ● PowerMatch / SpoiledBrain.
Our tech team is integrated with the business teams, working hand-in-hand across areas like growth, customer experience, marketing, and product development to drive the business. To execute our extensive roadmap, we deploy new versions of our platform and funnels every week. The multiple deployments improve and add features that the customer wants and needs.
Our tech team is integrated with the business teams, working hand-in-hand across areas like growth, customer experience, marketing, and product development to drive the business. Our operating method allows us to keep a strong pace of innovation and execution as we scale.
This distinctive approach is core to our competitive advantage and ability to disrupt the market. Outsiders by Design Disrupting a market requires outside thinking. Our organization is built entirely by beauty industry outsiders, who come with fresh thinking, a focus on innovation, and a desire to drive continuous improvement.
Our organization is built entirely by beauty industry outsiders, who come with fresh thinking, a focus on innovation, and a desire to drive continuous improvement. Our founder-led management team saw an industry ripe for disruption after observing the disconnect between online beauty discovery and offline purchasing behavior.
This technology-powered, data-centric model shares similarities with other “land and expand” models in the technology industry, which are designed to support faster growth at higher incremental returns than analog ones. Once a user is onboarded, we are able to market additional products and services at lower incremental costs, supporting favorable incremental returns on our capital.
Once a user is onboarded, we are able to market additional products and services at lower incremental costs, supporting favorable returns on capital. ● Superior Product Performance. Our data-centric strategy enables us to create and deliver superior products for our customers.
Our beauty portfolio includes exceptional face and complexion, eye and brow and lip products, makeup tools, and recently launched wellness categories with high-performance skin and hair care products. Our products are designed specifically for our direct-to-consumer and online customer base.
Our product portfolio spans categories including face and complexion, eye, brow and lip products, makeup tools, skincare, haircare, and supplements. These products are designed specifically for our direct-to-consumer and online customer base. Products are priced in a range of $20-$100 per item, with higher price points for the more elite performance products in our range.
In 2019, we launched our in-house New Ventures brand incubator with a mandate to pursue additional product categories ripe for disruption through our technology-powered platform. We believe we can drive significant growth and gain market leadership by developing additional standalone, digitally native brands for future launches.
We believe we can drive significant growth and gain market leadership by developing additional standalone, digitally native brands for future launches. Our business has a powerful and rare combination of scale, growth, and profitability. Since our launch, we have proven our ability to quickly achieve success in new brands, products, categories and international markets.
Our commitment to innovation through our proprietary technology is matched only by our commitment to developing empowering products of the highest quality. The ODDITY platform is designed to support a portfolio of brands and services that aim to innovate and disrupt the expansive global beauty and wellness market. ODDITY’s success is based on our outsider approach.
Our online platform supports a portfolio of stand-alone brands and served approximately 60 million users as of December 31, 2024. Our commitment to innovation through our proprietary technology is matched only by our commitment to developing empowering products of the highest quality, marrying the worlds of technology and physical beauty and wellness products for the benefit of consumers.
Empowering a new generation of consumers to redefine the rules of aging, SpoiledChild allows consumers to control their future by offering an individualized approach to age-control. Through SpoiledBrain, the brand’s proprietary machine learning algorithm, SpoiledChild matches customers to their perfect products across multiple categories based on their unique individual profile.
Empowering a new generation of consumers to redefine the rules of aging, SpoiledChild allows consumers to control their future by offering an individualized approach to age-control. In addition, SpoiledChild seeks to promote sustainability with its patented refillable packaging, designed to reduce waste.
It creates a significant competitive advantage in acquiring users digitally, driving our high engagement and strong and improving repeat purchase rates. This data is also critical to training our collection of machine learning models which drive the user journey, across acquisition, purchase, and post purchase.
This data is also critical to training our collection of machine learning models which drive the user journey, across acquisition, purchase, and post purchase. We believe our data-centric model offers significant financial benefits, similar to other “land and expand” models in the tech industry which support faster growth at higher incremental returns than analog models.
ITEM 4. INFORMATION ON THE COMPANY A. History and Development of the Company We are a consumer tech platform that is built to transform the global beauty and wellness market.
ITEM 4. INFORMATION ON THE COMPANY A. History and Development of the Company ODDITY’s online, direct-to-consumer business was founded in 2018 with our launch of IL MAKIAGE in the United States, with a mission to transform the global beauty and wellness market through technology and entrepreneurial thinking.
Our technology innovations, when combined with our world-class physical product range and compelling brands built to win online, aim to eliminate significant friction for customers and support a seamless end-to-end user experience.
Our technology innovations, world-class physical product range, and compelling brands built to win online have enabled our accelerated global growth by delivering consumers what we believe to be a superior product and experience.
We established ODDITY LABS in conjunction with our acquisition of Revela in April 2023 to bring biotechnology and AI-based molecule discovery to beauty and wellness. ODDITY LABS is designed to deepen our competitive advantage by supporting the development of proprietary, science-backed, and high performance products.
In 2023 we acquired Revela, a Boston-based biotechnology company pioneering pharma-grade technology to discover molecules and formulations for beauty and wellness applications. With this acquisition, we established ODDITY LABS to unleash the full force of advanced biotechnology and digital biology, including AI-based molecule discovery, for the development of high performing beauty and wellness products from proprietary molecules.
We see an abundance of opportunity to disrupt categories with the following characteristics: ● Large Market Size. The global $600 billion beauty and wellness market is full of large sub-markets where consumers have significant demand and willingness to pay for functional products. ● Consumer Pain Points.
We see an abundance of opportunity to disrupt large categories within the global beauty and wellness markets, where customer satisfaction is low and pain points are high, and where legacy brands with offline distribution and insufficient technology capabilities create a compelling opportunity for us to disrupt.
During the year ended December 31, 2023, we scaled to $508.7 million of net revenue, compared to $324.5 million and $222.6 million for the years ended December 31, 2022 and 2021, respectively, representing 56.7% and 45.8% growth year-over-year, respectively.
In just 18 months following our U.S. launch in 2018, and simultaneous with our rapid revenue growth, we achieved profitability due to strong repeat rates. During the year ended December 31, 2024, we scaled to $647 million of net revenue, compared to $509 million and $325 million for the years ended December 31, 2023 and 2022, respectively.
A Holistic End-to-End User Journey Enabled by Technology ODDITY is powered by our vision and commitment to revolutionize the beauty and wellness industry through technology innovations and outside thinking. We have built a holistic, end-to-end customer journey, with each of our user touchpoints seeking to enhance and optimize the overall experience.
We have built a holistic, end-to-end customer journey, with each of our user touchpoints seeking to enhance and optimize the overall experience. Our integrated model aims to eliminate significant friction, bringing discovery, product matching, tutorial, purchase, and repeat engagement under a single platform. It requires significant investments in technology talent, capabilities, and products.
Our platform is designed to support a portfolio of brands and serves approximately 50 million users as of December 31, 2023. IL MAKIAGE, our first brand, is the largest online beauty brand in the United States, with growing presence overseas. SpoiledChild, our second brand, launched in 2022, is a multicategory wellness brand, including hair and skin products.
We launched IL MAKIAGE in the United States in 2018 as an online beauty brand and SpoiledChild in 2022 as an online wellness brand, and plan to launch additional brands off of our platform in the future, with Brand 3 and 4 already in development.
We believe we can drive significant growth and gain market leadership by developing additional standalone, digitally native brands for future launches. Building a Platform to Transform a $600 Billion Market We operate a different model to that of the incumbents that have historically dominated the global beauty and wellness market.
Our Platform We operate a different model to that of the incumbents that have historically dominated the global beauty and wellness market. This distinctive approach is core to our competitive advantage and ability to disrupt the market and gain market share. ● Outsiders by Design. Disrupting a market requires outside thinking.
We built the ODDITY platform to support a diverse portfolio of current and future owned and partnered beauty and wellness brands, with a shared technology backbone, infrastructure, and commitment to rigorous process. In 2019, we launched our in-house New Ventures brand incubator with a mandate to pursue additional product categories ripe for disruption through our technology-powered platform.
SpoiledChild, our second brand, which we launched in 2022, is a multicategory wellness brand, including hair and skin products. Our in-house New Ventures brand incubator has a mandate to pursue additional brands and product categories ripe for disruption, including Brand 3, a telehealth platform, and Brand 4, which are both currently in development.
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(“Voyage81”), an industry leader and pioneer in hyperspectral imaging. We believe this technology will allow us to rapidly expand our product capabilities and develop, for example, more personalized products and brands in categories that traditionally require in-person diagnostics. 57 Table of Contents In 2023, we established ODDITY LABS, an industry leading biotechnology center and pioneer in artificial intelligence-based molecule discovery.
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We have rapidly and profitably scaled since then and believe that today we are the world’s largest online, direct-to-consumer company in the beauty and wellness industry based on revenue. In 2017 we secured an investment from L Catterton to support the launch of our technology platform and online business in the United States.
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ODDITY LABS develops a wide range of proprietary ingredients, including novel molecules, probiotics, and peptides, for the advancement of high performing, science-backed, and beauty and wellness products that address a broad spectrum of consumer needs. ODDITY LABS was formed in conjunction with our acquisition of Revela Inc.
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In 2023, we acquired Revela, a Boston-based biotechnology company pioneering pharma-grade technology to discover molecules and formulations for beauty and wellness products. With this acquisition, we established ODDITY LABS and accelerated our investment in biotech, including AI-based molecule discovery. Capital Expenditures See the section titled “Item 5.B.
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(“Revela”), a Boston-based biotechnology company focused on the development of new molecules for beauty and wellness products. Capital Expenditures Our capital expenditures amounted to approximately $2.1 million for the year ended December 31, 2023, approximately $2.3 million for the year ended December 31, 2022 and approximately $2.4 million for the year ended December 31, 2021.
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Operating and Financial Review and Prospects—Liquidity and Capital Resources—Capital Expenditures.” General Corporate Information ODDITY Tech Ltd. (formerly known as Il Makiage Cosmetics (2013) Ltd.) was incorporated on June 23, 2013 in Israel under the Companies Law. Our common shares have been listed on the Nasdaq since July 2023.
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Our historical capital expenditures are primarily related to expenditures associated with our headquarters and other office expenses. We expect that cash from operating activities and financing activities will be used to meet our capital expenditure needs in the foreseeable future. General Corporate Information ODDITY Tech Ltd.
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We believe this technology and our accelerated investment has the potential to radically transform our industry for the benefit of consumers, delivering products that solve their toughest pain points. We believe IL MAKIAGE, our first brand, is the largest online beauty brand in the United States as measured by revenue, with growing presence overseas.
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We are a technology company seeking to reinvent every aspect of a massive industry. Our tech team is the largest team within our company today and comprises over 40% of our headcount as of December 31, 2023.
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We intend to sustain our high-growth and attractive margin profile that consistently delivers great outcomes for our stakeholders. To do this, we maintain a long-term growth strategy that guides our continued investments that support profitable growth and market share gains within a large and attractive global beauty and wellness market.
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We invest heavily in data science, machine learning, and computer vision, and we have an evergreen commitment to exploring and investing in emerging technologies. Our technology innovations, when combined with our world-class physical product range and compelling brands built to win online, aim to eliminate significant friction for customers and support a seamless end-to-end user experience.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Further, we believe this measure is helpful in highlighting trends in our operating results, because it excludes the impact of items that are outside the control of management or not reflective of our ongoing operations and performance.
Further, we believe this measure is helpful in highlighting trends in our operating results, because it excludes the impact of items that are outside the control of management or not reflective of our ongoing operations and performance.
Investing Activities Net cash used in investing activities for the year ended December 31, 2023 was $140.0 million, compared to $25.8 million used in investing activities for the year ended December 31, 2022.
Net cash used in investing activities for the year ended December 31, 2023 was $140.0 million, compared to $25.8 million used in investing activities for the year ended December 31, 2022.
Financing Activities Net cash provided by financing activities was $48.8 million for the year ended December 31, 2023, compared to $0.2 million used in financing activities for the year ended December 31, 2022.
Net cash provided by financing activities was $48.8 million for the year ended December 31, 2023, compared to $0.2 million used in financing activities for the year ended December 31, 2022.
For example, Adjusted EBITDA does not reflect: (i) interest expense or the cash requirements necessary to service interest or principal payments on our debt, which reduces the cash available to us, (ii) tax payments that may represent a reduction in cash available to us, (iii) non-cash charges for depreciation of property and equipment and amortization of intangible assets, even though the assets being depreciated and amortized may have to be replaced in the future and would require cash capital expenditure requirements for such replacements or for new capital expenditure requirements, or (iv) share-based compensation expense, which is expected to be a recurring expense for our business.
For example, Adjusted EBITDA does not reflect: (i) interest expense or income or the cash requirements necessary to service interest or principal payments on debt, which reduces the cash available to us, (ii) tax payments that may represent a reduction in cash available to us, (iii) non-cash charges for depreciation of property and equipment and amortization of intangible assets, even though the assets being depreciated and amortized may have to be replaced in the future and would require cash capital expenditure requirements for such replacements or for new capital expenditure requirements, or (iv) share-based compensation expense, which is expected to be a recurring expense for our business.
See the section titled “Item 6.C. Directors, Senior Management and Employees—Board Practices—Employment and Consulting Agreements with Executive Officers.” These obligations are partially funded through accounts maintained with financial institutions and recognized as an asset on our balance sheet. Of this amount, $0.6 million is unfunded.
See the section titled “Item 6.C. Directors, Senior Management and Employees—Board Practices—Employment and Consulting Agreements with Executive Officers.” These obligations are partially funded through accounts maintained with financial institutions and recognized as an asset on our balance sheet. Of this amount, $0.5 million is unfunded.
Financial Expenses (Income), Net Financial expenses (income), net consists primarily of interest income on our bank deposits and marketable securities as well as gain or loss on foreign currency, mainly driven by liabilities denominated in currencies other than U.S. dollars.
Financial Income, Net Financial income, net consists primarily of interest income on our bank deposits and marketable securities as well as gain or loss on foreign currency, mainly driven by liabilities denominated in currencies other than U.S. dollars.
Non-GAAP Financial Measures Adjusted EBITDA and Adjusted EBITDA Margin Adjusted EBITDA is defined as net income before financial expenses (income), net, taxes on income, and depreciation and amortization as further adjusted to exclude share-based compensation expense, and non-recurring adjustments. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by net revenue.
Non-GAAP Financial Measures Adjusted EBITDA and Adjusted EBITDA Margin Adjusted EBITDA is defined as net income before financial income, net, taxes on income, and depreciation and amortization as further adjusted to exclude share-based compensation expense, and non-recurring adjustments. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by net revenue.
Financial Expenses (Income), Net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2022 ​ $ Change ​ % Change ​ ​ (in thousands) Financial Income, net $ (4,283) $ (1,247) $ (3,036) 243.5 % ​ Financial expenses (income), net increased by $3.0 million for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Financial Income, Net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2022 ​ $ Change ​ % Change ​ ​ (in thousands) Financial Income, net $ (4,283) $ (1,247) $ (3,036) 243.5 % ​ Financial income, net increased by $3.0 million for the year ended December 31, 2023, compared to the year ended December 31, 2022.
If actual market conditions are less favorable than those we project, further adjustments may be required that would increase the cost of goods sold in the period in which such a determination was made. 92 Table of Contents Income Taxes Income taxes are accounted for under the asset and liability method.
If actual market conditions are less favorable than those we project, further adjustments may be required that would increase the cost of goods sold in the period in which such a determination was made. 82 Table of Contents Income Taxes Income taxes are accounted for under the asset and liability method.
Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates. 91 Table of Contents Revenue Recognition Our primary source of revenue is from the sales of our products through our online direct-to-consumer model.
Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates. 81 Table of Contents Revenue Recognition Our primary source of revenue is from the sales of our products through our online direct-to-consumer model.
Taxes on Income Taxes on income consists of income taxes related to Israel and United States federal and state taxes, and changes in deferred tax assets.
Taxes on Income Taxes on income mainly consists of income taxes related to Israel and United States federal and state taxes, and changes in deferred tax assets.
Borrowings under the 2024 Credit Facilities will accrue interest at a percentage rate per annum equal to SOFR + 2.7% for borrowings of up to $70 million; SOFR + 3.5% for fixed revolving loans provided for a period shorter than a year; and Prime + 0.1% for on-call borrowings made in NIS.
Borrowings under the 2024 Credit Facilities accrued interest at a percentage rate per annum equal to SOFR + 2.7% for borrowings of up to $70 million; SOFR + 3.5% for fixed revolving loans provided for a period shorter than a year; and Prime + 0.1% for on-call borrowings made in NIS.
Gross Profit and Gross Margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2022 ​ $ Change ​ % Change ​ ​ (in thousands) Gross profit $ 358,229 $ 218,050 $ 140,179 64.3 % Gross margin ​ 70.4 % 67.2 % 3.2 % ​ Our gross profit increased by $140.2 million, or 64.3%, for the year ended December 31, 2023 compared to the year ended December 31, 2022 as a result of the growth in our net revenue.
Gross Profit and Gross Margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2022 ​ $ Change ​ % Change ​ ​ (in thousands) Gross profit $ 358,229 $ 218,050 $ 140,179 64.3 % Gross margin ​ 70.4 % 67.2 % 3.2 % ​ 74 Table of Contents Our gross profit increased by $140.2 million, or 64.3%, for the year ended December 31, 2023, compared to the year ended December 31, 2022 as a result of the growth in our net revenue.
Net revenue is primarily driven by the number of orders. Cost of Revenue Cost of revenue consists principally of the costs to procure our products, including the amounts invoiced by our third-party contract manufacturers and suppliers for inventory, as well as inbound and outbound shipping costs, duties and other related costs, and inventory write-offs.
Net revenue is primarily driven by the number of orders. 71 Table of Contents Cost of Revenue Cost of revenue consists principally of the costs to procure our products, including the amounts invoiced by our third-party contract manufacturers and suppliers for inventory, as well as inbound and outbound shipping costs, duties and other related costs, and inventory write-offs.
We have provided below a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure presented in accordance with U.S. GAAP. We believe Adjusted EBITDA and Adjusted EBITDA margin are useful for financial and operational decision-making and as a means to evaluate period-to-period comparisons.
We have provided below a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure presented in accordance with U.S. GAAP. 76 Table of Contents We believe Adjusted EBITDA and Adjusted EBITDA margin are useful for financial and operational decision-making and as a means to evaluate period-to-period comparisons.
The Company also offers a “Try Before You Buy” program, which allows some of its customers to order certain products and pay for the products after the trial period ends. Under ASC 606 the Company recognizes revenue for orders placed under the program when the trial period lapses.
The Company also offers a “Try Before You Buy” program, which allows some of its customers to order certain products and pay for the products after the trial period ends. Under ASC 606 we recognize revenue for orders placed under the program when the trial period lapses.
These credit facilities also include a requirement to report our financial statements and other financial information, as may be requested from time to time. Sufficiency of Capital We believe that our existing cash and cash equivalents and positive cash flows from operations will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months.
These credit facilities also included a requirement to report our financial statements and other financial information, as would be requested from time to time. Sufficiency of Capital We believe that our existing cash and cash equivalents and positive cash flows from operations will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months.
As of December 31, 2023, we had repaid all amounts outstanding under the 2020 Credit Facility. 2016 Credit Line In May 2016, we entered into a credit line agreement with Bank Hapoalim (the “2016 Credit Line”), denominated in NIS, pursuant to which we may withdraw an aggregate principal amount of up to NIS 25 million (approximately $6.9 million according to the applicable exchange rate as of December 31, 2023).
As of December 31, 2023, we had repaid all amounts outstanding under the 2020 Credit Facility and the facility was subsequently terminated. 2016 Credit Line In May 2016, we entered into a credit line agreement with Bank Hapoalim (the “2016 Credit Line”), denominated in NIS, pursuant to which we could withdraw an aggregate principal amount of up to NIS 25 million (approximately $6.9 million according to the applicable exchange rate as of December 31, 2023).
Taxes on Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2022 ​ $ Change ​ % Change ​ ​ (in thousands) Taxes on Income $ 20,067 $ 7,184 $ 12,883 179.3 % 84 Table of Contents ​ Taxes on income increased by $12.9 million, or 179.3%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Taxes on Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2022 ​ $ Change ​ % Change ​ ​ (in thousands) Taxes on Income $ 20,067 $ 7,184 $ 12,883 179.3 % ​ Taxes on income increased by $12.9 million, or 179.3%, for the year ended December 31, 2023, compared to the year ended December 31, 2022.
As we recruit additional personnel, we remain focused on developing our technology expertise across the full spectrum of engineering, architecture, infrastructure, data engineering, integrations, security, agile and project management, and information systems and planning.
We remain focused on developing our technology expertise across the full spectrum of engineering, architecture, infrastructure, data engineering, integrations, security, agile and project management, and information systems and planning.
As of December 31, 2023, we had repaid all amounts outstanding under the 2016 Credit Line. The loans made under the 2016 Credit Line and 2020 Credit Facility are secured by a floating charge on our assets and liens on deposit in the amount of $2.0 million.
As of December 31, 2023, we had repaid all amounts outstanding under the 2016 Credit Line and the agreement was subsequently terminated. The loans made under the 2016 Credit Line and 2020 Credit Facility were secured by a floating charge on our assets and liens on deposit in the amount of $2.0 million.
The increase was primarily driven by higher earnings before tax. Key Operating and Non-GAAP Financial Measures We regularly review certain key operating and non-GAAP financial measures to evaluate our business, measure our performance, identify trends, prepare financial projections and make business decisions.
The increase was primarily driven by higher earnings before tax. 75 Table of Contents Non-GAAP Financial Measures We regularly review certain non-GAAP financial measures to evaluate our business, measure our performance, identify trends, prepare financial projections and make business decisions.
The principal amount bears interest at a floating per annum rate equal to prime plus 1.4%, and we pay an additional annual fee of 0.4% of the unused credit line. The 2016 Credit Line has a maturity date of one year which is automatically renewed on a yearly basis.
The principal amount bore interest at a floating per annum rate equal to prime plus 1.4%, and we paid an additional annual fee of 0.4% of the unused credit line. The 2016 Credit Line had a maturity date of one year which was automatically renewed on a yearly basis.
Investment in Innovation and Technology Our success is dependent on our ability to sustain innovation and technology leadership to maintain our competitive advantage. We will continue to invest in our people, product and infrastructure to maintain and grow our consumer tech platform and to propel the beauty and wellness industry forward.
Investment in Innovation and Technology Our success is dependent on our ability to sustain innovation and technology leadership to maintain our competitive advantage. We will continue to invest in our people, product and infrastructure to maintain and grow our consumer tech platform.
Risk Factors—Risks Related to Our Business and Industry—We may need additional capital, and we cannot be sure that additional financing will be available on favorable terms, if at all.” 89 Table of Contents Cash Flows The following table summarizes our cash flows for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31 ​ ​ 2023 ​ 2022 ​ 2021 ​ ​ (in thousands) Cash provided by operating activities $ 87,455 $ 39,032 $ 10,224 Cash used in investing activities ​ (139,991) ​ (25,780) ​ (18,782) Cash provided by (used in) financing activities ​ 48,811 ​ (246) ​ (318) Effect of exchange rate fluctuations on cash and cash equivalents ​ (623) ​ (781) ​ (359) Net (decrease) increase in cash, cash equivalents and restricted cash ​ $ (4,348) ​ $ 12,225 ​ $ (9,235) ​ Operating Activities Our largest source of operating cash is cash collected from sales of our products to our customers.
Risk Factors—Risks Related to Our Business and Industry—We may need additional capital, and we cannot be sure that additional financing will be available on favorable terms, if at all.” Cash Flows The following table summarizes our cash flows for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31 ​ ​ 2024 ​ 2023 ​ 2022 ​ ​ (in thousands) Cash provided by operating activities $ 137,764 $ 87,455 $ 39,032 Cash provided by (used in) investing activities ​ 1,352 ​ (139,991) ​ (25,780) Cash (used in) provided by financing activities ​ (127,299) ​ 48,811 ​ (246) Effect of exchange rate fluctuations on cash and cash equivalents ​ (236) ​ (623) ​ (781) Net increase (decrease) in cash, cash equivalents and restricted cash ​ $ 11,581 ​ $ (4,348) ​ $ 12,225 ​ Operating Activities Our largest source of operating cash is cash collected from sales of our products to our customers.
An additional commitment fee of 0.32% will apply to any unused credit. The obligations of the Company under the 2024 Credit Facilities include a negative pledge by the Company and are guaranteed by certain of the Company’s subsidiaries.
An additional commitment fee of 0.32% applied to any unused credit. The obligations of the Company under the 2024 Credit Facilities included a negative pledge by the Company and were guaranteed by certain of the Company’s subsidiaries.
The return rate decreased to 12.0% for the year ended December 31, 2023 compared to 14.8% for the year ended December 31, 2022. 83 Table of Contents Cost of Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2022 ​ $ Change ​ % Change ​ ​ (in thousands) Cost of revenue $ 150,456 $ 106,470 $ 43,986 41.3 % ​ Cost of revenue increased by $44.0 million, or 41.3%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Cost of Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2022 ​ $ Change ​ % Change ​ ​ (in thousands) Cost of revenue $ 150,456 $ 106,470 $ 43,986 41.3 % ​ Cost of revenue increased by $44.0 million, or 41.3%, for the year ended December 31, 2023, compared to the year ended December 31, 2022.
Other companies, including companies in our industry, may calculate Adjusted EBITDA and Adjusted EBITDA margin differently or not at all, which reduces their usefulness as comparative measures. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2022 ​ 2021 ​ ​ (in thousands) Net Income $ 58,534 $ 21,728 $ 13,920 ​ Financial expenses (income), net ​ (4,283) ​ (1,247) ​ 877 ​ Taxes on income ​ 20,067 ​ 7,184 ​ 4,715 ​ Depreciation and amortization ​ 8,605 ​ 4,408 ​ 4,006 ​ Share-based compensation ​ 24,111 ​ 6,697 ​ 2,107 ​ Non-recurring adjustments ​ 300 ​ 701 ​ 1,003 ​ Adjusted EBITDA ​ $ 107,334 ​ $ 39,471 ​ $ 26,628 ​ Net income margin ​ 11.5 % 6.7 % 6.3 % Adjusted EBITDA margin ​ 21.1 % 12.2 % 12.0 % ​ ​ 87 Table of Contents Adjusted Operating Income Adjusted operating income is defined as operating income adjusted for the impact of share-based compensation and non-recurring adjustments.
Other companies, including companies in our industry, may calculate Adjusted EBITDA and Adjusted EBITDA margin differently or not at all, which reduces their usefulness as comparative measures. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ 2022 ​ ​ (in thousands) Net Income $ 101,491 $ 58,534 $ 21,728 ​ Financial income, net ​ (12,306) ​ (4,283) ​ (1,247) ​ Taxes on income ​ 26,415 ​ 20,067 ​ 7,184 ​ Depreciation and amortization ​ 9,827 ​ 8,605 ​ 4,408 ​ Share-based compensation ​ 25,022 ​ 24,111 ​ 6,697 ​ Non-recurring adjustments ​ — ​ 300 ​ 701 ​ Adjusted EBITDA ​ $ 150,449 ​ $ 107,334 ​ $ 39,471 ​ Net income margin ​ 15.7 % 11.5 % 6.7 % Adjusted EBITDA margin ​ 23.3 % 21.1 % 12.2 % ​ Adjusted Operating Income Adjusted operating income is defined as operating income adjusted for the impact of share-based compensation and non-recurring adjustments.
The principal amount of the 2020 Credit Facility bears interest at a floating per annum rate equal to prime plus 1.5%. The 2020 Credit Facility matures in April 2025.
The principal amount of the 2020 Credit Facility bore interest at a floating per annum rate equal to prime plus 1.5%. The 2020 Credit Facility had a maturity date of April 2025.
Order billings increased 50.6% to $595.8 million for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Order billings increased 50.6% to $595.8 million for the year ended December 31, 2023 compared to the year ended December 31, 2022. The return rate decreased to 12.0% for the year ended December 31, 2023 compared to 14.8% for the year ended December 31, 2022.
As of December 31, 2023, we had $168.4 million of cash and cash equivalents, restricted cash, short-term deposits and marketable securities. 88 Table of Contents Indebtedness 2024 Credit Facilities In January 2024, we entered into separate credit facility arrangements with two Israeli banks, Bank Leumi and Bank Hapoalim (the “2024 Credit Facilities”), denominated in U.S. dollars, pursuant to which we may withdraw an aggregate principal amount of up to $100 million.
As of December 31, 2024, we had $169.1 million of cash and cash equivalents, restricted cash, short-term deposits and marketable securities Indebtedness 2025 Credit Facilities On January 30, 2025, we entered into separate credit facility arrangements with three Israeli banks, Bank Leumi, Discount Bank and Bank Hapoalim (the “2025 Credit Facilities”), denominated in U.S. dollars, pursuant to which we may withdraw an aggregate principal amount of up to $200 million.
GAAP. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2022 ​ 2021 ​ ​ (in thousands) Operating income $ 74,318 $ 27,665 $ 19,512 Share-based compensation ​ 24,111 ​ 6,697 ​ 2,107 Non-recurring adjustments ​ 300 ​ 701 ​ 1,003 Adjusted operating income ​ $ 98,729 ​ $ 35,063 ​ $ 22,622 ​ Adjusted Net Income Adjusted net income is defined as net income adjusted for the impact of share-based compensation, non-recurring adjustments, and the tax effect of Non-GAAP adjustments.
GAAP. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ 2022 ​ ​ (in thousands) Operating income $ 115,600 $ 74,318 $ 27,665 Share-based compensation ​ 25,022 ​ 24,111 ​ 6,697 Non-recurring adjustments ​ — ​ 300 ​ 701 Adjusted operating income ​ $ 140,622 ​ $ 98,729 ​ $ 35,063 ​ 77 Table of Contents Adjusted Net Income Adjusted net income is defined as net income adjusted for the impact of share-based compensation, non-recurring adjustments, and the tax effect of Non-GAAP adjustments.
The changes in operating assets and liabilities were primarily driven by an increase in inventory to support the growth of our business, partially offset by an increase in trade payables and other accounts payable.
The changes in operating assets and liabilities were primarily driven by an increase in trade payables and other accounts payable, partially offset by an increase in inventory and prepaid expenses and other receivables.
GAAP. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ 2023 ​ 2022 ​ 2021 ​ ​ (in thousands) Net income $ 58,534 $ 21,728 $ 13,920 Share-based compensation ​ 24,111 ​ 6,697 ​ 2,107 Non-recurring adjustments ​ 300 ​ 701 ​ 1,003 Tax impact ​ (6,232) ​ (1,828) ​ (787) Adjusted net income ​ $ 76,713 ​ $ 27,298 ​ $ 16,243 ​ B.
GAAP. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ 2024 ​ 2023 ​ 2022 ​ ​ (in thousands) Net income $ 101,491 $ 58,534 $ 21,728 Share-based compensation ​ 25,022 ​ 24,111 ​ 6,697 Non-recurring adjustments ​ — ​ 300 ​ 701 Tax impact ​ (5,168) ​ (6,232) ​ (1,828) Adjusted net income ​ $ 121,345 ​ $ 76,713 ​ $ 27,298 ​ B.
Our historical results and period-to-period comparisons for any prior period are not necessarily indicative of results expected in any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2022 ​ 2021 ​ ​ ​ ​ ​ % of net ​ ​ ​ ​ % of net ​ ​ ​ ​ % of net ​ ​ (in thousands) revenue (in thousands) revenue (in thousands) revenue Statements of Operations Data: ​ ​ ​ ​ Net revenue ​ $ 508,685 100.0 % $ 324,520 100.0 % $ 222,555 100.0 % Cost of revenue ​ 150,456 29.6 ​ 106,470 32.8 ​ 69,374 31.2 ​ Gross profit ​ 358,229 70.4 ​ 218,050 67.2 ​ 153,181 68.8 ​ Selling, general and administrative expenses ​ 283,911 55.8 ​ 190,385 58.7 ​ 133,669 60.1 ​ Operating income ​ 74,318 14.6 ​ 27,665 8.5 ​ 19,512 8.8 ​ Financial expenses (income), net ​ (4,283) (0.8) ​ (1,247) (0.4) ​ 877 0.4 ​ Income before taxes on income ​ 78,601 15.4 ​ 28,912 8.9 ​ 18,635 8.4 ​ Taxes on income ​ 20,067 3.9 ​ 7,184 2.2 ​ 4,715 2.1 ​ Net income ​ $ 58,534 11.5 % $ 21,728 6.7 % $ 13,920 6.3 % ​ Comparison of Year Ended December 31, 2023 and 2022 Net Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2022 ​ $ Change ​ % Change ​ ​ (in thousands) Net revenue $ 508,685 $ 324,520 $ 184,165 56.7 % ​ Net revenue increased by $184.2 million, or 56.7%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily driven by a 40.2% increase in orders.
Our historical results and period-to-period comparisons for any prior period are not necessarily indicative of results expected in any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ 2022 ​ ​ ​ ​ ​ % of net ​ ​ ​ ​ % of net ​ ​ ​ ​ % of net ​ ​ (in thousands) revenue (in thousands) revenue (in thousands) revenue Statements of Operations Data: ​ ​ ​ ​ Net revenue ​ $ 647,040 100.0 % $ 508,685 100.0 % $ 324,520 100.0 % Cost of revenue ​ 178,718 27.6 ​ 150,456 29.6 ​ 106,470 32.8 ​ Gross profit ​ 468,322 72.4 ​ 358,229 70.4 ​ 218,050 67.2 ​ Selling, general and administrative expenses ​ 352,722 54.5 ​ 283,911 55.8 ​ 190,385 58.7 ​ Operating income ​ 115,600 17.9 ​ 74,318 14.6 ​ 27,665 8.5 ​ Financial income, net ​ (12,306) (1.9) ​ (4,283) (0.8) ​ (1,247) (0.4) ​ Income before taxes on income ​ 127,906 19.8 ​ 78,601 15.4 ​ 28,912 8.9 ​ Taxes on income ​ 26,415 4.1 ​ 20,067 3.9 ​ 7,184 2.2 ​ Net income ​ $ 101,491 15.7 % $ 58,534 11.5 % $ 21,728 6.7 % ​ 72 Table of Contents Comparison of Year Ended December 31, 2024 and 2023 Net Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 ​ $ Change % Change ​ ​ (in thousands) ​ Net revenue $ 647,040 $ 508,685 $ 138,355 27.2 % ​ Net revenue increased by $138.4 million, or 27.2%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Driving Customer Acquisition, Retention, and Repeat Purchases We bring visitors to our website, turn visitors into users by asking questions and learning about them, and then leverage the data we have across the platform to convert them into paying customers.
Attractive Unit Economics Supported by Efficient Customer Acquisition and Repeat Purchases Through our technology platform we are able to efficiently bring visitors to our website, turn visitors into users by learning about them through engagement, leverage the data we have across the platform to convert those users into paying customers, and then convert customers into repeat customers.
For the year ended December 31, 2022, the non-cash charges included $4.4 million of depreciation and amortization and $6.7 million of share-based compensation. For the year ended December 31, 2021, non-cash charges included $4.0 million of depreciation and amortization, and $2.1 million of share-based compensation.
For the year ended December 31, 2024, the non-cash charges included principally $9.8 million of depreciation and amortization and $25.0 million of share-based compensation. For the year ended December 31, 2023, non-cash charges included principally $8.6 million of depreciation and amortization and $24.1 million of share-based compensation.
Comparison of Years Ended December 31, 2022 and 2021 Net Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 ​ $ Change % Change ​ ​ (in thousands) ​ Net revenue $ 324,520 $ 222,555 $ 101,965 45.8 % ​ Net revenue increased by $102.0 million, or 45.8%, for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily driven by a 45% increase in orders.
Comparison of Years Ended December 31, 2023 and 2022 Net Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2022 ​ $ Change ​ % Change ​ ​ (in thousands) Net revenue $ 508,685 $ 324,520 $ 184,165 56.7 % ​ Net revenue increased by $184.2 million, or 56.7%, for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily driven by a 40.2% increase in orders.
We have seen rapid success in our international market launches, with net revenues outside of the United States of $94.6 million, $83.4 million and $60.6 million for the years ended December 31, 2023, 2022 and 2021, respectively, accounting for approximately 19%, 26% and 27% of our net revenue for the years then ended, respectively.
We had net revenue outside of the United States of $100.3 million, $94.6 million and $83.4 million for the years ended December 31, 2024, 2023 and 2022, respectively, accounting for approximately 15%, 19% and 26% of our net revenue for the years then ended, respectively.
The decrease was primarily attributable to favorable foreign currency exchange rates and interest on bank deposits. See the section titled “Item 5.B. Liquidity and Capital Resources” below.
The increase was primarily attributable to interest on bank deposits and marketable securities. See the section titled “Item 5.B. Operating and Financial Review and Prospects—Liquidity and Capital Resources” below.
Our net cash for the years ended December 31, 2022 and 2021 consisted of $21.7 million and $13.9 million of net income, adjusted for $11.1 million and $6.1 million of non-cash expenses and $6.2 million of net cash provided and $9.8 million of net cash used as a result of changes in operating assets and liabilities, respectively.
Our net cash provided by operating activities for the year ended December 31, 2024 and 2023 consisted of $101.5 million and $58.5 million of net income, adjusted for $33.6 million and $32.2 million of non-cash expenses and $2.7 million and $(3.2) million of net cash provided (used in) as a result of changes in operating assets and liabilities, respectively.
GAAP is set forth below under “Non-GAAP Financial Measures.” ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2022 ​ 2021 ​ ​ (in thousands) Key Operating Measure ​ ​ ​ ​ ​ ​ ​ ​ ​ Order Billings $ 595,772 $ 395,489 $ 267,814 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2022 ​ 2021 Non-GAAP Financial Measures ​ (in thousands) Adjusted EBITDA $ 107,334 $ 39,471 $ 26,628 ​ Adjusted EBITDA margin ​ 21.1 % 12.2 % 12.0 % Adjusted operating income ​ $ 98,729 ​ $ 35,063 ​ $ 22,622 ​ Adjusted net income ​ $ 76,713 ​ $ 27,298 ​ $ 16,243 ​ ​ 86 Table of Contents Key Operating Measure Order Billings Order billings represent amounts invoiced to customers during the period.
GAAP is set forth below under “Non-GAAP Financial Measures.” ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ 2022 Non-GAAP Financial Measures ​ (in thousands) Adjusted EBITDA $ 150,449 $ 107,334 $ 39,471 ​ Adjusted EBITDA margin ​ 23.3 % 21.1 % 12.2 % Adjusted operating income ​ $ 140,622 ​ $ 98,729 ​ $ 35,063 ​ Adjusted net income ​ $ 121,345 ​ $ 76,713 ​ $ 27,298 ​ ​ Note Regarding the Disclosure of Order Billings Since our IPO, we have disclosed Order billings, which represent amounts invoiced to customers during the period.
Liquidity and Capital Resources Since inception, we have financed operations primarily through revenue from operations, the sale of equity securities, and borrowings under our credit facilities.
Liquidity and Capital Resources Since inception, we have financed operations primarily through revenue from operations.
Data collected from users forms a critical component of our customer acquisition funnel as it enables us to efficiently convert users to customers, informs our brand and product roadmap, and improves our machine learning algorithms to more accurately predict product matches and develop new products. ​ 80 Table of Contents We define a user as a visitor on which we have collected at least 50 discrete data points as they engage with and interact with our websites.
Data collected from users forms a critical component of our customer acquisition funnel as it enables us to efficiently convert users to customers, informs our brand and product roadmap, and improves our machine learning algorithms to more accurately predict product matches and develop new products. 70 Table of Contents A Proven Brand Scaling Machine We have an excellent track record of launching and scaling online brands, starting with IL MAKIAGE in 2018 and SpoiledChild in 2022.
The increase in cost of revenue was primarily attributable to increased orders, and to a lesser degree was attributable to increased cost inflation across shipping and supply chain.
The increase in cost of revenue was primarily attributable to increased orders partially offset by supply chain efficiencies and cost improvement efforts.
The 2024 Credit Facilities also contain customary affirmative and negative covenants, as well as certain financial covenants, including that the Company’s shareholder equity ratio shall not fall, at any given time, below 20% and that the net debt-to-EBITDA ratio of the Company does not exceed 3x of EBITDA. 2020 Credit Facility In April 2020, we entered into a loan agreement with Bank Hapoalim, denominated in NIS, pursuant to which we borrowed an aggregate principal amount of NIS 5 million (approximately $1.4 million according to the applicable exchange rate as of December 31, 2023) (the “2020 Credit Facility”).
The 2024 Credit Facilities were not utilized by the Company and were replaced in full by the 2025 Credit Facilities in January 2025. 78 Table of Contents 2020 Credit Facility In April 2020, we entered into a loan agreement with Bank Hapoalim, denominated in NIS, pursuant to which we borrowed an aggregate principal amount of NIS 5 million (approximately $1.4 million according to the applicable exchange rate as of December 31, 2023) (the “2020 Credit Facility”).
Key Information—Risk Factors” and “Special Note Regarding Forward-Looking Statements.” 79 Table of Contents A. Operating Results Key Factors Affecting Our Performance We believe that our continued success and growth are dependent on a number of factors that provide both significant areas of opportunity as well as potential challenges.
Operating Results Key Factors Affecting Our Performance We believe that our continued success and growth are dependent on a number of factors that provide both significant areas of opportunity as well as potential challenges. We have outlined some of these factors below, as well as in the section titled “Item 3.D.
We expect that gross profit will fluctuate and continue to be affected by various factors in the future, including the timing and mix of product and brand launches, commodity prices and transportation rates, manufacturing costs, and our ability to reduce costs in any given period. 82 Table of Contents Selling, General and Administrative Expenses Selling, general and administrative expenses primarily consist of marketing and advertising expenses, employee-related costs, including salaries, benefits, and share-based compensation, research and development costs, depreciation, and amortization expenses, professional fees, payments processing fees, and other general expenses.
Gross margin measures our gross profit as a percentage of net revenue. We expect that gross profit will fluctuate and continue to be affected by various factors in the future, including the timing and mix of product and brand launches, commodity prices and transportation rates, manufacturing costs, and our ability to reduce costs in any given period.
We have outlined some of these factors below, as well as in the section titled “Item 3.D. Key Information—Risk Factors.” Growing and Engaging with our Powerful User Base We are a data-driven company and one of our significant differentiators is the vast amount of quality, actionable data that we are able to learn about our users.
We are a data-driven company and one of our significant differentiators is the vast amount of quality, actionable data that we are able to learn about our users.
Net cash provided by operating activities increased to $39.0 million for the year ended December 31, 2022, compared to $10.2 million for the year ended December 31, 2021, primarily due to an increase in net income adjusted for certain non-cash expenses and change in working capital.
Our primary uses of cash from operating activities are for marketing expenses, personnel expenses, and general and administrative expenses. 79 Table of Contents Net cash provided by operating activities increased to $137.8 million for the year ended December 31, 2024, compared to $87.5 million for the year ended December 31, 2023, primarily due to an increase in net revenue and higher gross margins, leading to an increase in net income adjusted for certain non-cash expenses and change in working capital.
Net cash used in investing activities for the year ended December 31, 2022 was $25.8 million, compared to $18.8 million used in investing activities for the year ended December 31, 2021. The $25.8 million of net cash used for investing activities in 2022 was primarily related to $18.0 million investment in short-term deposits.
The $1.4 million of net cash provided by investing activities in the year ended December 31, 2024 was primarily related to a $(30.0) million net change in short-term deposits, a $(18.5) million investment in marketable securities and $(3.3) million related to capital expenditures.
Gross Profit and Gross Margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2022 ​ 2021 ​ $ Change ​ % Change ​ ​ (in thousands) Gross profit $ 218,050 $ 153,181 $ 64,869 42.3 % Gross margin ​ 67.2 % 68.8 % (1.6) % ​ Our gross profit increased by $64.9 million, or 42.3%, for the year ended December 31, 2022 compared to the year ended December 31, 2021 as a result of the growth in our net revenue during 2022.
Gross Profit and Gross Margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ $ Change ​ % Change ​ ​ (in thousands) Gross profit $ 468,322 $ 358,229 $ 110,093 30.7 % Gross margin ​ 72.4 % 70.4 % 2.0 % ​ Our gross profit increased by $110.1 million, or 30.7%, for the year ended December 31, 2024 compared to the year ended December 31, 2023 as a result of the growth in our net revenue.
Contractual Obligations The following table summarizes our contractual obligations as of December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less ​ ​ ​ ​ ​ ​ ​ More ​ ​ ​ ​ ​ than ​ ​ ​ ​ ​ ​ ​ than ​ ​ Total ​ 1 Year ​ 1 - 3 Years ​ 3 - 5 Years ​ 5 Years ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease commitments $ 18,343 $ 5,832 $ 6,786 $ 3,392 $ 2,333 Severance pay obligations (1) ​ 2,319 ​ — ​ — ​ — ​ — Total contractual obligations ​ $ 20,662 ​ $ 5,832 ​ $ 6,786 ​ $ 3,392 ​ $ 2,333 (1) Severance pay obligations to our Israeli employees, as required under Israeli labor law, are payable only upon termination, retirement or death of the respective employee.
The $48.8 million of net cash provided by financing activities was primarily related to net proceeds of $53.0 million from our initial public offering. 80 Table of Contents Contractual Obligations The following table summarizes our contractual obligations as of December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less ​ ​ ​ ​ ​ ​ ​ More ​ ​ ​ ​ ​ than ​ ​ ​ ​ ​ ​ ​ than ​ ​ Total ​ 1 Year ​ 1 - 3 Years ​ 3 - 5 Years ​ 5 Years ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease commitments $ 29,803 $ 9,006 $ 10,559 $ 7,054 $ 3,184 Severance pay obligations (1) ​ 2,254 ​ — ​ — ​ — ​ — Total contractual obligations ​ $ 32,057 ​ $ 9,006 ​ $ 10,559 ​ $ 7,054 ​ $ 3,184 (1) Severance pay obligations to our Israeli employees, as required under Israeli labor law, are payable only upon termination, retirement or death of the respective employee.
Taxes on Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2022 ​ 2021 ​ $ Change ​ % Change ​ ​ (in thousands) Taxes on income $ 7,184 $ 4,715 $ 2,469 52.4 % ​ Taxes on income increased by $2.5 million, or 52.4%, for the year ended December 31, 2022 compared to the year ended December 31, 2021.
Taxes on Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ $ Change ​ % Change ​ ​ (in thousands) Taxes on Income $ 26,415 $ 20,067 $ 6,348 31.6 % ​ Taxes on income increased by $6.3 million, or 31.6%, for the year ended December 31, 2024, compared to the year ended December 31, 2023.
Cost of Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2022 ​ 2021 ​ $ Change ​ % Change ​ ​ (in thousands) Cost of revenue $ 106,470 $ 69,374 $ 37,096 53.5 % ​ Cost of revenue increased by $37.1 million, or 53.5%, for the year ended December 31, 2022 compared to the year ended December 31, 2021.
Cost of Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ $ Change ​ % Change ​ ​ (in thousands) Cost of revenue $ 178,718 $ 150,456 $ 28,262 18.8 % ​ Cost of revenue increased by $28.3 million, or 18.8%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
We believe order billings provide insight into trends in our operating results and we use this metric to contemporaneously assess and monitor our operating performance, including marketing performance.
However, going forward, we have decided not to report Order billings as we believe that this measure is no longer an appropriate metric to evaluate trends in our operating results and we no longer use it to contemporaneously assess and monitor our operating performance.
Selling, General and Administrative Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2022 ​ 2021 ​ $ Change ​ % Change ​ ​ (in thousands) Selling, general and administrative expenses $ 190,385 $ 133,669 $ 56,716 42.4 % ​ 85 Table of Contents Selling, general and administrative expenses increased by $56.7 million, or 42.4%, for the year ended December 31, 2022 compared to the year ended December 31, 2021.
Selling, General and Administrative Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ $ Change ​ % Change ​ ​ (in thousands) Selling, general, and administrative expenses $ 352,722 $ 283,911 $ 68,811 24.2 % ​ Selling, general and administrative expenses increased by $68.8 million, or 24.2%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Off-Balance Sheet Obligations As of December 31, 2023, we had not entered into any off-balance sheet arrangements. Capital Expenditures See the section titled “Item 4.A. Information on the Company—History and Development of the Company—Capital Expenditures.” C.
Off-Balance Sheet Obligations As of December 31, 2024, we had not entered into any off-balance sheet arrangements. Capital Expenditures Our capital expenditures amounted to approximately $3.3 million for the year ended December 31, 2024, approximately $2.1 million for the year ended December 31, 2023 and approximately $2.3 million for the year ended December 31, 2022.
We continue to drive repeat behavior through improvements in data-driven personalization, product recommendations, customer service and engagement, in addition to new products and brand launches that are all informed by customer data. New brand launches are core to our growth strategy and will enable us to unlock the potential for our customers to cross-shop brands.
Through this virtuous cycle we have successfully gained share of our industry while increasing our share of customer wallet. We continue to drive repeat behavior through strong customer satisfaction, improvements in data-driven personalization, product recommendations, customer service and engagement, in addition to new products and brand launches.
Financial Expenses (Income), Net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2022 ​ 2021 ​ $ Change ​ % Change ​ ​ (in thousands) Financial expenses (income), net $ (1,247) $ 877 $ (2,124) 242.2 % ​ Financial expenses (income), net decreased by $2.1 million for the year ended December 31, 2022 compared to the year ended December 31, 2021.
Investing Activities Net cash provided by investing activities for the year ended December 31, 2024 was $1.4 million, compared to $140.0 million used in investing activities for the year ended December 31, 2023.
The $48.8 million of net cash provided by financing activities was primarily related to net proceeds of $53.0 million from our initial public offering. 90 Table of Contents Net cash used in financing activities decreased to $0.2 million for the year ended December 31, 2022, compared to $0.3 million used in financing activities for the year ended December 31, 2021, primarily as a result of repayment of loans and borrowings and deferred issuance costs offset by proceeds from issuance of securities and exercise of options.
The $127.3 million of net cash used in financing activities was primarily related to $147.3 million purchase of treasury shares, partially offset by $19.0 million proceeds from exercise of options.
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As of December 31, 2023, ODDITY registered approximately 50 million unique users attributed to our brands. From that user base, we have collected over 2 billion unique data points that power every aspect of our business.
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Key Information—Risk Factors” and “Special Note Regarding Forward-Looking Statements.” Company Overview We are a consumer tech platform that is built to transform the global beauty and wellness market.
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We invest strategically in performance marketing, such as paid search and product listing advertisements, paid social media advertisements, search engine optimization, and personalized email, compounded with strong brand awareness driven largely through word of mouth. In addition to acquiring customers through paid sources, our consumer tech platform is designed to drive high levels of platform engagement.
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Our technology innovations, world-class physical product range, and compelling brands built to win online have enabled our accelerated global growth by delivering consumers what we believe to be a superior product and experience. Our platform supports a strong financial model that delivers a rare combination of scale, growth, and profitability.
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Our success is impacted not only by our ability to use data to convert users to customers, but also by our ability to retain our customers and drive repeat purchases.
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Our net revenue increased to $647 million in 2024 from $509 million and $325 million in 2023 and 2022. We achieved net income of $101.5 million, $58.5 million, and $21.7 million in 2024, 2023, and 2022 respectively. We achieved Adjusted EBITDA of $150.4 million in 2024 from $107.3 million and $39.5 million in 2023 and 2022.
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Each of these initiatives is designed to increase the loyalty of our users. Expanding Our Portfolio of Brands The ODDITY platform was built to support a portfolio of beauty and wellness brands. Homegrown brand launches via our New Ventures brand incubator are key components of our portfolio expansion strategy, with a new brand launched regularly.
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Since our initial public offering in 2023 we have committed to a long-term financial algorithm that targets 20% annual revenue growth and 20% Adjusted EBITDA margin. We exceeded these targets every year as a public company, including 2024 and 2023. A.
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We anticipate a meaningful portion of our revenue in the coming years will be from future brand launches that will seek to disrupt markets in the beauty and wellness space that have been historically underpenetrated online. SpoiledChild’s launch in 2022 exemplifies our in-house R&D capabilities to create a new brand from start to launch in just 18 months.
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Key Information—Risk Factors.” Large and Attractive Addressable Market We operate in the highly attractive over $600 billion global beauty and wellness market as defined by the global beauty, personal care and dietary supplements market per Euromonitor, which is characterized by its large size, secular tailwinds, high growth, and compelling gross margin profile.
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While we aim to launch a new brand regularly, it takes months to years of market research and extensive product testing before we can commercialize new products and brands. In addition to our homegrown brand launches, we may expand our portfolio reach through selective acquisitions and brand partnerships.
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Our Position at the Forefront of Industry Transformation We see two powerful pillars of disruption in the industry, and have positioned ODDITY to lead on both fronts. First, the consumer shift online, which we expect will emerge as the industry’s largest channel, growing to account for roughly 50% of sales.
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Launching New Product Categories We believe that the launch of new product categories within our existing brands of IL MAKIAGE and SpoiledChild will be a meaningful driver of net revenue growth and repeat purchasing rates.
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Second, the accelerated demand for high performance, effective products that solve consumers’ pain points. The ODDITY Technology and Data Platform Our business model is centered on our in-house technology capabilities, with leading expertise in data science, machine learning, and computer vision.
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ODDITY will not launch a product or a brand unless our rigorous data-driven product and brand development process shows that it is the best we can deliver. 81 Table of Contents Continued Geographic Expansion Our playbook of direct consumer engagement, data insights, custom-built technology products, and exceptional physical beauty and wellness products is applicable across a broad range of geographies.
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We expect our technology roadmap, combined with our user base of approximately 60 million users and our rich, proprietary data sets, will define the future of beauty. We define a user as a visitor on which we have collected at least 50 discrete data points as they engage and interact with our websites.
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Growing our geographic footprint will help grow our brand awareness, allow us to connect with new customers, and drive profitable growth. We intend to continue to invest in our digital business to provide our users with a differentiated global and local customer experience.
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We have additional brands in development, including Brands 3 and 4, which we are building to lead in their respective markets. Successful Product Launches Our data-centric strategy and direct-to-consumer model allow us to create and deliver superior products for our customers. Product innovation across categories has been a key driver of our success.
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We have also invested and will continue to invest in our Kenzza platform, which helps us to efficiently develop and scale our presence in new geographies through a network of local content creators.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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U.S. Sub-Plan to the 2020 Plan The U.S. Sub-Plan to the 2020 Plan (the “U.S. Sub-Plan”), was adopted by our shareholders on April 1, 2020. The U.S.
Sub-Plan to the 2020 Plan The U.S. Sub-Plan to the 2020 Plan (the “U.S. Sub-Plan”), was adopted by our shareholders on April 1, 2020. The U.S.
Compensation of our directors is governed by the terms of our compensation policy as follows: (i) to the external directors (as defined below), in accordance with the amounts provided in the Companies Regulations (Rules Regarding the Compensation and Expenses of an External Director), 5760-2000, as amended by the Companies Regulations (Relief for Public Companies Whose Securities are Traded on a Stock Exchange Outside of Israel), 5760-2000, as such regulations may be amended from time to time, which compensation may include share-based compensation, and (ii) to the non-employee directors, in accordance with the amounts determined in our compensation policy.
Compensation of our directors is governed by the terms of our compensation policy as follows: (i) to the external directors (as defined below), in accordance with the Companies Regulations (Rules Regarding the Compensation and Expenses of an External Director), 5760-2000, as amended by the Companies Regulations (Relief for Public Companies Whose Securities are Traded on a Stock Exchange Outside of Israel), 5760-2000, as such regulations may be amended from time to time, which compensation may include share-based compensation, and (ii) to the non-employee directors, in accordance with the amounts determined in our compensation policy.
Our compensation policy also provides for compensation to the members of our board of directors as follows: (i) to the external directors, in accordance with the amounts provided in the Companies Regulations (Rules Regarding the Compensation and Expenses of an External Director), 5760-2000, as amended by the Companies Regulations (Relief for Public Companies Whose Securities are Traded on a Stock Exchange Outside of Israel), 5760-2000, as such regulations may be amended from time to time, which compensation may include share-based compensation, and (ii) to the non-employee directors, in accordance with the amounts determined in our compensation policy.
Our compensation policy also provides for compensation to the members of our board of directors as follows: (i) to the external directors, in accordance with the Companies Regulations (Rules Regarding the Compensation and Expenses of an External Director), 5760-2000, as amended by the Companies Regulations (Relief for Public Companies Whose Securities are Traded on a Stock Exchange Outside of Israel), 5760-2000, as such regulations may be amended from time to time, which compensation may include share-based compensation, and (ii) to the non-employee directors, in accordance with the amounts determined in our compensation policy.
The compensation policy must furthermore consider the following additional factors: ● the education, skills, experience, expertise and accomplishments of the relevant office holder; 96 Table of Contents ● the office holder’s position and responsibilities; ● prior compensation agreements with the office holder; ● the ratio between the cost of the terms of employment of an office holder and the cost of the employment of other employees of the company, including employees employed through contractors who provide services to the company, in particular the ratio between such cost to the average and median salary of such employees of the company, as well as the impact of disparities between them on the work relationships in the company; ● if the terms of employment include variable components: the possibility of reducing variable components at the discretion of the board of directors and the possibility of setting a limit on the value of non-cash variable equity-based components; and ● if the terms of employment include severance compensation: the term of employment or office of the office holder, the terms of the office holder’s compensation during such period, the company’s performance during such period, the office holder’s individual contribution to the achievement of the company goals, and the maximization of its profits and the circumstances under which he or she is leaving the company.
The compensation policy must furthermore consider the following additional factors: ● the education, skills, experience, expertise and accomplishments of the relevant office holder; ● the office holder’s position and responsibilities; ● prior compensation agreements with the office holder; ● the ratio between the cost of the terms of employment of an office holder and the cost of the employment of other employees of the company, including employees employed through contractors who provide services to the company, in particular the ratio between such cost to the average and median salary of such employees of the company, as well as the impact of disparities between them on the work relationships in the company; ● if the terms of employment include variable components: the possibility of reducing variable components at the discretion of the board of directors and the possibility of setting a limit on the value of non-cash variable equity-based components; and 86 Table of Contents ● if the terms of employment include severance compensation: the term of employment or office of the office holder, the terms of the office holder’s compensation during such period, the company’s performance during such period, the office holder’s individual contribution to the achievement of the company goals, and the maximization of its profits and the circumstances under which he or she is leaving the company.
Price also served in the Intelligence Directorate of the Israeli Defense Forces from October 1995 to December 2016. Mr. Price holds an M.Sc. in Electrical Engineering from Tel Aviv University and a Master in Public Administration from Harvard University. Non-Employee Directors Michael Farello has served as a member of our board of directors since June 2017. Mr.
Price also served in the Intelligence Directorate of the Israeli Defense Forces from October 1995 to December 2016. Mr. Price holds an M.Sc. in Electrical Engineering from Tel Aviv University and an M.A. in Public Administration from Harvard University. Non-Employee Directors Michael Farello has served as a member of our board of directors since June 2017. Mr.
Covered Executives The following is a summary of the salary expenses and social benefit costs of our five most highly compensated executive officers in 2023 (the “Covered Executives”). All amounts reported reflect the cost to the Company as recognized in our financial statements for the year ended December 31, 2023. ● Mr. Oran Holtzman, Co-Founder and Chief Executive Officer.
Covered Executives The following is a summary of the salary expenses and social benefit costs of our five most highly compensated executive officers in 2024 (the “Covered Executives”). All amounts reported reflect the cost to the Company as recognized in our financial statements for the year ended December 31, 2024. ● Mr. Oran Holtzman, Co-Founder and Chief Executive Officer.
Audit Committee Role Our board of directors has adopted an audit committee charter setting forth the responsibilities of the audit committee, which are consistent with the Companies Law, the SEC rules and the corporate governance rules of Nasdaq and include: ● retaining and terminating our independent auditors, subject to ratification by the board of directors, and in the case of retention, subject to ratification by our shareholders; ● pre-approving audit and non-audit services to be provided by the independent auditors and related fees and terms; ● overseeing the accounting and financial reporting processes of the Company and audits of our financial statements, the effectiveness of our internal control over financial reporting, and making such reports as may be required of an audit committee under the rules and regulations promulgated under the Exchange Act; 112 Table of Contents ● reviewing with management and our independent auditor our annual and quarterly financial statements prior to publication or filing (or submission, as the case may be) to the SEC; ● recommending to the board of directors the retention and termination of the internal auditor and the internal auditor’s engagement fees and terms, in accordance with the Companies Law, approving the yearly or periodic work plan proposed by the internal auditor and examining whether the internal auditor was afforded all required resources to perform its role; ● reviewing with our general counsel and/or external counsel, as deemed necessary, legal, and regulatory matters that could have a material impact on the financial statements; ● identifying irregularities in our business administration by, among other things, consulting with the internal auditor or with the independent auditor, and suggesting corrective measures to the board of directors; ● reviewing policies and procedures with respect to transactions between us and officers and directors (other than transactions related to the compensation or terms of service of the officers and directors), or affiliates of officers or directors, or transactions that are not in the ordinary course of our business, and deciding whether to approve such acts and transactions if so required under the Companies Law; and ● establishing procedures for the handling of employees’ complaints as to the management of our business and the protection to be provided to such employees.
Audit Committee Role Our board of directors has adopted an audit committee charter setting forth the responsibilities of the audit committee, which are consistent with the Companies Law, the SEC rules and the corporate governance rules of Nasdaq and include: ● retaining and terminating our independent auditors, subject to ratification by the board of directors, and in the case of retention, subject to ratification by our shareholders; ● pre-approving audit and non-audit services to be provided by the independent auditors and related fees and terms; ● overseeing the accounting and financial reporting processes of the Company and audits of our financial statements, the effectiveness of our internal control over financial reporting, and making such reports as may be required of an audit committee under the rules and regulations promulgated under the Exchange Act; ● reviewing with management and our independent auditor our annual and quarterly financial statements prior to publication or filing (or submission, as the case may be) to the SEC; ● recommending to the board of directors the retention and termination of the internal auditor and the internal auditor’s engagement fees and terms, in accordance with the Companies Law, approving the yearly or periodic work plan proposed by the internal auditor and examining whether the internal auditor was afforded all required resources to perform its role; ● reviewing with our general counsel and/or external counsel, as deemed necessary, legal, and regulatory matters that could have a material impact on the financial statements; ● identifying irregularities in our business administration by, among other things, consulting with the internal auditor or with the independent auditor, and suggesting corrective measures to the board of directors; ● reviewing policies and procedures with respect to transactions between us and officers and directors (other than transactions related to the compensation or terms of service of the officers and directors), or affiliates of officers or directors, or transactions that are not in the ordinary course of our business, and deciding whether to approve such acts and transactions if so required under the Companies Law; and ● establishing procedures for the handling of employees’ complaints as to the management of our business and the protection to be provided to such employees. 102 Table of Contents Internal Auditor Under the Companies Law, the board of directors of a public company is required to appoint an internal auditor based on the recommendation of the audit committee.
The ESPP consists of two components: a Section 423 component and a non-Section 423 component. As of December 31, 2023, no offerings have been made under the ESPP. We do not intend to make any offerings under the ESPP at this time.
The ESPP consists of two components: a Section 423 component and a non-Section 423 component. As of December 31, 2024, no offerings have been made under the ESPP. We do not intend to make any offerings under the ESPP at this time.
We have not experienced any work stoppages, and we believe that our employee relations are strong. E. Share Ownership Ownership of our ordinary shares by our directors and executive officers is set forth in the section titled “Item 7.A. Major Shareholders and Related Party Transactions—Major Shareholders” of this Annual Report. F.
We have not experienced any work stoppages, and we believe that our employee relations are strong. E. Share Ownership Ownership of our ordinary shares by our directors and executive officers is set forth in the section titled “Item 7.A. Major Shareholders and Related Party Transactions—Major Shareholders” of this Annual Report. 106 Table of Contents F.
The total compensation granted to a non-employee director during any calendar year may not exceed $750,000, unless otherwise determined by the plan administrator. 103 Table of Contents Awards The 2023 Plan provides for the grant of share options, including ISOs, restricted shares, RSUs, share appreciation rights (“SARs”), other share-based awards and cash awards.
The total compensation granted to a non-employee director during any calendar year may not exceed $750,000, unless otherwise determined by the plan administrator. Awards The 2023 Plan provides for the grant of share options, including ISOs, restricted shares, RSUs, share appreciation rights (“SARs”), other share-based awards and cash awards.
For the purpose of determining the holding percentage stated above, two or more shareholders who have a personal interest in a transaction that is brought for the company’s approval are deemed as joint holders. The initial term of an external director is three years.
For the purpose of determining the holding percentage stated above, two or more shareholders who have a personal interest in a transaction that is brought for the company’s approval are deemed as joint holders. 98 Table of Contents The initial term of an external director is three years.
Individual award agreements may provide for additional accelerated vesting and payment provisions. 104 Table of Contents Clawback Provisions, Transferability and Participant Payments All awards are subject to the provisions of the clawback policy implemented by us to the extent set forth in such clawback policy and/or in the applicable award agreement.
Individual award agreements may provide for additional accelerated vesting and payment provisions. Clawback Provisions, Transferability and Participant Payments All awards are subject to the provisions of the clawback policy implemented by us to the extent set forth in such clawback policy and/or in the applicable award agreement.
Pursuant to this non-employee director compensation policy, each eligible non-employee director and external director will receive a mixture of annual retainer fee and a long-term equity award. 95 Table of Contents Pursuant to this policy, each eligible non-employee director and external director will receive an annual cash retainer of $50,000 that will be paid quarterly in arrears.
Pursuant to this non-employee director compensation policy, each eligible non-employee director and external director will receive a mixture of annual retainer fee and a long-term equity award. Pursuant to this policy, each eligible non-employee director and external director will receive an annual cash retainer of $50,000 that will be paid quarterly in arrears.
There is no pending litigation or proceeding against any of our office holders as to which indemnification is being sought, nor are we aware of any pending or threatened litigation that may result in claims for indemnification by any office holder. 116 Table of Contents D.
There is no pending litigation or proceeding against any of our office holders as to which indemnification is being sought, nor are we aware of any pending or threatened litigation that may result in claims for indemnification by any office holder. D.
If an award holder breaches any restrictive covenants set forth in an award agreement or any other agreement during or after the termination of engagement, the award holder will forfeit or repay back: (i) any and all outstanding awards, including vested or exercisable awards, (ii) any shares issued within the 12-month period immediately preceding the termination and thereafter (less any exercise price paid for such shares) and (iii) the profit realized from the exercise and sale of any award or share within the 12-month period immediately preceding the termination.
If an award holder breaches any restrictive covenants set forth in an award agreement or any other agreement during or after the termination of engagement, the award holder will forfeit or repay back: (i) any and all outstanding awards, including vested or exercisable awards, (ii) any shares issued within the 12-month period immediately preceding the termination and thereafter (less any exercise price paid for such shares) and (iii) the profit realized from the exercise and sale of any award or share within the 12-month period immediately preceding the termination. 91 Table of Contents U.S.
Compensation expenses recorded in 2023 of $0.2 million in salary expenses and social benefits costs. ● Ms. Shiran Holtzman-Erel, Co-Founder and Chief Product Officer. Compensation expenses recorded in 2023 of $0.2 million in salary expenses and social benefits costs. ● Ms. Lindsay Drucker Mann, Global Chief Financial Officer.
Compensation expenses recorded in 2024 of $0.2 million in salary expenses and social benefits costs. ● Ms. Shiran Holtzman-Erel, Co-Founder and Chief Product Officer. Compensation expenses recorded in 2024 of $0.3 million in salary expenses and social benefits costs. ● Ms. Lindsay Drucker Mann, Global Chief Financial Officer.
Committees of the Board The board of directors operates through four committees: the Audit Committee, the Compensation Committee, the Nominating, Governance and Sustainability Committee and the Incentive Awards Committee. 111 Table of Contents Audit Committee Companies Law Requirements Under the Companies Law, the board of directors of a public company must appoint an audit committee.
Committees of the Board The board of directors operates through four committees: the Audit Committee, the Compensation Committee, the Nominating, Governance and Sustainability Committee and the Incentive Awards Committee. Audit Committee Companies Law Requirements Under the Companies Law, the board of directors of a public company must appoint an audit committee.
Listing Requirements Under the corporate governance rules of Nasdaq, we are required to maintain an audit committee consisting of at least three independent directors, each of whom is financially literate and one of whom has accounting or related financial management expertise. Our audit committee currently consists of Lilach Payorski, Ohad Chereshniya and Michael Farello.
Listing Requirements Under the corporate governance rules of Nasdaq, we are required to maintain an audit committee consisting of at least three independent directors, each of whom is financially literate and one of whom has accounting or related financial management expertise. Our audit committee currently consists of Lilach Payorski, Ohad Chereshniya and Yehoshua (Shuki) Nir.
Board Practices and Corporate Governance Corporate Governance Practices As an Israeli company, we are subject to various corporate governance requirements under the Companies Law, relating to matters such as external directors, the audit committee, the compensation committee, and an internal auditor. 106 Table of Contents We are a “foreign private issuer” (as such term is defined in Rule 405 under the Securities Act).
C. Board Practices and Corporate Governance Corporate Governance Practices As an Israeli company, we are subject to various corporate governance requirements under the Companies Law, relating to matters such as external directors, the audit committee, the compensation committee, and an internal auditor. We are a “foreign private issuer” (as such term is defined in Rule 405 under the Securities Act).
As of December 31, 2023, approximately 41% and 59% of our workforce was located in the United States and outside of the United States, respectively, compared to 40% and 60% and 44% and 56% as of December 31, 2022 and 2021, respectively.
As of December 31, 2024, approximately 44% and 56% of this workforce was located in the United States and outside of the United States, respectively, compared to 41% and 59% and 40% and 60% as of December 31, 2023 and 2022, respectively.
A director so appointed will hold office until the next annual general meeting of our shareholders for the class of directors in respect of which the vacancy was created, or in the case of a vacancy due to the number of directors being less than the maximum number of directors stated in our amended and restated articles of association, until the next annual general meeting of our shareholders for the class of directors to which such director has been assigned by our board of directors.
A director so appointed will hold office until the next annual general meeting of our shareholders for the class of directors in respect of which the vacancy was created, or in the case of a vacancy due to the number of directors being less than the maximum number of directors stated in our amended and restated articles of association, until the next annual general meeting of our shareholders for the class of directors to which such director has been assigned by our board of directors. 97 Table of Contents Chairperson of the Board Our amended and restated articles of association provide that the chairperson of the board of directors is appointed by the members of the board of directors.
Employees As of December 31, 2023, we had a corporate workforce of 342 individuals across our organization, compared to 271 individuals and 264 individuals as of December 31, 2022 and 2021, respectively.
Employees As of December 31, 2024, we had a corporate workforce of 489 individuals across our organization, compared to 342 individuals and 271 individuals as of December 31, 2023 and 2022, respectively.
The Companies Law provides that a person is not qualified to be appointed as an external director if (i) the person is a relative of a controlling shareholder of the company, or (ii) that person or his or her relative, partner, employer, another person to whom he or she was directly or indirectly subordinate, or any entity under the person’s control, has or had during the two years preceding the date of appointment as an external director: (a) any affiliation or other disqualifying relationship with the company, with any person or entity controlling the company or a relative of such person, or with any entity controlled by or under common control with the company; or (b) in the case of a company with no controlling shareholder or any shareholder holding 25% or more of its voting rights, had at the date of appointment as an external director any affiliation or other disqualifying relationship with a person then serving as chairman of the board or chief executive officer, a holder of 5% or more of the issued share capital or voting power in the company or the most senior financial officer.
The Companies Law provides that a person is not qualified to be appointed as an external director if (i) the person is a relative of a controlling shareholder of the company, or (ii) that person or his or her relative, partner, employer, another person to whom he or she was directly or indirectly subordinate, or any entity under the person’s control, has or had during the two years preceding the date of appointment as an external director: (a) any affiliation or other disqualifying relationship with the company, with any person or entity controlling the company or a relative of such person, or with any entity controlled by or under common control with the company; or (b) in the case of a company with no controlling shareholder or any shareholder holding 25% or more of its voting rights, had at the date of appointment as an external director any affiliation or other disqualifying relationship with a person then serving as chairman of the board or chief executive officer, a holder of 5% or more of the issued share capital or voting power in the company or the most senior financial officer. 99 Table of Contents The term “relative” is defined in the Companies Law as a spouse, sibling, parent, grandparent or descendant, a spouse’s sibling, parent or descendant and the spouse of each of the foregoing persons.
Our directors who are not external directors are divided among the three classes as follows: ● the Class I director is Michael Farello, and his term expires at our annual general meeting of shareholders to be held in 2024; ● the Class II director is Shiran Holtzman-Erel, and her term expires at our annual meeting of shareholders to be held in 2025; and ● the Class III director is Oran Holtzman, and his term expires at our annual meeting of shareholders to be held in 2026.
Our directors who are not external directors are divided among the three classes as follows: ● the Class I directors are Michael Farello and Yehoshua (Shuki) Nir, and their terms expire at our annual general meeting of shareholders to be held in 2027; ● the Class II director is Shiran Holtzman-Erel, and her term expires at our annual meeting of shareholders to be held in 2025; and ● the Class III director is Oran Holtzman, and his term expires at our annual meeting of shareholders to be held in 2026.
Lilach Payorski and Ohad Chereshniya serve as our external directors and each have a term of three years from the date of their appointment. Lilach Payorski was appointed to our board of directors on March 1, 2022 and Ohad Chereshniya was appointed to our board of directors on July 18, 2023.
Lilach Payorski and Ohad Chereshniya serve as our external directors and each have a term of three years. Lilach Payorski was initially appointed to our board of directors on March 1, 2022 and Ohad Chereshniya was initially appointed to our board of directors on July 18, 2023.
The 2020 Plan enabled us to grant equity-based awards consisting of options to purchase our Class A ordinary shares, restricted shares and RSUs, all of which are referred to as “awards.” As of December 31, 2023, options to purchase 11,826,547 Class A ordinary shares were outstanding under the 2020 Plan.
The 2020 Plan enabled us to grant equity-based awards consisting of options to purchase our Class A ordinary shares, restricted shares and RSUs, all of which are referred to as “awards.” As of December 31, 2024, options to purchase 9,154,612 Class A ordinary shares were outstanding under the 2020 Plan.
Our compensation policy is filed as an exhibit to this Annual Report. 98 Table of Contents Compensation of Our Chief Executive Officer Under the Companies Law, the compensation of a public company’s chief executive officer is required to be approved by: (i) the company’s compensation committee, (ii) the company’s board of directors and (iii) the company’s shareholders (by a special majority vote as discussed above with respect to the approval of the compensation policy).
Compensation of Our Chief Executive Officer Under the Companies Law, the compensation of a public company’s chief executive officer is required to be approved by: (i) the company’s compensation committee, (ii) the company’s board of directors and (iii) the company’s shareholders (by a special majority vote as discussed above with respect to the approval of the compensation policy).
The trustee may not release or sell any shares allocated or issued upon the grant, vesting or exercise of a Trustee 102 Award unless we, or, if applicable, our Israeli subsidiary and the trustee are satisfied that the full amounts of any tax due have been paid or will be paid. 105 Table of Contents Terms and Conditions The terms and conditions and treatment of awards may vary for each Israeli Participant.
The trustee may not release or sell any shares allocated or issued upon the grant, vesting or exercise of a Trustee 102 Award unless we, or, if applicable, our Israeli subsidiary and the trustee are satisfied that the full amounts of any tax due have been paid or will be paid.
Our board of directors has adopted a nominating, governance and sustainability committee charter setting forth the responsibilities of the committee, which include: ● overseeing and assisting our board of directors in reviewing and recommending nominees for election as directors; ● assessing the performance of the members of our board of directors; and ● establishing and maintaining effective corporate governance policies and practices, including, but not limited to, developing and recommending to our board of directors a set of corporate governance guidelines applicable to our business. 114 Table of Contents Incentive Awards Committee Our incentive awards committee consists of Oran Holtzman and Ohad Chereshniya, with Ohad Chereshniya serving as chair.
Nominating, Governance and Sustainability Committee Role Our board of directors has adopted a nominating, governance and sustainability committee charter setting forth the responsibilities of the committee, which include: ● overseeing and assisting our board of directors in reviewing and recommending nominees for election as directors; ● assessing the performance of the members of our board of directors; and ● establishing and maintaining effective corporate governance policies and practices, including, but not limited to, developing and recommending to our board of directors a set of corporate governance guidelines applicable to our business.
However, according to regulations promulgated under the Companies Law, an amendment to an existing arrangement with an office holder (who is not a director) who is subordinate to the Chief Executive Officer will not require the approval of the compensation committee, if (i) the amendment is approved by the Chief Executive Officer, (ii) the company’s compensation policy provides that a non-material amendment to the terms of service of an office holder (other than the Chief Executive Officer) may be approved by the Chief Executive Officer and (iii) the engagement terms are consistent with the company’s compensation policy. 99 Table of Contents Aggregate Compensation of Executive Officers and Directors The aggregate compensation recorded by us and our subsidiaries to our directors and executive officers identified in the section titled “Item 6.A.
However, according to regulations promulgated under the Companies Law, an amendment to an existing arrangement with an office holder (who is not a director) who is subordinate to the Chief Executive Officer will not require the approval of the compensation committee, if (i) the amendment is approved by the Chief Executive Officer, (ii) the company’s compensation policy provides that a non-material amendment to the terms of service of an office holder (other than the Chief Executive Officer) may be approved by the Chief Executive Officer and (iii) the engagement terms are consistent with the company’s compensation policy.
Our board of directors has adopted a compensation committee charter setting forth the responsibilities of the compensation committee, which are consistent with the corporate governance rules of Nasdaq and include among others: ● recommending to our board of directors for its approval of a compensation policy in accordance with the requirements of the Companies Law, incentive-based and equity-based compensation plans (insofar as these relate to office holders in the Company); overseeing the development and implementation of such policies and incentive-based and equity-based compensation plans; and recommending to our board of directors any amendments or modifications to such policies and plans that the committee deems appropriate, including as required under the Companies Law; ● reviewing and approving the employment and engagement terms of our office holders, including granting of stock options and other incentive-based awards and reviewing and approving corporate goals and objectives relevant to the compensation of our executive officers, including evaluating their performance in light of such goals and objectives; and ● approving and exempting certain transactions regarding office holders’ compensation pursuant to the Companies Law.
Compensation Committee Role In accordance with the Companies Law, the roles of the compensation committee are, among others, as follows: ● making recommendations to the board of directors with respect to the approval of the compensation policy for office holders and to make recommendations to the board of directors, once every three years, regarding the approval of the extension of such compensation policy; ● reviewing the implementation of the compensation policy and periodically making recommendations to the board of directors with respect to any amendments or updates of the compensation policy; ● resolving whether or not to approve arrangements with office holders; and ● exempting, under certain circumstances, transactions with our Chief Executive Officer from the approval of our shareholders. 103 Table of Contents Our board of directors has adopted a compensation committee charter setting forth the responsibilities of the compensation committee, which are consistent with the corporate governance rules of Nasdaq and include among others: ● recommending to our board of directors for its approval of a compensation policy in accordance with the requirements of the Companies Law, incentive-based and equity-based compensation plans (insofar as these relate to office holders in the Company); overseeing the development and implementation of such policies and incentive-based and equity-based compensation plans; and recommending to our board of directors any amendments or modifications to such policies and plans that the committee deems appropriate, including as required under the Companies Law; ● reviewing and approving the employment and engagement terms of our office holders, including granting of stock options and other incentive-based awards and reviewing and approving corporate goals and objectives relevant to the compensation of our executive officers, including evaluating their performance in light of such goals and objectives; and ● approving and exempting certain transactions regarding office holders’ compensation pursuant to the Companies Law.
The definition of “external director” under the Companies Law and the definition of “independent director” under the Nasdaq rules overlap to some degree. However, since the definitions are not identical, it is possible for a director to qualify as one and not as the other.
The definition of “external director” under the Companies Law and the definition of “independent director” under the Nasdaq rules overlap to some degree. However, since the definitions are not identical, it is possible for a director to qualify as one and not as the other. As noted above, Lilach Payorski and Ohad Chereshniya serve as our external directors.
Limitation on Awards and Shares Available The aggregate number of shares available for issuance under the 2023 Plan is equal to the sum of (1) 4,524,000 Class A ordinary shares plus (2) an annual increase on January 1 of each calendar year beginning in 2024 and ending on and including 2033, by an amount equal to the lesser of (a) 5% of the shares outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as determined by our board of directors.
No award may be granted under the 2023 Plan after the tenth anniversary of the earlier of (i) the date the board of directors adopted the 2023 Plan or (ii) the date our shareholders approved the 2023 Plan. 92 Table of Contents Limitation on Awards and Shares Available The aggregate number of shares available for issuance under the 2023 Plan is equal to the sum of (1) 4,524,000 Class A ordinary shares plus (2) an annual increase on January 1 of each calendar year beginning in 2024 and ending on and including 2033, by an amount equal to the lesser of (a) 5% of the shares outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as determined by our board of directors.
An Israeli company may insure an office holder against the following liabilities incurred for acts performed as an office holder if and to the extent provided in the company’s articles of association: ● a breach of the duty of loyalty to the company, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; ● a breach of the duty of care to the company or to a third party, to the extent such breach arises out of the negligent conduct of the office holder; 115 Table of Contents ● a financial liability imposed on the office holder in favor of a third party; ● a financial liability imposed on the office holder in favor of a third party harmed by a breach in an administrative proceeding; and ● expenses, including reasonable litigation expenses and legal fees, incurred by the office holder as a result of an administrative proceeding instituted against him or her, pursuant to certain provisions of the Israeli Securities Law.
An Israeli company may insure an office holder against the following liabilities incurred for acts performed as an office holder if and to the extent provided in the company’s articles of association: ● a breach of the duty of loyalty to the company, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; ● a breach of the duty of care to the company or to a third party, to the extent such breach arises out of the negligent conduct of the office holder; ● a financial liability imposed on the office holder in favor of a third party; ● a financial liability imposed on the office holder in favor of a third party harmed by a breach in an administrative proceeding; and ● expenses, including reasonable litigation expenses and legal fees, incurred by the office holder as a result of an administrative proceeding instituted against him or her, pursuant to certain provisions of the Israeli Securities Law. 105 Table of Contents An Israeli company may not indemnify, exculpate or insure an office holder against any of the following: ● a breach of the duty of loyalty, except to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; ● a breach of the duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder; ● an act or omission committed with intent to derive illegal personal benefit; or ● a civil or criminal fine, monetary sanction or forfeit levied against the office holder.
Compensation expenses recorded in 2023 of $0.5 million in salary expenses and social benefits costs.
Compensation expenses recorded in 2024 of $0.2 million in salary expenses and social benefits costs.
Executive Officers and Directors Executive Officers and Directors The following table sets forth the name, age and position of each of our executive officers and members of our board of directors as of the date of this Annual Report: ​ ​ ​ ​ ​ Name Age Position Executive Officers Oran Holtzman 40 Co-Founder, Chief Executive Officer and Director Shiran Holtzman-Erel 36 Co-Founder, Chief Product Officer and Director Lindsay Drucker Mann 43 Global Chief Financial Officer Jonathan Truppman 38 Chief Legal Officer Niv Price 50 Chief Technology Officer Non-Employee Directors Michael Farello 59 Director Lilach Payorski 50 Director Ohad Chereshniya 44 Director ​ 93 Table of Contents Executive Officers Oran Holtzman is our co-founder and has served as our Chief Executive Officer and as a member of our board of directors since our inception.
Executive Officers and Directors Executive Officers and Directors The following table sets forth the name, age and position of each of our executive officers and members of our board of directors as of the date of this Annual Report: ​ ​ ​ ​ ​ Name Age Position Executive Officers Oran Holtzman 41 Co-Founder, Chief Executive Officer and Director Shiran Holtzman-Erel 37 Co-Founder, Chief Product Officer and Director Lindsay Drucker Mann 44 Global Chief Financial Officer Niv Price 51 Chief Technology Officer Non-Employee Directors ​ ​ Michael Farello 60 Director Lilach Payorski 51 Director Ohad Chereshniya 45 Director Yehoshua (Shuki) Nir 55 Director ​ 83 Table of Contents Executive Officers Oran Holtzman is our co-founder and has served as our Chief Executive Officer and as a member of our board of directors since our inception.
Our Chief Executive Officer (referred to as a “general manager” under the Companies Law) is responsible for our day-to-day management. Our Chief Executive Officer is appointed by, and serves at the discretion of, our board of directors, subject to the terms of the employment agreement that we have entered into with him.
Our Chief Executive Officer is appointed by, and serves at the discretion of, our board of directors, subject to the terms of the employment agreement that we have entered into with him.
In addition, according to the Companies Law, with respect to the compensation of an office holder who is also considered a controlling shareholder (or such controlling shareholder’s relative), approval is also required by (i) the company’s compensation committee, (ii) the company’s board of directors and (iii) the company’s shareholders (by a special majority vote as discussed above with respect to the approval of the compensation policy).
In the event that the chief executive officer candidate also serves as a member of the board of directors, his or her compensation terms as the chief executive officer will be approved in accordance with the rules applicable to approval of compensation of directors. 88 Table of Contents In addition, according to the Companies Law, with respect to the compensation of an office holder who is also considered a controlling shareholder (or such controlling shareholder’s relative), approval is also required by (i) the company’s compensation committee, (ii) the company’s board of directors and (iii) the company’s shareholders (by a special majority vote as discussed above with respect to the approval of the compensation policy).
Our board of directors has determined that Lilach Payorski and Ohad Chereshniya are “independent” as such term is defined in Rule 10A-3(b)(1) under the Exchange Act, which is different from the general test for independence of board and committee members.
Our board of directors has determined that each member of our audit committee is “independent” as such term is defined in Rule 10A-3(b)(1) under the Exchange Act, which is different from the general test for independence of board and committee members, as well as being independent under the corporate governance rules of Nasdaq.
Incentive stock options (“ISOs”) may be granted only to employees, and any person who does not qualify as an employee may be granted only a non-qualified stock option (“NSOs”). Awards granted pursuant to the U.S.
Incentive stock options (“ISOs”) may be granted only to employees, and any person who does not qualify as an employee may be granted only a non-qualified stock option (“NSOs”). Awards granted pursuant to the U.S. Sub-Plan are exempt from or comply with Section 409A of the Internal Revenue Code.
The Election does not prevent us from granting simultaneously awards pursuant to Section 102(c) of the Ordinance which are not held in trust by a trustee. Awards granted to Unapproved Israeli Participants are not subject to the trustee arrangement, and are instead subject to Section 3(i) or 2 of the Ordinance.
The Election does not prevent us from granting simultaneously awards pursuant to Section 102(c) of the Ordinance which are not held in trust by a trustee.
Rule 10A-3 of the Exchange Act and Nasdaq rules require that our audit committee have at least one independent member upon the listing of our Class A ordinary shares, have a majority of independent members within 90 days of the date of our initial public offering and be composed entirely of independent members within one year of the date of our initial public offering.
Rule 10A-3 of the Exchange Act and Nasdaq rules require that our audit committee be composed entirely of independent members within one year of the date of our initial public offering.
Sub-Plan are exempt from or comply with Section 409A of the Internal Revenue Code. 102 Table of Contents The maximum aggregate number of shares that may be issued under the 2020 Plan pursuant to the exercise of ISOs may not exceed 2,883,701 Class A ordinary shares (subject to adjustment as provided in the 2020 Plan).
The maximum aggregate number of shares that may be issued under the 2020 Plan pursuant to the exercise of ISOs may not exceed 2,883,701 Class A ordinary shares (subject to adjustment as provided in the 2020 Plan).
In the event of certain transactions or events affecting our shares, such as any share dividend or other distribution, reorganization, merger, consolidation, or other corporate transaction, the plan administrator will make equitable adjustments to the ESPP and outstanding rights.
A participant is not permitted to transfer rights granted under the ESPP other than by will, the laws of descent and distribution or as otherwise provided under the ESPP. 95 Table of Contents In the event of certain transactions or events affecting our shares, such as any share dividend or other distribution, reorganization, merger, consolidation, or other corporate transaction, the plan administrator will make equitable adjustments to the ESPP and outstanding rights.
Nominating, Governance and Sustainability Committee Our nominating, governance and sustainability committee consists of Ohad Chereshniya, Lilach Payorski and Michael Farello, with Ohad Chereshniya serving as chair. Our board of directors has determined that each member of our nominating, governance and sustainability committee is independent under the corporate governance rules of Nasdaq.
Our compensation committee consists of Ohad Chereshniya, Lilach Payorski and Michael Farello, with Ohad Chereshniya serving as chair. Our board of directors has determined that Ohad Chereshniya and Lilach Payorski are each independent under the corporate governance rules of Nasdaq, including the additional independence requirements applicable to the members of a compensation committee.
Pursuant to a resolution of our board of directors, the incentive awards committee has been delegated with the authority, subject to applicable law, to: ● grant awards under the 2023 Plan subject to criteria determined by the board of directors and to approve the issuance of ordinary shares as a result of the exercise, vesting, settlement or conversion (as applicable) of such awards; and ● administer the 2023 Plan.
Pursuant to a resolution of our board of directors, the incentive awards committee has been delegated with the authority, subject to applicable law, to: ● grant awards under the 2023 Plan subject to criteria determined by the board of directors and to approve the issuance of ordinary shares as a result of the exercise, vesting, settlement or conversion (as applicable) of such awards; and ● administer the 2023 Plan. 104 Table of Contents Exculpation, Insurance, and Indemnification of Office Holders Under the Companies Law, a company may not exculpate an office holder from liability for a breach of the duty of loyalty.
We did not have any amounts set aside or accrued to provide pension, severance, retirement or similar benefits or expenses to our directors and executive officers as of December 31, 2023.
We did not have any amounts set aside or accrued to provide pension, severance, retirement or similar benefits or expenses to our directors and executive officers as of December 31, 2024. During the year ended December 31, 2024, our directors and executive officers were granted 361,233 restricted share units under our 2023 Incentive Award Plan.
Our shareholders subsequently ratified the appointment of Lilach Payorski and Ohad Chereshniya as our external directors on September 28, 2023. 107 Table of Contents Our directors, aside from our external directors, will be appointed by a simple majority vote of holders of our ordinary shares, participating and voting at an annual general meeting of our shareholders (excluding abstentions).
Our directors, aside from our external directors, will be appointed by a simple majority vote of holders of our ordinary shares, participating and voting at an annual general meeting of our shareholders (excluding abstentions).
The 2020 Plan was replaced by the 2023 Plan on September 28, 2023, but awards outstanding as of that date will continue in full force and in accordance with the terms under which they were granted.
The 2020 Plan was replaced by the 2023 Plan on September 28, 2023, but awards outstanding as of that date will continue in full force and in accordance with the terms under which they were granted. 90 Table of Contents The below summary of the 2020 Plan material terms is qualified in its entirety by reference to the 2020 Plan, which is filed as an exhibit to this Annual Report.
Although none of the performance conditions related to the 2023 option award grants were met, in connection with outstanding awards to our Covered Executives, we recorded equity-based compensation expenses in our financial statements for the year ended December 31, 2023 for Mr. Oran Holtzman, Ms. Shiran Holtzman-Erel, Ms. Lindsay Drucker Mann, Mr. Dmitri Kaplun and Mr.
In connection with outstanding awards to our Covered Executives, we recorded equity-based compensation expenses in our financial statements for the year ended December 31, 2024 for Mr. Oran Holtzman, Ms. Shiran Holtzman-Erel, Ms. Lindsay Drucker Mann, Mr. Dmitri Kaplun and Mr. Niv Price of $2.7 million, $2.4 million, $2.0 million, $3.6 million and $0.6 million, respectively.
On the other hand, our compensation policy includes measures designed to reduce the executive officer’s incentives to take excessive risks, such as limits on the value of cash bonuses and minimum vesting periods for equity-based compensation. 97 Table of Contents Our compensation policy also addresses our executive officers’ individual characteristics (such as their respective position, education, scope of responsibilities and contribution to the attainment of our goals) as the basis for compensation variation among our executive officers and considers the internal ratios between compensation of our executive officers and directors and other employees.
Our compensation policy also addresses our executive officers’ individual characteristics (such as their respective position, education, scope of responsibilities and contribution to the attainment of our goals) as the basis for compensation variation among our executive officers and considers the internal ratios between compensation of our executive officers and directors and other employees.
In addition, when an external director becomes aware that he or she no longer meets the criteria to serve as an external director, he or she must inform the company and the service of such external director is automatically terminated. 109 Table of Contents If an external directorship becomes vacant and there are fewer than two external directors on the board of directors at the time, then the board of directors is required under the Companies Law to call a meeting of the shareholders as soon as practicable to appoint a replacement external director.
If an external directorship becomes vacant and there are fewer than two external directors on the board of directors at the time, then the board of directors is required under the Companies Law to call a meeting of the shareholders as soon as practicable to appoint a replacement external director.
However, if at least one of our unaffiliated directors (i) meets the independence requirements under the Exchange Act, (ii) meets the independence requirements of Nasdaq rules for membership on the audit committee and (iii) has accounting and financial expertise as defined under the Companies Law, then neither of our external directors is required to possess accounting and financial expertise as long as each possesses the requisite professional qualifications.
However, if at least one of our unaffiliated directors (i) meets the independence requirements under the Exchange Act, (ii) meets the independence requirements of Nasdaq rules for membership on the audit committee and (iii) has accounting and financial expertise as defined under the Companies Law, then neither of our external directors is required to possess accounting and financial expertise as long as each possesses the requisite professional qualifications. 100 Table of Contents A director with accounting and financial expertise is a director who, due to his or her education, experience and skills, possesses an expertise in, and an understanding of, financial and accounting matters and financial statements, such that he or she is able to understand the financial statements of the company and initiate a discussion about the presentation of financial data.
Trustee 102 Awards The grant of a Trustee 102 Award is subject to compliance with all terms and conditions of Section 102 of the Ordinance, including the execution of an undertaking.
Awards granted to Unapproved Israeli Participants are not subject to the trustee arrangement, and are instead subject to Section 3(i) or 2 of the Ordinance. 94 Table of Contents Trustee 102 Awards The grant of a Trustee 102 Award is subject to compliance with all terms and conditions of Section 102 of the Ordinance, including the execution of an undertaking.
Compensation expenses recorded in 2023 of $0.8 million in salary expenses and social benefits costs. ● Mr. Dmitri Kaplun, Chief Executive Officer, IL Makiage. Compensation expenses recorded in 2023 of $0.7 million in salary expenses and social benefits costs. ● Mr. Jonathan Truppman, Chief Legal Counsel.
Compensation expenses recorded in 2024 of $0.7 million in salary expenses and social benefits costs. 89 Table of Contents ● Mr. Dmitri Kaplun, Chief Executive Officer, IL Makiage. Compensation expenses recorded in 2024 of $0.9 million in salary expenses and social benefits costs. ● Mr, Niv Price, Chief Technology Officer.
Certain Transactions and Adjustments The plan administrator has broad discretion to take action under the 2023 Plan, as well as make adjustments to the terms and conditions of existing and future awards, to prevent the dilution or enlargement of intended benefits and facilitate necessary or desirable changes in the event of certain transactions and events affecting our Class A ordinary shares, such as share dividends, share splits, mergers, consolidations and other corporate transactions.
Dividend equivalents will only be paid out to the extent the underlying award vests, which payments will be made no later than March 15 of the calendar year following the calendar year in which the right to the dividend equivalent payment becomes nonforfeitable, unless otherwise determined by the plan administrator. 93 Table of Contents Certain Transactions and Adjustments The plan administrator has broad discretion to take action under the 2023 Plan, as well as make adjustments to the terms and conditions of existing and future awards, to prevent the dilution or enlargement of intended benefits and facilitate necessary or desirable changes in the event of certain transactions and events affecting our Class A ordinary shares, such as share dividends, share splits, mergers, consolidations and other corporate transactions.
Internal Auditor Under the Companies Law, the board of directors of a public company is required to appoint an internal auditor based on the recommendation of the audit committee. The role of the internal auditor is, among other things, to examine whether the company’s actions comply with applicable law and proper business procedure.
The role of the internal auditor is, among other things, to examine whether the company’s actions comply with applicable law and proper business procedure.
Instead of the 33-1/3% of the issued share capital quorum required under the corporate governance rules of Nasdaq, pursuant to our amended and restated articles of association, and as permitted under the Companies Law, the quorum required for a general meeting of shareholders will consist of at least two shareholders present in person, by proxy or by other voting instrument in accordance with the Companies Law, who hold or represent at least 33-1/3% of the total outstanding voting rights; provided, however, that with respect to any general meeting of shareholders that was convened pursuant to a resolution adopted by the board of directors and which at the time of such general meeting we qualify to use the forms and rules of a “foreign private issuer,” the requisite quorum will consist of two or more shareholders present in person, or by proxy, who hold or represent at least 25% of the total outstanding voting power (and if the meeting is adjourned for a lack of quorum, the quorum for such adjourned meeting will be, subject to certain exceptions, any number of shareholders).
Furthermore, the Companies Law imposes certain independence obligations on its members, but, other than these specific requirements, does not mandate that all members be independent directors, as such term is defined in the Companies Law. ● the requirement under Section 5605(e) of Nasdaq listing rules that director nominees be selected or recommended for selection by either a majority of the independent directors or a nominations committee comprised solely of independent directors; o The Companies Law does not require that a board have a nominations committee so does not mandate that all members of the nominations committee be independent directors, as such term is defined in the Companies Law, except that any board committee authorized to exercise board power must include at least one external director. ● the requirement under Section 5620(c) of Nasdaq listing rules that a quorum for meetings of shareholders consist of at least 33-1/3% of the total outstanding voting rights of our shares. o Pursuant to our amended and restated articles of association, and as permitted under the Companies Law, the quorum required for a general meeting of shareholders consists of at least two shareholders present in person, by proxy or by other voting instrument in accordance with the Companies Law, who hold or represent at least 33-1/3% of the total outstanding voting rights; provided, however, that with respect to any general meeting of shareholders that was convened pursuant to a resolution adopted by the board of directors and if at the time of such general meeting we qualify to use the forms and rules of a “foreign private issuer,” the requisite quorum will consist of two or more shareholders present in person, or by proxy, who hold or represent at least 25% of the total outstanding voting power (and if the meeting is adjourned for a lack of quorum, the quorum for such adjourned meeting will be, subject to certain exceptions, any number of shareholders).
The measurable performance objectives of our Chief Executive Officer will be set and evaluated annually by our compensation committee and board of directors.
To the extent required under applicable law, the actual annual bonus paid to our officers will be approved by our compensation committee and our board of directors. 87 Table of Contents The measurable performance objectives of our Chief Executive Officer will be set and evaluated annually by our compensation committee and board of directors.
This restriction extends for a period of two years with regard to the former external director and his or her spouse or child and for one year with respect to other relatives of the former external director. 110 Table of Contents If at the time at which an external director is appointed all members of the board of directors who are not controlling shareholders or relatives of controlling shareholders of the company are of the same gender, the external director to be appointed must be of the other gender.
If at the time at which an external director is appointed all members of the board of directors who are not controlling shareholders or relatives of controlling shareholders of the company are of the same gender, the external director to be appointed must be of the other gender.
The Election obligates us to grant only the type of Trustee 102 Award we elected and applies to all Israeli Participants who are granted Trustee 102 Awards during such period, all in accordance with the provisions of Section 102(g) of the Ordinance.
We have filed the 2023 Plan and the Israeli Sub-Plan with the Israel Tax Authority including our election to grant Capital Gain Awards (the “Election”). The Election obligates us to grant only Capital Gain Awards to all Israeli Participants who are granted Trustee 102 Awards, all in accordance with the provisions of Section 102(g) of the Ordinance.
Each of our audit committee members currently meets the requirements to be qualified as an unaffiliated director under the Companies Law, thereby fulfilling the foregoing Israeli law requirement for the composition of the audit committee.
For this purpose, a break of less than two years in his or her service as a director shall not be deemed to interrupt the continuity of the service. 101 Table of Contents Each of our audit committee members currently meets the requirements to be qualified as an unaffiliated director under the Companies Law, thereby fulfilling the foregoing Israeli law requirement for the composition of the audit committee.
Compensation of Senior Management and Other Employees Compensation Policy Under the Companies Law In general, under the Companies Law, a public company must have a compensation policy approved by its board of directors after receiving and considering the recommendations of the compensation committee.
In the event of a change of control (as defined in the 2023 Plan), all outstanding equity awards held by such directors pursuant to this policy will accelerate and vest in full. 85 Table of Contents Compensation of Senior Management and Other Employees Compensation Policy Under the Companies Law In general, under the Companies Law, a public company must have a compensation policy approved by its board of directors after receiving and considering the recommendations of the compensation committee.
Payorski also served as the Chief Financial Officer of Stratasys Ltd., a developer and manufacturer of 3D printers and additive solutions, from January 2017 to February 2022. Prior to that, from December 2012 until December 2016, Ms. Payorski served as Senior Vice President, Corporate Finance at Stratasys Ltd. Ms.
Payorski currently serves as director and member of the audit and compensation committees of Kamada Ltd. and as director and member of the audit committee of Gauzy Ltd. Ms. Payorski also served as the chief financial officer of Stratasys Ltd., a developer and manufacturer of 3D printers and additive solutions, from January 2017 to February 2022.
Listing Requirements Under the corporate governance rules of Nasdaq, we are required to maintain a compensation committee consisting of at least two independent directors. 113 Table of Contents Our compensation committee consists of Ohad Chereshniya, Lilach Payorski and Michael Farello, with Ohad Chereshniya serving as chair.
Listing Requirements Under the corporate governance rules of Nasdaq, we are permitted to follow home country practice with respect to the composition of our nominations committee. Our nominating, governance and sustainability committee consists of Ohad Chereshniya, Lilach Payorski and Michael Farello, with Ohad Chereshniya serving as chair.
As noted above, Lilach Payorski and Ohad Chereshniya serve as our external directors. 108 Table of Contents The provisions of the Companies Law set forth special approval requirements for the election of external directors.
The provisions of the Companies Law set forth special approval requirements for the election of external directors.
The Israeli Sub-Plan is governed by, construed and enforced in accordance with the laws of the State of Israel.
The Israeli Sub-Plan is governed by, construed and enforced in accordance with the laws of the State of Israel. The below summary of the Israeli Sub-Plan is qualified in its entirety by reference to the 2023 Plan, which is filed as an exhibit to this Annual Report.
Executive Officers and Directors,” including share-based compensation expenses recorded in our financial statements, for the year ended December 31, 2023, was approximately $34.4 million. This amount includes deferred or contingent compensation accrued for such year (and excludes deferred or contingent amounts accrued for during the year ended December 31, 2022 and paid during the year ended December 31, 2023).
This amount includes deferred or contingent compensation accrued for such year (and excludes deferred or contingent amounts accrued for during the year ended December 31, 2023 and paid during the year ended December 31, 2024).
Board of Directors Under the Companies Law and our amended and restated articles of association, our business and affairs are managed under the direction of our board of directors. Our board of directors may exercise all powers and may take all actions that are not specifically granted to our shareholders.
Our board of directors may exercise all powers and may take all actions that are not specifically granted to our shareholders. Our Chief Executive Officer (referred to as a “general manager” under the Companies Law) is responsible for our day-to-day management.
Ohad Chereshniya has served as a member of our board of directors since July 2023. Mr. Chereshniya currently serves as director of the audit committee of Itim Ensemble, an Israeli non-profit organization, and has been Chief Financial Officer at Elementor Ltd. since January 2020. Mr.
Chereshniya currently serves as director of the audit committee of Itim Ensemble, an Israeli non-profit organization, and was Chief Financial Officer at Elementor Ltd. from January 2020 through January 2025. Mr. Chereshniya served as the Chief Financial Officer of Context Based 4casting Ltd. from July 2017 to December 2019. Prior to that, from June 2013 until May 2017, Mr.
We do not currently rely on these exemptions, but may in the future decide to use the “foreign private issuer exemption” and opt out of some or all of the other corporate governance rules.
We currently rely on these exemptions, which overlap with exemptions available to “foreign private issuers.” See the section titled “Item 6.C. Directors, Senior Management and Employees—Board Practices—Corporate Governance Practices” for more information. We may in the future decide to use more exemptions available to “foreign private issuers” and opt out of some or all of Nasdaq’s other corporate governance rules.
Our compensation committee fulfils the foregoing Israeli law requirements related to the composition of the compensation committee.
Our compensation committee fulfils the foregoing Israeli law requirements related to the composition of the compensation committee. Listing Requirements Under the corporate governance rules of Nasdaq, we are permitted to follow home country practice with respect to the composition of our compensation committee.
We otherwise intend to comply with the rules generally applicable to U.S. domestic companies listed on Nasdaq. We may, however, in the future decide to use the “foreign private issuer exemption” and opt out of some or all of the other corporate governance rules.
We may, however, in the future decide to use the “foreign private issuer exemption” and opt out of some or all of the other corporate governance rules. 96 Table of Contents Board of Directors Under the Companies Law and our amended and restated articles of association, our business and affairs are managed under the direction of our board of directors.
In some specific cases, the compensation of our executive officers may consist primarily of equity-based compensation. To the extent required under applicable law, the actual annual bonus paid to our officers will be approved by our compensation committee and our board of directors.
In some specific cases, the compensation of our executive officers may consist primarily of equity-based compensation.
Our board of directors has determined that each member of our compensation committee is independent under the corporate governance rules of Nasdaq, including the additional independence requirements applicable to the members of a compensation committee.
Our board of directors has determined that Ohad Chereshniya and Lilach Payorski are each independent under the corporate governance rules of Nasdaq.
Payorski holds a B.A. in Accounting and Economics from Tel Aviv University. Ms. Payorski also completed the Board of Directors and Senior Corporate Officers Program at LAHAV, School of Management, Tel Aviv University. We believe that Ms. Payorski’s experience as a director and officer of other public companies qualifies her to serve on our board of directors.
Payorski also completed the Board of Directors and Senior Corporate Officers Program at LAHAV, School of Management, Tel Aviv University. Ohad Chereshniya has served as a member of our board of directors since July 2023. Mr.
Chereshniya served as the Chief Financial Officer of Context Based 4casting Ltd. from July 2017 to December 2019. Prior to that, from June 2013 until May 2017, Mr. Chereshniya served as our Chief Financial Officer. Mr. Chereshniya holds an M.B.A. and a B.A. in Accounting from Tel Aviv University. We believe that Mr.
Chereshniya served as our Chief Financial Officer. Mr. Chereshniya holds an M.B.A. and a B.A. in Accounting from Tel Aviv University. Yehoshua (Shuki) Nir has served as a member of our board of directors since July 2024. Mr. Nir is Chief Executive Officer of SolarEdge Technologies, Inc.
Farello holds a B.S. in Industrial Engineering from Stanford University and a Master of Business Administration from Harvard Business School. We believe that Mr. Farello’s experience in the consumer retail industry and his experience serving as a director of other companies qualifies him to serve on our board of directors.
Farello holds a B.S. in Industrial Engineering from Stanford University and a Master of Business Administration from Harvard Business School. Lilach Payorski has served as a member of our board of directors since March 2022; she chairs the Audit Committee and is classified as an external director under the Companies Law. Ms.
Jonathan Truppman, of $6.0 million and $1.0 million, respectively. Employment and Consulting Agreements with Executive Officers We have entered into written employment agreements with each of our executive officers.
During the year ended December 31, 2024, we also recorded a one-time bonus expense in respect of Mr. Niv Price, of $2.0 million. Employment and Consulting Agreements with Executive Officers We have entered into written employment agreements with each of our executive officers.
Jonathan Truppman of $1.3 million, $1.2 million, $1.8 million, $1.9 million and $1.2 million, respectively. All equity-based compensation grants to our Covered Executives were made in accordance with our compensation policy and were approved by our board of directors.
All equity-based compensation grants to our Covered Executives were made in accordance with our compensation policy and were approved by our compensation committee and board of directors. Assumptions and key variables used in the calculation of such amounts are described in Note 13 to our audited consolidated financial statements included elsewhere in this Annual Report.

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Any such approval is subject to the terms of the Companies Law setting forth, among other things, the appropriate bodies of the company required to provide such approval and the methods of obtaining such approval. 119 Table of Contents Disclosure of Personal Interests of an Office Holder and Approval of Certain Transactions The Companies Law requires that an office holder promptly disclose to the board of directors any personal interest that such office holder may have and all related material information known to such office holder concerning any existing or proposed transaction with the company.
Any such approval is subject to the terms of the Companies Law setting forth, among other things, the appropriate bodies of the company required to provide such approval and the methods of obtaining such approval. 109 Table of Contents Disclosure of Personal Interests of an Office Holder and Approval of Certain Transactions The Companies Law requires that an office holder promptly disclose to the board of directors any personal interest that such office holder may have and all related material information known to such office holder concerning any existing or proposed transaction with the company.
For purposes of the table below, we deem ordinary shares subject to options, RSUs, warrants or other rights that are currently exercisable or exercisable within 60 days of December 31, 2023 to be outstanding and to be beneficially owned by the person holding the options, RSUs, or warrants for the purposes of computing the ownership and percentage ownership of that person but we do not treat them as outstanding for the purpose of computing the percentage ownership of any other person.
For purposes of the table below, we deem ordinary shares subject to options, RSUs, warrants or other rights that are currently exercisable or exercisable within 60 days of December 31, 2024 to be outstanding and to be beneficially owned by the person holding the options, RSUs, or warrants for the purposes of computing the ownership and percentage ownership of that person but we do not treat them as outstanding for the purpose of computing the percentage ownership of any other person.
Unless otherwise noted below, each shareholder’s address is 110 Greene Street, New York, New York 10012. 117 Table of Contents A description of any material relationship that our principal shareholders have had with us or any of our affiliates within the past three years is included in the section titled “Item 7.B.
Unless otherwise noted below, each shareholder’s address is 110 Greene Street, New York, New York 10012. 107 Table of Contents A description of any material relationship that our principal shareholders have had with us or any of our affiliates within the past three years is included in the section titled “Item 7.B.
Major Shareholders The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of December 31, 2023 by each person or group of affiliated persons known by us to own beneficially more than 5% of our outstanding ordinary shares, each of our executive officers and directors individually and all of our executive officers and directors as a group.
Major Shareholders The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of December 31, 2024 by each person or group of affiliated persons known by us to own beneficially more than 5% of our outstanding ordinary shares, each of our executive officers and directors individually and all of our executive officers and directors as a group.
Two or more shareholders with a personal interest in the approval of the same transaction are deemed to be one shareholder for these purposes. For a description of the approvals required under Israeli law for compensation arrangements of officers and directors, see the section titled Item 6.B.
Two or more shareholders with a personal interest in the approval of the same transaction are deemed to be one shareholder for these purposes. For a description of the approvals required under Israeli law for compensation arrangements of officers and directors, see the section titled “Item 6.B.
In addition, a shareholder has a general duty to refrain from discriminating against other shareholders. 120 Table of Contents Certain shareholders also have a duty of fairness toward the company.
In addition, a shareholder has a general duty to refrain from discriminating against other shareholders. 110 Table of Contents Certain shareholders also have a duty of fairness toward the company.
Following the receipt of such request, we may file such registration statement within 60 days, but are entitled to refuse such registration under the terms of the registration rights agreement. We will not be required to effect more than two registrations on Form F-1 that have been declared effective.
Following the receipt of such request, we may file such registration statement within 60 days but are entitled to refuse such registration under the terms of the registration rights agreement. We will not be required to effect more than two registrations on Form F-1 that have been declared effective. We have the right to defer such registration under certain circumstances.
Consists of 6,852,450 Class A ordinary shares and 11,547,000 Class B ordinary shares held by Oran Shilo Investments LP (“Shilo”). Shilo is controlled by Oran Holtzman, our founder and Chief Executive Officer, and Mr.
Consists of 6,852,450 Class A ordinary shares and 11,547,000 Class B ordinary shares beneficially owned by Oran Shilo Investments LP (“Shilo”). Shilo is controlled by Oran Holtzman, our founder and Chief Executive Officer, and Mr.
Directors, Senior Management and Employees—Board Practices—Exculpation, Insurance, and Indemnification of Office Holders” for more information. C. Interests of Experts and Counsel Not applicable.
Directors, Senior Management and Employees—Board Practices—Exculpation, Insurance, and Indemnification of Office Holders” for more information. C. Interests of Experts and Counsel Not applicable. 113 Table of Contents
Consists of Class A ordinary shares held of record by LCGP3 Pro Makeup, L.P., CGP3 Managers, L.L.C. is the general partner of LCGP3 Pro Makeup, L.P. and the management of CGP3 Managers, L.L.C. is controlled by its managing members. Scott A. Dahnke and J.
Consists of Class A ordinary shares beneficially owned by LCGP3 Pro Makeup, L.P. CGP3 Managers, L.L.C. is the general partner of LCGP3 Pro Makeup, L.P. and the management of CGP3 Managers, L.L.C. is controlled by its managing members. Scott A. Dahnke and J.
Accordingly, we believe that the shares held by CEDE & CO. and American Stock Transfer & Trust Company include Class A ordinary shares beneficially owned by U.S. holders and non-U.S. holders. There are no U.S. holders of record of our Class B ordinary shares.
Accordingly, we believe that the shares held by CEDE & CO. and Equiniti Trust Company, LLC include Class A ordinary shares beneficially owned by U.S. holders and non-U.S. holders. There are no U.S. holders of record of our Class B ordinary shares.
As of December 31, 2023, there were 19,992,807 Class A ordinary shares and 11,547,000 Class B ordinary shares subject to the registration rights agreement. Our registration rights agreement entitles the RRA Investors to certain registration rights, as set forth below. Form F-1 Demand Rights Any RRA Investor may request that we register all or a portion of their shares.
As of December 31, 2024, there were 10,889,922 Class A ordinary shares and 11,547,000 Class B ordinary shares subject to the registration rights agreement. Our registration rights agreement entitles the RRA Investors to certain registration rights, as set forth below. Form F-1 Demand Rights Any RRA Investor may request that we register all or a portion of their shares.
The enforceability of covenants not to compete is subject to limitations. Incentive Plan with Respect to SpoiledChild On October 4, 2020, we provided each of Oran Holtzman, our co-founder and Chief Executive Officer, and Shiran Holtzman-Erel, our co-founder and Chief Product Officer, with an incentive plan in connection with revenue earned from our SpoiledChild brand.
Incentive Plan with Respect to SpoiledChild On October 4, 2020, we provided each of Oran Holtzman, our co-founder and Chief Executive Officer, and Shiran Holtzman-Erel, our co-founder and Chief Product Officer, with an incentive plan in connection with revenue earned from our SpoiledChild brand.
Registration Rights On June 2, 2017, we entered into a registration rights agreement with Oran Shilo Investments LP and Il Makiage Investments L.P., each of which is controlled by Oran Holtzman, our founder and Chief Executive Officer, and LCGP3 (together, the “RRA Investors”).
This agreement terminated in connection with the closing of our initial public offering. 111 Table of Contents Registration Rights On June 2, 2017, we entered into a registration rights agreement with Oran Shilo Investments LP and Il Makiage Investments L.P., each of which is controlled by Oran Holtzman, our founder and Chief Executive Officer, and LCGP3 (together, the “RRA Investors”).
Price an aggregate of $3.3 million in exchange for his shares of Voyage81. 122 Table of Contents Holdback Agreement On July 9, 2021, we entered into a holdback agreement (the “Holdback Agreement”), with Mr. Price as a condition for the consummation of the acquisition of Voyage81. Pursuant to the Holdback Agreement, we withheld from Mr.
In connection with the acquisition of Voyage81, we paid Mr. Price an aggregate of $3.3 million in exchange for his shares of Voyage81. Holdback Agreement On July 9, 2021, we entered into a holdback agreement (the “Holdback Agreement”), with Mr. Price as a condition for the consummation of the acquisition of Voyage81.
However, our U.S. holders of record include CEDE & CO., a nominee of The Depository Trust Company, which held 13,921,050 of our Class A ordinary shares as of December 31, 2023, and American Stock Transfer & Trust Company (n/k/a Equiniti Trust Company, LLC), which held 338,032 of our Class A ordinary shares pursuant to escrow arrangements related to the Revela Merger Agreement as of December 31, 2023.
However, our U.S. holders of record include CEDE & CO., a nominee of The Depository Trust Company, which held 31,570,415 of our Class A ordinary shares as of December 31, 2024, and Equiniti Trust Company, LLC (f/k/a American Stock Transfer & Trust Company), which held 16,594 of our Class A ordinary shares pursuant to escrow arrangements related to the Revela Merger Agreement as of December 31, 2024.
Additional Information—Articles of Association” of this Annual Report. Change in Control Arrangements We are not aware of any arrangement that may at a subsequent date, result in a change of control of the Company. B.
Change in Control Arrangements We are not aware of any arrangement that may at a subsequent date, result in a change of control of the Company. B.
The first of such installment payments was made to Mr. Price on July 26, 2023. Agreements with Directors and Officers Employment Agreements We have entered into at-will employment agreements with each of our executive officers who works for us as an employee. These agreements each contain provisions regarding non-competition, confidentiality of information, and assignment of inventions.
The first of such installment payments was made to Mr. Price on July 26, 2023, and the second installment payment was made to Mr. Price on July 26, 2024. Agreements with Directors and Officers Employment Agreements We have entered into at-will employment agreements with each of our executive officers who works for us as an employee.
We have the right to defer such registration under certain circumstances. 121 Table of Contents Form F-3 Demand Rights Any RRA Investor can make a request that we register their shares on Form F-3 within 45 days if we are qualified to file a registration statement on Form F-3.
Form F-3 Demand Rights Any RRA Investor can make a request that we register their shares on Form F-3 within 45 days if we are qualified to file a registration statement on Form F-3. We will not be required to effect more than two registrations on Form F-3. We have the right to defer such registration under certain circumstances.
The indemnification obligations pursuant to this agreement are uncapped. No services were rendered and we did not pay Catterton Management any amounts under the Indemnification and Expense Agreement for the years ended December 31, 2023, 2022 and 2021, respectively. This agreement terminated in connection with the closing of our initial public offering.
The indemnification obligations pursuant to this agreement are uncapped. No services were rendered and we did not pay Catterton Management any amounts under the Indemnification and Expense Agreement for the years ended December 31, 2024, 2023 and 2022, respectively.
The percentage of outstanding ordinary shares is computed on the basis of 45,319,675 Class A ordinary shares and 11,547,000 Class B ordinary shares outstanding as of December 31, 2023.
The percentage of outstanding ordinary shares is computed on the basis of 44,281,291 Class A ordinary shares and 11,547,000 Class B ordinary shares outstanding as of December 31, 2024.
See the section titled “Description of Share Capital and Articles of Association—Amended and Restated Articles of Association—Voting.” ​ As of December 31, 2023, we had 101 holders of record of our Class A ordinary shares in the United States, holding, in the aggregate 34,909,648, or 77.0%, of our outstanding Class A ordinary shares.
See the section titled “Description of Share Capital and Articles of Association—Amended and Restated Articles of Association—Voting.” As of December 31, 2024, we had 29 holders of record of our Class A ordinary shares in the United States, holding, in the aggregate 37,299,661, or 84.2%, of our outstanding Class A ordinary shares.
Michael Chu are the managing members of CGP3 Managers, L.L.C. and as such may be deemed to share voting control and investment power over such shares that are held by CGP3 Managers, L.L.C. The address of LCGP3 Pro Makeup, L.P. is 599 W. Putnam Avenue, Greenwich, CT 06830. 2) Based on a Schedule 13G filing made on January 26, 2024.
Michael Chu are the managing members of CGP3 Managers, L.L.C. and as such may be deemed to share voting control and investment power over such shares that are held by CGP3 Managers, L.L.C. The address of LCGP3 Pro Makeup, L.P. is 599 W.
Major Shareholders and Related Party Transactions—Related Party Transactions.” ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares Beneficially Owned ​ ​ Class A ​ ​ ​ Class B ​ ​ ​ ​ ​ ​ Ordinary ​ ​ ​ Ordinary ​ ​ ​ % of Voting ​ Shares % Shares % Power Name of Beneficial Owner ​ Principal Shareholders ​ L Catterton (1) 13,140,357 29.0 % — — 8.2 % Baillie Gifford & Co (2) 5,860,645 12.9 % — — 3.6 % Directors and Executive Officers ​ ​ Oran Holtzman (3) 6,852,450 15.1 % 11,547,000 100 % 76.1 % Shiran Holtzman-Erel — — ​ — — — ​ Lindsay Drucker Mann (4) 715,324 1.6 % — — * ​ Jonathan Truppman (5) 121,352 * — — * ​ Niv Price (6) 53,300 * — — * ​ Michael Farello (7) 57,143 * — — * ​ Lilach Payorski (8) 5,912 * — — * ​ Ohad Chereshniya — — — — — ​ All executive officers and directors as a group (8 persons) 7,805,481 17.2 % 11,547,000 100 % 76.7 % * Indicates holdings of less than 1% 1) Based on a Schedule 13G filing made on February 9, 2024.
Major Shareholders and Related Party Transactions—Related Party Transactions.” ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares Beneficially Owned ​ ​ Class A ​ ​ ​ Class B ​ ​ ​ ​ ​ ​ Ordinary ​ ​ ​ Ordinary ​ ​ ​ % of Voting ​ Shares % Shares % Power Name of Beneficial Owner ​ Principal Shareholders ​ L Catterton (1) 4,037,472 9.1 % — — 2.5 % Baillie Gifford & Co (2) 5,969,581 13.5 % — — 3.7 % FMR LLC (3) ​ 3,877,635 ​ 8.8 % — ​ — ​ 2.4 % Directors and Executive Officers ​ ​ Oran Holtzman (4) 6,852,450 15.5 % 11,547,000 100 % 76.2 % Shiran Holtzman-Erel — — ​ — — — ​ Lindsay Drucker Mann (5) 756,735 1.7 % — — * ​ Shuki Nir — — — — — ​ Niv Price (6) 72,936 * — — * ​ Michael Farello (7) 57,143 * — — * ​ Lilach Payorski (8) 5,912 * — — * ​ Ohad Chereshniya (9) 2,956 * — — * ​ All executive officers and directors as a group (8 persons) 7,748,132 17.5 % 11,547,000 100 % 76.8 % * Indicates holdings of less than 1% 1) Based on a Schedule 13G filing made on November 18, 2024.
To our knowledge, and based on Section 13 filings with the SEC, other than as disclosed in the table above, there have been no other significant changes in the percentage ownership held by any major shareholder during the past three years. 118 Table of Contents Voting Rights Information related to voting rights of certain of the major shareholders listed in the table above is set forth in the section titled “Item 10.B.
To our knowledge, and based on Section 13 filings with the SEC, other than as disclosed in the table above, there have been no other significant changes in the percentage ownership held by any major shareholder during the past three years.
Holtzman has voting control and investment power over our shares that are held by Shilo. 4) Consists of 30,571 Class A ordinary shares and 684,753 Class A ordinary shares underlying options exercisable within 60 days of December 31, 2023. 5) Consists of 121,352 Class A ordinary shares underlying options exercisable within 60 days of December 31, 2023. 6) Consists of 53,300 Class A ordinary shares. 7) Consists of 57,143 Class A ordinary shares. 8) Consists of 2,956 Class A ordinary shares and 2,956 Class A ordinary shares underlying RSUs, which vest within 60 days of December 31, 2023.
Holtzman has voting control and investment power over our shares that are held by Shilo. 5) Consists of 34,729 Class A ordinary shares and 722,006 underlying options exercisable within 60 days of December 31, 2024. 6) Consists of 72,936 Class A ordinary shares. 7) Consists of 57,143 Class A ordinary shares. 8) Consists of 5,912 Class A ordinary shares. 9) Consists of 2,956 Class A ordinary shares.
Rights of Appointment We are not a party to, and are not aware of, any voting agreements among our shareholders which are currently in effect. Nominee and Indemnity Agreement with Catterton Management Company, L.L.C. and Michael Farello On November 27, 2023, we entered into a Nominee and Indemnity Agreement with Catterton Management Company, L.L.C.
Rights of Appointment We are not a party to, and are not aware of, any voting agreements among our shareholders which are currently in effect. Repurchase Agreement with LCGP3 Pro Makeup, L.P.
Pursuant to this side letter, LCGP3 is provided with the unilateral right to initiate a merger of Cosmofill with us at no cost to us, and Cosmofill is obligated to bear sole responsibility for all costs or expenses associated with such merger.
Pursuant to this side letter, LCGP3 is provided with the unilateral right to initiate a merger of Cosmofill with us at no cost to us, and Cosmofill is obligated to bear sole responsibility for all costs or expenses associated with such merger. 112 Table of Contents Agreements with Niv Price Stock Purchase Agreement On July 9, 2021, we entered into a stock purchase agreement with the shareholders of Voyage81, including Niv Price, now our Chief Technology Officer, whereby we acquired all the shares of Voyage81 from such shareholders.
Consists of Class A ordinary shares held of record by Baillie Gifford & Co. The address of Baillie Gifford & Co is Calton Square, 1 Greenside Row, Edinburgh EH1 3AN, Scotland, U.K. 3) Based on a Schedule 13G filing made on February 12, 2024.
The address of Baillie Gifford & Co is Calton Square, 1 Greenside Row, Edinburgh EH1 3AN, Scotland, U.K. 3) Based on information reported by FMR LLC on Form 13F-HR filed with the SEC on February 13, 2025. Consists of Class A ordinary shares beneficially owned by Fidelity Management & Research Co.
According to a Schedule 13G filed with the SEC on January 26, 2024, Baillie Gifford & Co beneficially owns more than 5% of our ordinary shares.
According to Schedule 13G filings made with the SEC on November 4, 2024 and November 12, 2024, Baillie Gifford & Co and FMR LLC each respectively beneficially own greater than 5% of our Class A ordinary shares.
Significant Changes in Ownership Our initial public offering on Nasdaq occurred on July 19, 2023. In connection with our initial public offering, the Company issued and sold 1,754,385 Class A ordinary shares, LCGP3 sold 5,068,969 Class A ordinary shares and Oran Holtzman sold 7,097,696 Class A ordinary shares.
In connection with our initial public offering, the Company issued and sold 1,754,385 Class A ordinary shares, LCGP3 sold 5,068,969 Class A ordinary shares and Oran Holtzman sold 7,097,696 Class A ordinary shares. 108 Table of Contents During 2024, LCGP3 sold via (i) an underwritten secondary offering, (ii) a repurchase by the Company, and (iii) a brokered private sale a total of 9,102,885 Class A ordinary shares, reducing its holdings to 4,037,472 Class A ordinary shares.
Removed
We will not be required to effect more than two registrations on Form F-3. We have the right to defer such registration under certain circumstances.
Added
Putnam Avenue, Greenwich, CT 06830. 2) Based on information reported by Baillie Gifford & Co on Form 13F-HR filed with the SEC on January 31, 2025. Consists of Class A ordinary shares beneficially owned by Baillie Gifford & Co., Baillie Gifford Overseas LTD and Baillie Gifford Investment Management (Europe) Ltd.
Removed
Agreements with Niv Price Stock Purchase Agreement On July 9, 2021, we entered into a stock purchase agreement with the shareholders of Voyage81, including Niv Price, now our Chief Technology Officer, whereby we acquired all the shares of Voyage81 from such shareholders. In connection with the acquisition of Voyage81, we paid Mr.
Added
LLC, Fidelity Management Trust Co., Strategic Advisers LLC, Fidelity Institutional Asset Management Trust Co. and FIAM LLC. The address of FMR LLC is 245 Summer Street, Boston, MA 02210. 4) Based on a Schedule 13G filing made on February 12, 2024.
Added
Significant Changes in Ownership Our initial public offering on Nasdaq occurred on July 19, 2023.
Added
Voting Rights Information related to voting rights of certain of the major shareholders listed in the table above is set forth in the section titled “Item 10.B. Additional Information—Articles of Association” of this Annual Report.
Added
(“LCGP3”) On November 12, 2024, we entered into an agreement for the repurchase of certain of its Class A ordinary shares owned by LCGP3 for a total consideration of approximately $100 million (the “Share Repurchase”).
Added
The Share Repurchase closed on November 18, 2024, at which time the Company repurchased from LCGP3 and retired approximately 2.35 million shares at a price per share of $42.501.
Added
Registration and Resale of Class A Ordinary Shares of the Company by LCGP3 On March 15, 2024, we announced the pricing of an underwritten secondary offering (the “March Secondary Offering”) of 4.78 million of our Class A ordinary shares by LCGP3 at a price to the public of $43.50 per share.
Added
We did not receive any proceeds in the March Secondary Offering. The March Secondary Offering was conducted pursuant to the registration rights agreement with LCGP3, as described below under “Registration Rights”. Nominee and Indemnity Agreement with Catterton Management Company, L.L.C. and Michael Farello On November 27, 2023, we entered into a Nominee and Indemnity Agreement with Catterton Management Company, L.L.C.
Added
Pursuant to the Holdback Agreement, we withheld from Mr.
Added
These agreements each contain provisions regarding non-competition, confidentiality of information, and assignment of inventions. The enforceability of covenants not to compete is subject to limitations.

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