Waldencast plc (NASDAQ: WALD) reported that its 2025 full‑year revenue was $272.1 million, essentially flat against $273.9 million in FY 2024, while adjusted EBITDA fell sharply to $16.1 million from $40.3 million a year earlier, reflecting a 60% drop in operating profitability.
The fourth‑quarter results mirrored the year‑to‑year trend: net revenue was $72.0 million, unchanged from $72.0 million in Q4 2024, but adjusted EBITDA plunged to $6.6 million from $11.2 million in the prior quarter, a decline of 41%. The compression in margins is driven by higher launch costs for Obagi injectables and a shift in Milk Makeup’s channel mix away from an exclusive relationship with Sephora, which increased marketing and distribution expenses.
Segment performance highlights a divergent picture. Obagi Medical accelerated its direct‑to‑consumer and international sales, offsetting softer international demand for Milk Makeup. However, the launch of new Obagi injectables and the transition of Milk Makeup’s distribution strategy contributed to the overall margin squeeze, with adjusted gross profit contracting by 270 basis points year‑over‑year and adjusted EBITDA margin falling by 880 basis points.
Waldencast has taken steps to strengthen its balance sheet, selling the Obagi Japan trademark to Rohto Pharmaceutical for $82.5 million and refinancing its credit facility with a new $225 million agreement with Lumina Capital Management. These actions, coupled with a strategic review led by Lazard, have reduced leverage and provided liquidity, but the company has declined to issue a 2026 outlook, signaling uncertainty about future growth trajectories.
Management emphasized the transformation underway: "Fiscal 2025 was a defining year of transformation for Waldencast, as we focused on strengthening our operating platform and sharpening our strategic focus to support long‑term, profitable growth. While our fourth‑quarter performance reflected this transition with mixed results across our portfolio, we have successfully expanded our addressable market, increased the reach and effectiveness of our brand marketing, and significantly strengthened our balance sheet."
Analysts noted that the company’s Q4 revenue of $72 million beat expectations by $4.2 million, but the sharp decline in adjusted EBITDA underscored the cost pressures and strategic investments that are reshaping the business.
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