Israeli Beauty Giant Audity Reports 73% Profit Drop Amid Technical Glitches
Audity, an Israeli beauty tech company, announced its second-quarter financial results ending June 30, 2026, revealing a significant 73% decrease in net profit compared to the previous year. Net profit fell to $13 million from $49 million in the second quarter of 2025, while net revenues dropped 25% to $181 million from $241 million.
The company highlighted key achievements during the quarter, including double-digit revenue growth for its brand SpoiledChild, which is projected to reach nearly $350 million in net revenue in 2026. Audity also noted strong initial results for its new brand, METHODIQ, anticipating it will surpass SpoiledChild's first-year revenue. The company continued developing its molecular discovery platform, Audity Labs.
Audity addressed ongoing disruptions with its advertising algorithm for its brand IL MAKIAGE, attributing the issue to a technical glitch. The company is working closely with its largest advertising partner to resolve the problem, implementing tests and strategies to retrain the algorithm. Audity remains optimistic that the disruption is solvable and progress is being made towards normalization.
Financially, Audity repurchased approximately $80 million worth of Class A common stock in the second quarter as part of its $200 million buyback program initiated in March 2026. The company also redeemed $50 million in 0% convertible notes due in 2030 for approximately $35 million, maintaining high liquidity with $561 million in cash and equivalents as of June 30, 2026.
Looking ahead, Audity's CFO, Lindsay Drucker Mann, indicated an improvement in net revenue trends for the third quarter, expecting a 5% year-over-year decline, a significant improvement from the first half of the year. This optimism is driven by growth in SpoiledChild and METHODIQ and a mitigation of the IL MAKIAGE disruption.
