ODD Lawsuit Alleges Concealment Of Digital Ad Performance Issues - ODDITY TECH LTD. Investors Face Losses Amid Severe Operational Disruptions In Advertising: SueWallSt

Important Notice Regarding Alleged Customer Acquisition Cost Misrepresentations

NEW YORK, May 7, 2026 /PRNewswire/ -- SueWallSt notifies investors in ODDITY Tech Ltd. (NASDAQ: ODD) that a class action lawsuit has been filed on behalf of shareholders who purchased securities between February 26, 2025 and February 24, 2026. Find out if you qualify to recover losses. You may also contact Joseph E. Levi, Esq. at [email protected] or (888) SueWallSt.

ODD shares fell $14.28 per share, or 49.21%, to close at $14.74 on February 25, 2026, after the Company disclosed a severe disruption in its digital advertising operations. The lead plaintiff deadline is May 11, 2026.

How Ad Auction Quality Allegedly Drove Oddity's Reported Growth

The direct-to-consumer beauty technology sector depends on digital advertising efficiency to acquire new customers profitably. For a company like Oddity, which operates without physical retail stores, the cost and quality of online ad auctions are not peripheral concerns. They are the engine of the business model. When ad auctions deliver relevant placements at competitive costs, customer acquisition costs stay low and revenue scales. When they do not, the entire financial algorithm breaks down.

The lawsuit contends that an algorithm change by Oddity's largest advertising partner diverted the Company's ads to lower quality auctions at abnormally high costs. This dislocation allegedly inflated customer acquisition costs in ways that were neither correlated with the broader market nor consistent with historical experience.

Key Advertising Disruption Allegations for Shareholders

• Oddity's advertisements were allegedly diverted to lower quality ad auctions, increasing cost-per-click and reducing click-through rates
• The algorithm change originated with Oddity's single largest advertising partner, creating concentrated platform risk that was not disclosed
• Selling, general and administrative costs (which include advertising spend) rose from $117.125 million in Q1 2024 to $158.183 million in Q1 2025, a 35% increase the complaint alleges reflected escalating acquisition costs
• Management allegedly continued to raise full-year guidance across revenue, EBITDA, and EPS through three consecutive quarters while the dislocation was occurring
• The Company later admitted it "observed that something was different in the second half of 2025" yet continued issuing optimistic forward projections

The Alleged Overstatement of Oddity's Digital Model Sustainability

Throughout 2025, the Company repeatedly characterized its direct-to-consumer model as a source of competitive strength. As alleged in the complaint, management described the business as having "multiple engines and long runways" and touted the "power of online" while raising financial outlook each quarter. The action claims these statements overstated the overall strength, stability, and sustainability of Oddity's digital operating model at a time when the advertising disruption was already eroding the foundation of that model.

"This case presents important questions about advertising cost disclosure obligations in the digital-first consumer sector. When a company's entire revenue model depends on efficient customer acquisition through a single dominant advertising partner, any material disruption to that channel is information shareholders need," stated Joseph E. Levi, Esq.

Submit your information to join this case or contact Joseph E. Levi, Esq. at (888) SueWallSt.

Applications to serve as lead plaintiff must be filed by May 11, 2026.

CONTACT:
SueWallSt
Joseph E. Levi, Esq.
Ed Korsinsky, Esq.
33 Whitehall Street, 27th Floor
New York, NY 10004
[email protected]
Tel: (888) SueWallSt
Fax: (212) 363-7171

SOURCE SueWallSt.com