Olaplex (OLPX) 10-Q 9 Nov 22 2022 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Sep. 30, 2022	Oct. 31, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	001-40860
Entity Registrant Name	Olaplex Holdings, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	87-1242679
City Area Code	310
Local Phone Number	691-0776
Title of 12(b) Security	Common stock, par value $0.001 per share
Trading Symbol	OLPX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		649,181,334
Entity Central Index Key	0001868726
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false
Current Fiscal Year End Date	--12-31

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current Assets:
Cash and cash equivalents	$ 249,399	$ 186,388
Accounts receivable, net of allowances of $14,976 and $8,231	93,286	40,779
Inventory	151,283	98,399
Other current assets	3,277	9,621
Total current assets	497,245	335,187
Property and equipment, net	614	747
Intangible assets, net	1,007,267	1,043,344
Goodwill	168,300	168,300
Deferred taxes, net	12,876	8,344
Other assets	10,498	4,500
Total assets	1,696,800	1,560,422
Current Liabilities:
Accounts payable	23,126	19,167
Accrued expenses and other current liabilities	26,031	17,332
Accrued sales and income taxes	16,096	12,144
Current portion of long-term debt	6,750	20,112
Current portion of Related Party payable pursuant to Tax Receivable Agreement	16,557	4,157
Total current liabilities	88,560	72,912
Related Party payable pursuant to Tax Receivable Agreement	208,582	225,122
Long-term debt	655,662	738,090
Total liabilities	952,804	1,036,124
Contingencies (Note 11)
Stockholders’ equity (Notes 1 and 9):
Common stock, $0.001 par value per share; 2,000,000,000 shares authorized, 649,112,823 and 648,794,041 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	649	648
Preferred stock, $0.001 par value per share; 25,000,000 shares authorized and no shares issued and outstanding	0	0
Additional paid-in capital	310,193	302,866
Accumulated other comprehensive income	1,931	0
Retained earnings	431,223	220,784
Total stockholders’ equity	743,996	524,298
Total liabilities and stockholders’ equity	$ 1,696,800	$ 1,560,422

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS - Parenthetical - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Accounts receivable, allowance for credit losses	$ 14,976	$ 8,231
Common stock, par value (in usd per share)	$ 0.001	$ 0.001
Common stock, shares authorized (shares)	2,000,000,000	2,000,000,000
Common stock, shares, issued (shares)	649,112,823	648,794,041
Common stock, shares, outstanding (shares)	649,112,823	648,794,041
Preferred stock, par value (in usd per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (shares)	25,000,000	25,000,000
Preferred stock, shares issued (shares)	0	0
Preferred stock, shares outstanding (shares)	0	0

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Statement of Comprehensive Income [Abstract]
Net sales	$ 176,454	$ 161,624	$ 573,553	$ 431,867
Cost of sales:
Cost of product (excluding amortization)	45,484	32,462	140,999	83,859
Amortization of patent formulations	1,142	1,680	5,091	6,399
Total cost of sales	46,626	34,142	146,090	90,258
Gross profit	129,828	127,482	427,463	341,609
Operating expenses:
Selling, general, and administrative	30,807	30,257	79,232	75,323
Amortization of other intangibles	10,329	10,182	30,890	30,547
Total operating expenses	41,136	40,439	110,122	105,870
Operating income	88,692	87,043	317,341	235,739
Interest expense	(10,499)	(14,987)	(30,653)	(46,052)
Other expense, net
Loss on extinguishment of debt	0	0	(18,803)	0
Other expense, net	(2,251)	(213)	(3,852)	(417)
Total other expense, net	(2,251)	(213)	(22,655)	(417)
Income before provision for income taxes	75,942	71,843	264,033	189,270
Income tax provision	15,179	15,252	53,594	37,797
Net income	$ 60,763	$ 56,591	$ 210,439	$ 151,473
Net income per share:
Net income per share: Basic (in usd per share)	$ 0.09	$ 0.09	$ 0.32	$ 0.23
Net income per share: Diluted (in usd per share)	$ 0.09	$ 0.08	$ 0.30	$ 0.22
Weighted average common shares outstanding:
Weighted average common shares outstanding: Basic (in shares)	649,099,780	648,124,642	648,963,625	648,082,081
Weighted average common shares outstanding: Diluted (in shares)	691,257,654	690,711,782	691,585,787	689,108,272
Other comprehensive income:
Unrealized gain on derivatives, net of income tax effect	$ 1,931	$ 0	$ 1,931	$ 0
Total other comprehensive income:	1,931	0	1,931	0
Total comprehensive income:	$ 62,694	$ 56,591	$ 212,370	$ 151,473

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid in Capital	Accumulated Other Comprehensive Income	Retained Earnings
Beginning balance, shares outstanding (in shares) at Dec. 31, 2020		647,888,387
Beginning balance at Dec. 31, 2020	$ 530,673	$ 648	$ 530,025	$ 0	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	45,531				45,531
Issuance of common stock (in shares)		236,255
Issuance of common stock	633		633
Share-based compensation expense	627		627
Ending balance, shares outstanding (in shares) at Mar. 31, 2021		648,124,642
Ending balance at Mar. 31, 2021	577,464	$ 648	531,285	0	45,531
Beginning balance, shares outstanding (in shares) at Dec. 31, 2020		647,888,387
Beginning balance at Dec. 31, 2020	530,673	$ 648	530,025	0	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	151,473
Unrealized gain on derivatives, net of income tax effect	0
Ending balance, shares outstanding (in shares) at Sep. 30, 2021		648,124,642
Ending balance at Sep. 30, 2021	453,005	$ 648	300,884	0	151,473
Beginning balance, shares outstanding (in shares) at Mar. 31, 2021		648,124,642
Beginning balance at Mar. 31, 2021	577,464	$ 648	531,285	0	45,531
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	49,351				49,351
Share-based compensation expense	547		547
Ending balance, shares outstanding (in shares) at Jun. 30, 2021		648,124,642
Ending balance at Jun. 30, 2021	627,362	$ 648	531,832	0	94,882
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	56,591				56,591
Tax receivable agreement	(232,893)		(232,893)
Share-based compensation expense	1,945		1,945
Unrealized gain on derivatives, net of income tax effect	0
Ending balance, shares outstanding (in shares) at Sep. 30, 2021		648,124,642
Ending balance at Sep. 30, 2021	453,005	$ 648	300,884	0	151,473
Beginning balance, shares outstanding (in shares) at Dec. 31, 2021		648,794,041
Beginning balance at Dec. 31, 2021	524,298	$ 648	302,866	0	220,784
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	61,961				61,961
Conversion of cash-settled units to stock-settled stock appreciation rights	1,632		1,632
Exercise of stock-settled stock appreciation rights (in shares)		117,180
Exercise of stock-settled stock appreciation rights	348		348
Shares withheld and retired for taxes on exercise of stock settled appreciation rights (in shares)		(55,244)
Shares withheld and retired on exercise of stock-settled stock appreciation rights	(920)		(920)
Share-based compensation expense	1,696		1,696
Ending balance, shares outstanding (in shares) at Mar. 31, 2022		648,855,977
Ending balance at Mar. 31, 2022	589,015	$ 648	305,622	0	282,745
Beginning balance, shares outstanding (in shares) at Dec. 31, 2021		648,794,041
Beginning balance at Dec. 31, 2021	524,298	$ 648	302,866	0	220,784
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	$ 210,439
Exercise of stock-settled stock appreciation rights (in shares)	117,180
Exercise of stock options (in shares)	256,846
Shares withheld and retired for taxes on exercise of stock settled appreciation rights (in shares)	(55,244)
Unrealized gain on derivatives, net of income tax effect	$ 1,931
Ending balance, shares outstanding (in shares) at Sep. 30, 2022		649,112,823
Ending balance at Sep. 30, 2022	743,996	$ 649	310,193	1,931	431,223
Beginning balance, shares outstanding (in shares) at Mar. 31, 2022		648,855,977
Beginning balance at Mar. 31, 2022	589,015	$ 648	305,622	0	282,745
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	87,715				87,715
Exercise of stock options (in shares)		231,846
Exercise of stock options	740	$ 1	739
Share-based compensation expense	1,727		1,727
Ending balance, shares outstanding (in shares) at Jun. 30, 2022		649,087,823
Ending balance at Jun. 30, 2022	679,197	$ 649	308,088	0	370,460
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	60,763				60,763
Exercise of stock options (in shares)		25,000
Exercise of stock options	74	$ 0	74
Share-based compensation expense	2,031		2,031
Unrealized gain on derivatives, net of income tax effect	1,931			1,931
Ending balance, shares outstanding (in shares) at Sep. 30, 2022		649,112,823
Ending balance at Sep. 30, 2022	$ 743,996	$ 649	$ 310,193	$ 1,931	$ 431,223

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities:
Net income	$ 210,439	$ 151,473
Adjustments to reconcile net income to net cash from operations provided by operating activities:
Amortization of patent formulations	5,091	6,399
Amortization of other intangibles	30,890	30,547
Inventory write-off and disposal	5,958	0
Depreciation of fixed assets	233	87
Amortization of debt issuance costs	2,955	2,084
Deferred taxes	(4,532)	3,852
Share-based compensation expense	5,454	3,119
Loss on extinguishment of debt	18,803	0
Other operating	147	0
Changes in operating assets and liabilities, net of effects of acquisition (as applicable):
Accounts receivable, net	(52,507)	(44,906)
Inventory	(57,132)	(35,090)
Other current assets	6,344	(5,760)
Accounts payable	3,959	9,165
Accrued expenses and other current liabilities	14,283	9,355
Other assets/liabilities	(8,578)	0
Net cash provided by operating activities	181,807	130,325
Cash flows from investing activities:
Purchase of property and equipment	(100)	(859)
Purchase of software	(1,612)	0
Purchase of investment in nonconsolidated entity	0	(4,500)
Net cash used in investing activities	(1,712)	(5,359)
Cash flows from financing activities:
Proceeds from the issuance of stock	0	633
Proceeds from exercise of stock options	814	0
Payments for shares withheld and retired for taxes and exercise price for stock-settled stock appreciation rights	(572)	0
Principal payments for 2022 Term Loan Facility, and principal payments and prepayment fees for 2020 Term Loan Facility	(780,382)	(15,084)
Proceeds from the issuance of 2022 Term Loan Facility	675,000	0
Payments of debt issuance costs	(11,944)	0
Net cash used in financing activities	(117,084)	(14,451)
Net increase in cash and cash equivalents	63,011	110,515
Cash and cash equivalents - beginning of period	186,388	10,964
Cash and cash equivalents - end of period	249,399	121,479
Supplemental disclosure of cash flow information:
Cash paid for income taxes	54,904	16,105
Cash paid during the year for interest	21,716	43,968
Cash paid during the year for offering and strategic transition costs	0	3,840
Supplemental disclosure of noncash activities:
Public offering and strategic transition costs included in accounts payable and accrued expenses	0	4,542
Increase in related party payable related to the tax receivable agreement	0	232,893
Cash-settled units liability reclassification to additional paid in capital	$ 1,632	$ 0

NATURE OF OPERATIONS AND BASIS

NATURE OF OPERATIONS AND BASIS OF PRESENTATION	9 Months Ended
	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
NATURE OF OPERATIONS AND BASIS OF PRESENTATION	NATURE OF OPERATIONS AND BASIS OF PRESENTATION Olaplex Holdings, Inc. (“Olaplex Holdings” and, together with its subsidiaries, the “Company” or “we”) is a Delaware corporation that was incorporated on June 8, 2021 for the purpose of facilitating an initial public offering and to enter into the other related Reorganization Transactions, as described below, in order to carry on the business of Penelope Holdings Corp. (“Penelope”), together with its subsidiaries. Olaplex Holdings is organized as a holding company and operates indirectly through its wholly owned subsidiaries, Penelope and Olaplex, Inc., which conducts business under the name “Olaplex”. Olaplex is an innovative, science-enabled, technology-driven beauty company that is focused on delivering its patent-protected premium hair care products to professional hair salons, retailers and everyday consumers. Olaplex develops, manufactures and distributes a suite of hair care products strategically developed to address three key uses: treatment, maintenance and protection. In January 2020, a group of third-party investors, through Penelope, acquired 100% of the Olaplex, LLC business, including the intellectual property operations of another affiliated business, LIQWD, Inc. (the “Olaplex business”), from the owners of the Olaplex business for $1,381,582 (the “Acquisition”). Subsequent to the Acquisition, all of the operations of Olaplex are comprised of the operations of Olaplex, Inc. In these financial statements, the term “Olaplex” is used to refer to either the operations of the business prior or after the Acquisition and prior to and after the initial public offering and Reorganization Transactions, in each case as discussed below, depending on the respective period discussed. Initial Public Offering On October 4, 2021, Olaplex Holdings completed an initial public offering of shares of its common stock (the “IPO”). See “Item 8. Financial Statements – Note 1. Nature of Operations and Basis of Presentation – Initial Public Offering” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”) for additional details on the IPO. Reorganization Transactions Prior to the IPO, Penelope Group Holdings, L.P. was the direct parent of Penelope, which is the indirect parent of Olaplex, Inc., the Company’s primary operating subsidiary. In connection with the IPO, the Company completed a series of transactions (collectively, the “Reorganization Transactions”) pursuant to which all outstanding units of Penelope Group Holdings, L.P. were exchanged for an aggregate of 648,124,642 shares of common stock of Olaplex Holdings, Inc., and the options and cash-settled units of Penelope were converted into options and cash-settled units of Olaplex Holdings, Inc. See “Item 8. Financial Statements – Note 1. Nature of Operations and Basis of Presentation – Reorganization Transactions” in the Company’s 2021 Form 10-K for additional details on the Reorganization Transactions that were completed in connection with the IPO. Basis of Presentation The accompanying unaudited interim Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim Condensed Consolidated Financial Statements furnished reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the full fiscal year. The unaudited interim Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and accompanying footnotes included in the Company’s 2021 Form 10-K. The financial statements for prior periods give effect to the Reorganization Transactions as referred in the 2021 Form 10-K. All share and earnings per share amounts presented herein have been retroactively adjusted to give effect to the Reorganization Transactions as if they occurred in all prior periods presented. For the periods prior to the Reorganization Transactions, Penelope and its subsidiaries, including Olaplex, Inc., are consolidated in the unaudited interim Condensed Consolidated Financial Statements of the Company.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Estimates and Assumptions Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Examples of estimates and assumptions include: for revenue recognition, determining the nature and timing of satisfaction of performance obligations, variable consideration, and other obligations such as product returns and refunds; loss contingencies; the fair value of share-based options and stock settled rights; the fair value of and/or potential impairment of goodwill and intangible assets for our reporting unit; the fair value of our interest rate cap; useful lives of our tangible and intangible assets; allowance for promotions; estimated income tax and tax receivable payments; the net realizable value of, and demand for our inventory. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance for fair value measurements established a framework for measuring fair value and established a three-level valuation hierarchy for disclosure of fair value measurements as follows: Level 1 —Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. The Company’s Level 1 assets consist of its marketable securities. Level 2 —Observable quoted prices for similar assets or liabilities in active markets and observable quoted prices for identical assets or liabilities in markets that are not active. Level 3 —Unobservable inputs that are not corroborated by market data. Cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are reflected at carrying value, which approximates fair value due to the short-term maturity. The Company’s long-term debt is recorded at its carrying value in the Consolidated Balance Sheets, which may differ from fair value. The Company’s interest rate cap is recorded at its Level 3 fair value in the Condensed Consolidated Balance Sheets. Accounting Policies The Company entered into an interest rate cap transaction during the quarter ended September 30, 2022. See further discussion of this transaction in “Note 8 – Long-Term Debt – Interest Rate Cap Transaction”. As a result, the Company has updated its accounting policies to include a policy on derivative instruments and hedging, per below: Accounting Policy for Derivative Instruments and Hedging Activities The Company records all derivatives on the balance sheet at fair value in accordance with FASB Accounting Standards Codification (“ASC”) ASC 815, “Derivatives and Hedging”. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative as a hedge and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk (in a fair value hedge) or the earnings effect of the hedged forecasted transactions (in a cash flow hedge). The Company may enter into derivative contracts that are intended to economically hedge certain of its risks, even though hedge accounting does not apply or the Company otherwise elects not to apply hedge accounting. Constructive Retirement of Common Stock Repurchases When the Company's common stock is retired or purchased for constructive retirement for net share settlement of stock options, any excess purchase price over par value is allocated between additional paid-in-capital, to the extent that previous net gains from sales or retirements are included therein, and the remainder to retained earnings. Tax Receivable Agreement As part of the IPO, we entered into the Tax Receivable Agreement under which generally we will be required to pay to the former limited partners of Penelope Group Holdings, L.P. and the holders of options to purchase shares of common stock of Penelope that were vested prior to the Reorganization Transactions (collectively, the “Pre-IPO Stockholders”), 85% of the cash savings, if any, in U.S. federal, state or local tax that we actually realize on our taxable income following the IPO (or are deemed to realize in certain circumstances) as a result of certain existing tax attributes, including tax basis in intangible assets and capitalized transaction costs relating to taxable years ending on or before the date of the IPO (calculated by assuming the taxable year of the relevant entity closes on the date of the IPO), that are amortizable over a fixed period of time (including in tax periods beginning after the IPO) and which are available to us and our wholly-owned subsidiaries, and interest accrued at a rate equal to LIBOR (“London Interbank Offered Rate”) (or if LIBOR ceases to be published, a replacement rate with similar characteristics) plus 3% from the date the applicable tax return is due (without extension) until paid. Under the Tax Receivable Agreement, generally we will retain the benefit of the remaining 15% of the applicable tax savings. Recently Adopted Accounting Pronouncements The Company is an “emerging growth company” and as an emerging growth company, the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that the Company (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the Company’s financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies. In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842).” The guidance in this ASU supersedes the leasing guidance in “Leases (Topic 840).” Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for Company fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company adopted this accounting standard on January 1, 2022. Adoption of this standard did not have a material impact on its Condensed Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This ASU provides an optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates (“IBORs”) and, particularly, the risk of cessation of the LIBOR, regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. The ASU provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. The ASU can be adopted no later than December 31, 2022 with early adoption permitted. The Company adopted this accounting standard on January 1, 2022. Adoption of this standard did not have a material impact on its Condensed Consolidated Financial Statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The amendments in this ASU, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking

NET SALES

NET SALES	9 Months Ended
	Sep. 30, 2022
Revenue from Contract with Customer [Abstract]
NET SALES	NET SALES The Company distributes products in the U.S. and internationally through professional distributors in the salon channel, directly to retailers for sale in their physical stores and e-commerce sites, and direct-to-consumer (“DTC”) through sales to pure-play e-commerce customers and through its own Olaplex.com websites. As such, the Company’s three business channels consist of professional, specialty retail and DTC as follows: For the Three Months Ended For the Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Net sales by Channel: Professional $ 62,991 $ 74,978 $ 245,539 $ 201,855 Specialty retail 74,191 46,343 202,692 116,201 DTC 39,272 40,303 125,322 113,811 Total Net sales $ 176,454 $ 161,624 $ 573,553 $ 431,867 Revenue by major geographic region is based upon the geographic location of customers who purchase our products, however the majority of net sales are transacted in U.S. Dollars, the Company’s functional and reporting currency. During the three and nine months ended September 30, 2022 and September 30, 2021, our net sales to consumers in the United States and International regions were as follows: For the Three Months Ended For the Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Net sales by Geography: United States $ 89,543 $ 93,611 $ 330,973 $ 252,224 International 86,911 68,013 242,580 179,643 Total Net sales $ 176,454 $ 161,624 $ 573,553 $ 431,867 United Kingdom (“U.K.”) net sales for the three and nine months ended September 30, 2022 were 13% and 10% of total net sales, respectively, and net sales for the three and nine months ended September 30, 2021 were 15% of total net sales. No other International country exceeds 10% of total net sales.

INVENTORY

INVENTORY	9 Months Ended
	Sep. 30, 2022
Inventory Disclosure [Abstract]
INVENTORY	INVENTORY Inventory as of September 30, 2022 and December 31, 2021 consisted of the following: September 30, 2022 December 31, 2021 Raw materials $ 37,173 $ 20,852 Finished goods 114,110 77,547 Inventory $ 151,283 $ 98,399

INVESTMENT IN NONCONSOLIDATED E

INVESTMENT IN NONCONSOLIDATED ENTITY	9 Months Ended
	Sep. 30, 2022
Equity Method Investments and Joint Ventures [Abstract]
INVESTMENT IN NONCONSOLIDATED ENTITY	INVESTMENT IN NONCONSOLIDATED ENTITY Our investment in and advances to our nonconsolidated entity as of September 30, 2022 and December 31, 2021 represents our investment in a limited liability company. We do not control or have significant influence over the operating and financial policies of this entity. We account for this investment using the cost method and adjust only for other than temporary declines in fair value, additional investments, plus or minus changes from observable price changes in orderly transactions or distributions deemed to be a return of capital. Our investment is classified as a long-term asset and included in Other assets in our Condensed Consolidated Balance Sheet and consists of the following: September 30, 2022 December 31, 2021 Capital contributions, net of distributions and impairments $ 4,500 $ 4,500 Total investments in and advances to nonconsolidated entity $ 4,500 $ 4,500

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS	9 Months Ended
	Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
GOODWILL AND INTANGIBLE ASSETS	GOODWILL AND INTANGIBLE ASSETS Goodwill and intangible assets are comprised of the following: September 30, 2022 Estimated Gross Carrying Accumulated Net Carrying Amount Brand name 25 years $ 952,000 $ (103,874) $ 848,126 Product formulations 15 years 136,000 (24,732) 111,268 Customer relationships 20 years 53,000 (7,228) 45,772 Software 3 years 2,503 (402) 2,101 Total finite-lived intangibles 1,143,503 (136,236) 1,007,267 Goodwill Indefinite 168,300 — 168,300 Total goodwill and other intangibles $ 1,311,803 $ (136,236) $ 1,175,567 December 31, 2021 Estimated Gross Accumulated Net Carrying Amount Brand name 25 years $ 952,000 $ (75,314) $ 876,686 Product formulations 15 years 136,000 (17,932) 118,068 Customer relationships 20 years 53,000 (5,241) 47,759 Software 3 years 890 (59) 831 Total finite-lived intangibles 1,141,890 (98,546) 1,043,344 Goodwill Indefinite 168,300 — 168,300 Total goodwill and other intangibles $ 1,310,190 $ (98,546) $ 1,211,644 The amortization of the Company’s brand name, customer relationships and software is recorded to Amortization of other intangible assets in the Condensed Consolidated Statements of Operations and Comprehensive Income. A portion of Amortization of patented formulations is capitalized to Inventory in the Condensed Consolidated Balance Sheets, and the remainder is recorded to Amortization of patented formulations in the Condensed Consolidated Statements of Operations and Comprehensive Income. Amortization of the Company’s definite-lived intangible assets for the three and nine month periods ended September 30, 2022 and 2021 is as follows: For the Three Months Ended For the Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Amortization of patented formulations $ 1,142 $ 1,680 $ 5,091 $ 6,399 Amortization expense, brand name and customer relationships 10,182 10,182 30,547 30,547 Amortization expense, software 147 — 343 — Amortization of other intangible assets 10,329 10,182 30,890 30,547 Amortization of patented formulations capitalized to inventory $ 1,125 $ 587 $ 1,709 $ 401

ACCRUED EXPENSES AND OTHER CURR

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES	9 Months Ended
	Sep. 30, 2022
Payables and Accruals [Abstract]
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES	ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses as of September 30, 2022 and December 31, 2021 consisted of the following: September 30, 2022 December 31, 2021 Accrued interest $ 8,344 $ — Deferred revenue 4,890 5,022 Accrued freight 4,823 636 Payroll liabilities 4,418 6,302 Accrued other 3,556 5,372 Accrued expenses and other current liabilities $ 26,031 $ 17,332

LONG-TERM DEBT

LONG-TERM DEBT	9 Months Ended
	Sep. 30, 2022
Debt Disclosure [Abstract]
LONG-TERM DEBT	LONG-TERM DEBT The Company’s Long-Term Debt as of September 30, 2022 and December 31, 2021 consisted of the following: September 30, 2022 December 31, 2021 Long-term debt Credit Agreement, dated as of February 23, 2022 (the “2022 Credit Agreement”) (1) $675 Million 7-Year Senior Secured Term Loan Facility (the “2022 Term Loan Facility”) $ 671,626 $ — $150 Million 5-Year Senior Secured Revolving Credit Facility (the “2022 Revolver”) (2) — — Credit Agreement, dated as of January 8, 2020, as amended (the “2020 Credit Agreement”) (1) $800 Million 6-Year Senior Secured Term Loan Facility, as amended (the “2020 Term Loan Facility”) — 769,235 $51 Million 5-Year Senior Secured Revolving Credit Facility, as amended (the “2020 Revolver”) (2) — — Debt issuance costs (9,214) (11,033) Total term loan debt 662,412 758,202 Less: Current portion (6,750) (20,112) Long-term debt, net of debt issuance costs and current portion $ 655,662 $ 738,090 (1) The 2022 Credit Agreement refinanced and replaced the 2020 Credit Agreement. (2) As of September 30, 2022 and December 31, 2021, the Company did not have outstanding draws on the 2022 Revolver or 2020 Revolver, respectively, including letters of credit and swingline loan sub-facilities. As of September 30, 2022, the Company had $150 million of available borrowing capacity under the 2022 Revolver. The interest rate on outstanding debt under the 2022 Term Loan Facility was 6.1% as of September 30, 2022, and the interest rate on outstanding debt under the 2020 Term Loan Facility was 7.5% as of December 31, 2021. The interest rates for all facilities under the 2022 and 2020 Credit Agreements were calculated based upon the Company’s election between the applicable published reference rate at time of election plus an additional interest rate spread, or an “Alternate Base Rate” (as defined in the 2022 Credit Agreement or the 2020 Credit Agreement, as applicable) plus an additional interest rate spread. Interest expense, inclusive of debt amortization, was $10,499 and $30,653 for the three and nine months ended September 30, 2022, respectively, and $14,987 and $46,052 for the three and nine months ended September 30, 2021, respectively. The 2022 Credit Agreement includes, and the 2020 Credit Agreement included, reporting, financial, and maintenance covenants that require, among other things, for the Company to comply with certain maximum secured leverage ratios, which the Company was in compliance with on September 30, 2022 and December 31, 2021. Substantially all the assets of the Company constitute collateral under the 2022 Credit Agreement. The fair value of the Company’s long-term debt is based on the market value of our long-term debt instrument. Based on the inputs used to value the long-term debt, the Company’s long-term debt is categorized within Level 2 in the fair value hierarchy. As of September 30, 2022, the carrying amount of the Company’s long-term debt under the 2022 Credit Agreement was $662.4 million, and the fair value of the Company’s long-term debt was $646.4 million. As of December 31, 2021, the carrying amount of the Company’s long-term debt under the 2020 Credit Agreement approximated its fair value, as the stated rate approximated market rates for loans with similar terms. Interest Rate Cap Transaction The Company’s results are subject to risk from interest rate fluctuations on borrowings under the 2022 Credit Agreement, including the 2022 Term Loan Facility. The Company may, from time to time, utilize interest rate derivatives in an effort to add stability to interest expense and to manage its exposure to interest rate movements. On August 11, 2022, the Company entered into an interest rate cap transaction (the “interest rate cap”) in connection with the 2022 Term Loan Facility, with a notional amount of $400 million. Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate applicable to the transaction, in exchange for an up-front premium paid by the Company. The Company has designated the interest rate cap as a cash-flow hedge for accounting purposes. For derivatives designated, and that qualify, as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings, as documented at hedge inception in accordance with the Company’s accounting policy election. The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021. Asset Derivatives September 30, 2022 December 31, 2021 Interest rate cap Balance Sheet Caption Other Assets $ 4,357 $ — During the three and nine months ended September 30, 2022, the Company’s interest rate cap generated an unrecognized pre-tax gain of $2.4 million, recorded in Accumulated Other Comprehensive Income on the Company’s Condensed Consolidated Balance Sheets. The Company also recognized Interest expense of $0.1 million related to amortization of the interest rate cap premium paid by the Company in connection with the interest rate cap. The Company did not have an interest rate cap agreement in place during the three and nine months ended September 30, 2021. The Company performed an initial effectiveness assessment on the interest rate cap, and determined it to be an effective hedge of the cash flows related to the interest rate payments on the 2022 Term Loan Facility. The hedge is being evaluated qualitatively on a quarterly basis for effectiveness. Changes in fair value are recorded in Accumulated Other Comprehensive Income and periodic settlements of the interest rate cap will be recorded in interest expense along with the interest on amounts outstanding under the 2022 Term Loan Facility. Payment of the up-front premium of the interest rate cap is included within Other assets/liabilities within cash flows from operating activities on the Company’s Condensed Consolidated Statements of Cash Flows. The Company does not hold or issue derivative financial instruments for trading purposes, nor does it hold or issue leveraged derivative instruments. By using derivative financial instruments to hedge exposures to interest rate fluctuations, the Company exposes itself to counterparty credit risk. The Company manages exposure to counterparty credit risk by entering into derivative financial instruments with highly rated institutions that can be expected to fully perform under the terms of the applicable contracts.

EQUITY

EQUITY	9 Months Ended
	Sep. 30, 2022
Equity [Abstract]
EQUITY	EQUITYDuring the nine months ended September 30, 2022, the Company converted 886,950 of cash-settled units into net stock-settled stock appreciation rights (“SARs”), with a fair value liability of $1,632 reclassified to additional paid-in capital. The Company issued 117,180 shares of its common stock upon vesting and settlement of the converted SARs. The Company repurchased 55,244 of outstanding shares of its common stock for the net settlement of SARs for payment of taxes related to such SARs, that were accounted for as a share retirement. Additionally, the Company issued 256,846 shares of its common stock as a result of stock options exercised during the nine months ended September 30, 2022

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	9 Months Ended
	Sep. 30, 2022
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	RELATED PARTY TRANSACTIONS In July 2020, the Company entered into an agreement with CI&T, an information technology and software company, in which certain investment funds affiliated with Advent International Corporation (the “Advent Funds”) hold a greater than 10% equity interest. During the three and nine months ended September 30, 2022, the Company paid CI&T $153 and $179, respectively. During the three and nine months ended September 30, 2021, the Company paid CI&T $30 and $189 respectively, for services related to the development, maintenance and enhancement of the Olaplex professional application, all of which were negotiated on market terms. Tax Receivable Agreement In connection with the Reorganization, the Company entered into the Tax Receivable Agreement with the Pre-IPO Stockholders. See further discussion in “Note 2 – Summary of Significant Accounting Policies – Tax Receivable Agreement”. During the three and nine months ended September 30, 2022, the Company made a payment to the Pre-IPO Stockholders of $4.2 million as required pursuant to the terms of the Tax Receivable Agreement.

CONTINGENCIES

CONTINGENCIES	9 Months Ended
	Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
CONTINGENCIES	CONTINGENCIES From time to time, the Company is subject to various legal actions arising in the ordinary course of business. The Company cannot predict with reasonable assurance the outcome of these legal actions brought against us as they are subject to uncertainties. Accordingly, any settlement or resolution in these legal actions may occur and affect our net income in such period as the settlement or resolution. As of September 30, 2022 and December 31, 2021, the Company was not subject to any pending legal matters or claims that could have a material adverse effect on its financial position, results of operations, or cash flows should such litigation be resolved unfavorably.

NET INCOME PER SHARE

NET INCOME PER SHARE	9 Months Ended
	Sep. 30, 2022
Earnings Per Share [Abstract]
NET INCOME PER SHARE	NET INCOME PER SHARE The following is a reconciliation of the numerator and denominator in the basic and diluted net income per common share computations: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Numerator: Net Income $ 60,763 $ 56,591 $ 210,439 $ 151,473 Denominator: Weighted average common shares outstanding – basic 649,099,780 648,124,642 648,963,625 648,082,081 Dilutive common equivalent shares from equity options 42,157,874 42,587,140 42,622,162 41,026,191 Weighted average common shares outstanding – diluted 691,257,654 690,711,782 691,585,787 689,108,272 Net income per share: Basic $ 0.09 $ 0.09 $ 0.32 $ 0.23 Diluted $ 0.09 $ 0.08 $ 0.30 $ 0.22

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited interim Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim Condensed Consolidated Financial Statements furnished reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the full fiscal year. The unaudited interim Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and accompanying footnotes included in the Company’s 2021 Form 10-K. The financial statements for prior periods give effect to the Reorganization Transactions as referred in the 2021 Form 10-K. All share and earnings per share amounts presented herein have been retroactively adjusted to give effect to the Reorganization Transactions as if they occurred in all prior periods presented. For the periods prior to the Reorganization Transactions, Penelope and its subsidiaries, including Olaplex, Inc., are consolidated in the unaudited interim Condensed Consolidated Financial Statements of the Company.
Estimates and Assumptions	Estimates and Assumptions Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Examples of estimates and assumptions include: for revenue recognition, determining the nature and timing of satisfaction of performance obligations, variable consideration, and other obligations such as product returns and refunds; loss contingencies; the fair value of share-based options and stock settled rights; the fair value of and/or potential impairment of goodwill and intangible assets for our reporting unit; the fair value of our interest rate cap; useful lives of our tangible and intangible assets; allowance for promotions; estimated income tax and tax receivable payments; the net realizable value of, and demand for our inventory. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties.
Fair Value of Financial Instruments	Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance for fair value measurements established a framework for measuring fair value and established a three-level valuation hierarchy for disclosure of fair value measurements as follows: Level 1 —Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. The Company’s Level 1 assets consist of its marketable securities. Level 2 —Observable quoted prices for similar assets or liabilities in active markets and observable quoted prices for identical assets or liabilities in markets that are not active. Level 3 —Unobservable inputs that are not corroborated by market data. Cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are reflected at carrying value, which approximates fair value due to the short-term maturity. The Company’s long-term debt is recorded at its carrying value in the Consolidated Balance Sheets, which may differ from fair value. The Company’s interest rate cap is recorded at its Level 3 fair value in the Condensed Consolidated Balance Sheets.
Accounting Policy for Derivative Instruments and Hedging Activities	Accounting Policy for Derivative Instruments and Hedging Activities The Company records all derivatives on the balance sheet at fair value in accordance with FASB Accounting Standards Codification (“ASC”) ASC 815, “Derivatives and Hedging”. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative as a hedge and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk (in a fair value hedge) or the earnings effect of the hedged forecasted transactions (in a cash flow hedge). The Company may enter into derivative contracts that are intended to
Constructive Retirement of Common Stock Repurchases	Constructive Retirement of Common Stock Repurchases When the Company's common stock is retired or purchased for constructive retirement for net share settlement of stock options, any excess purchase price over par value is allocated between additional paid-in-capital, to the extent that previous net gains from sales or retirements are included therein, and the remainder to retained earnings.
Tax Receivable Agreement	Tax Receivable Agreement As part of the IPO, we entered into the Tax Receivable Agreement under which generally we will be required to pay to the former limited partners of Penelope Group Holdings, L.P. and the holders of options to purchase shares of common stock of Penelope that were vested prior to the Reorganization Transactions (collectively, the “Pre-IPO Stockholders”), 85% of the cash savings, if any, in U.S. federal, state or local tax that we actually realize on our taxable income following the IPO (or are deemed to realize in certain circumstances) as a result of certain existing tax attributes, including tax basis in intangible assets and capitalized transaction costs relating to taxable years ending on or before the date of the IPO (calculated by assuming the taxable year of the relevant entity closes on the date of the IPO), that are amortizable over a fixed period of time (including in tax periods beginning after the IPO) and which are available to us and our wholly-owned subsidiaries, and interest accrued at a rate equal to LIBOR (“London Interbank Offered Rate”) (or if LIBOR ceases to be published, a replacement rate with similar characteristics) plus 3% from the date the applicable tax return is due (without extension) until paid. Under the Tax Receivable Agreement, generally we will retain the benefit of the remaining 15% of the applicable tax savings.
Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncement not yet Adopted	Recently Adopted Accounting Pronouncements The Company is an “emerging growth company” and as an emerging growth company, the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that the Company (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the Company’s financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies. In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842).” The guidance in this ASU supersedes the leasing guidance in “Leases (Topic 840).” Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for Company fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company adopted this accounting standard on January 1, 2022. Adoption of this standard did not have a material impact on its Condensed Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This ASU provides an optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates (“IBORs”) and, particularly, the risk of cessation of the LIBOR, regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. The ASU provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. The ASU can be adopted no later than December 31, 2022 with early adoption permitted. The Company adopted this accounting standard on January 1, 2022. Adoption of this standard did not have a material impact on its Condensed Consolidated Financial Statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The amendments in this ASU, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking

NET SALES (Tables)

NET SALES (Tables)	9 Months Ended
	Sep. 30, 2022
Revenue from Contract with Customer [Abstract]
Disaggregation of Revenue	As such, the Company’s three business channels consist of professional, specialty retail and DTC as follows: For the Three Months Ended For the Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Net sales by Channel: Professional $ 62,991 $ 74,978 $ 245,539 $ 201,855 Specialty retail 74,191 46,343 202,692 116,201 DTC 39,272 40,303 125,322 113,811 Total Net sales $ 176,454 $ 161,624 $ 573,553 $ 431,867 For the Three Months Ended For the Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Net sales by Geography: United States $ 89,543 $ 93,611 $ 330,973 $ 252,224 International 86,911 68,013 242,580 179,643 Total Net sales $ 176,454 $ 161,624 $ 573,553 $ 431,867

INVENTORY (Tables)

INVENTORY (Tables)	9 Months Ended
	Sep. 30, 2022
Inventory Disclosure [Abstract]
Schedule of Inventory, Current	Inventory as of September 30, 2022 and December 31, 2021 consisted of the following: September 30, 2022 December 31, 2021 Raw materials $ 37,173 $ 20,852 Finished goods 114,110 77,547 Inventory $ 151,283 $ 98,399

INVESTMENT IN NONCONSOLIDATED_2

INVESTMENT IN NONCONSOLIDATED ENTITY (Tables)	9 Months Ended
	Sep. 30, 2022
Equity Method Investments and Joint Ventures [Abstract]
Equity Securities without Readily Determinable Fair Value	Our investment is classified as a long-term asset and included in Other assets in our Condensed Consolidated Balance Sheet and consists of the following: September 30, 2022 December 31, 2021 Capital contributions, net of distributions and impairments $ 4,500 $ 4,500 Total investments in and advances to nonconsolidated entity $ 4,500 $ 4,500

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS (Tables)	9 Months Ended
	Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Intangible Assets and Goodwill	Goodwill and intangible assets are comprised of the following: September 30, 2022 Estimated Gross Carrying Accumulated Net Carrying Amount Brand name 25 years $ 952,000 $ (103,874) $ 848,126 Product formulations 15 years 136,000 (24,732) 111,268 Customer relationships 20 years 53,000 (7,228) 45,772 Software 3 years 2,503 (402) 2,101 Total finite-lived intangibles 1,143,503 (136,236) 1,007,267 Goodwill Indefinite 168,300 — 168,300 Total goodwill and other intangibles $ 1,311,803 $ (136,236) $ 1,175,567 December 31, 2021 Estimated Gross Accumulated Net Carrying Amount Brand name 25 years $ 952,000 $ (75,314) $ 876,686 Product formulations 15 years 136,000 (17,932) 118,068 Customer relationships 20 years 53,000 (5,241) 47,759 Software 3 years 890 (59) 831 Total finite-lived intangibles 1,141,890 (98,546) 1,043,344 Goodwill Indefinite 168,300 — 168,300 Total goodwill and other intangibles $ 1,310,190 $ (98,546) $ 1,211,644
Finite-Lived Intangible Assets Amortization Expense	Amortization of the Company’s definite-lived intangible assets for the three and nine month periods ended September 30, 2022 and 2021 is as follows: For the Three Months Ended For the Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Amortization of patented formulations $ 1,142 $ 1,680 $ 5,091 $ 6,399 Amortization expense, brand name and customer relationships 10,182 10,182 30,547 30,547 Amortization expense, software 147 — 343 — Amortization of other intangible assets 10,329 10,182 30,890 30,547 Amortization of patented formulations capitalized to inventory $ 1,125 $ 587 $ 1,709 $ 401

ACCRUED EXPENSES AND OTHER CU_2

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)	9 Months Ended
	Sep. 30, 2022
Payables and Accruals [Abstract]
Schedule of Accrued Expenses and Other Current Liabilities	Accrued expenses as of September 30, 2022 and December 31, 2021 consisted of the following: September 30, 2022 December 31, 2021 Accrued interest $ 8,344 $ — Deferred revenue 4,890 5,022 Accrued freight 4,823 636 Payroll liabilities 4,418 6,302 Accrued other 3,556 5,372 Accrued expenses and other current liabilities $ 26,031 $ 17,332

LONG-TERM DEBT (Tables)

LONG-TERM DEBT (Tables)	9 Months Ended
	Sep. 30, 2022
Debt Disclosure [Abstract]
Schedule of Long-term Debt Instruments	The Company’s Long-Term Debt as of September 30, 2022 and December 31, 2021 consisted of the following: September 30, 2022 December 31, 2021 Long-term debt Credit Agreement, dated as of February 23, 2022 (the “2022 Credit Agreement”) (1) $675 Million 7-Year Senior Secured Term Loan Facility (the “2022 Term Loan Facility”) $ 671,626 $ — $150 Million 5-Year Senior Secured Revolving Credit Facility (the “2022 Revolver”) (2) — — Credit Agreement, dated as of January 8, 2020, as amended (the “2020 Credit Agreement”) (1) $800 Million 6-Year Senior Secured Term Loan Facility, as amended (the “2020 Term Loan Facility”) — 769,235 $51 Million 5-Year Senior Secured Revolving Credit Facility, as amended (the “2020 Revolver”) (2) — — Debt issuance costs (9,214) (11,033) Total term loan debt 662,412 758,202 Less: Current portion (6,750) (20,112) Long-term debt, net of debt issuance costs and current portion $ 655,662 $ 738,090 (1) The 2022 Credit Agreement refinanced and replaced the 2020 Credit Agreement. (2) As of September 30, 2022 and December 31, 2021, the Company did not have outstanding draws on the 2022 Revolver or 2020 Revolver, respectively, including letters of credit and swingline loan sub-facilities. As of September 30, 2022, the Company had $150 million of available borrowing capacity under the 2022 Revolver.
Schedule of Derivative Assets at Fair Value	The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021. Asset Derivatives September 30, 2022 December 31, 2021 Interest rate cap Balance Sheet Caption Other Assets $ 4,357 $ —

NET INCOME PER SHARE (Tables)

NET INCOME PER SHARE (Tables)	9 Months Ended
	Sep. 30, 2022
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted	The following is a reconciliation of the numerator and denominator in the basic and diluted net income per common share computations: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Numerator: Net Income $ 60,763 $ 56,591 $ 210,439 $ 151,473 Denominator: Weighted average common shares outstanding – basic 649,099,780 648,124,642 648,963,625 648,082,081 Dilutive common equivalent shares from equity options 42,157,874 42,587,140 42,622,162 41,026,191 Weighted average common shares outstanding – diluted 691,257,654 690,711,782 691,585,787 689,108,272 Net income per share: Basic $ 0.09 $ 0.09 $ 0.32 $ 0.23 Diluted $ 0.09 $ 0.08 $ 0.30 $ 0.22

NATURE OF OPERATIONS AND BASI_2

NATURE OF OPERATIONS AND BASIS OF PRESENTATION - Narrative (Details) - USD ($)		1 Months Ended
	Oct. 03, 2021	Jan. 31, 2020
Nature of Operations and Basis of Presentation [Line Items]
Reorganization share issuance (in shares)	648,124,642
Olaplex LLC.
Nature of Operations and Basis of Presentation [Line Items]
Business acquisition, percentage of voting interests acquired		100%
Business combination, consideration transferred		$ 1,381,582

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details)	Oct. 04, 2021
Summary of Significant Accounting Policies [Line Items]
Tax receivable agreement, percent of savings for holders	85%
Tax receivable agreement, percent of tax benefits retained by company	15%
London Interbank Offered Rate (LIBOR)
Summary of Significant Accounting Policies [Line Items]
Tax receivable agreement, variable rate on basis spread	3%

NET SALES - Disaggregation of R

NET SALES - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Disaggregation of Revenue [Line Items]
Net sales	$ 176,454	$ 161,624	$ 573,553	$ 431,867
United States
Disaggregation of Revenue [Line Items]
Net sales	89,543	93,611	330,973	252,224
International
Disaggregation of Revenue [Line Items]
Net sales	86,911	68,013	242,580	179,643
Professional
Disaggregation of Revenue [Line Items]
Net sales	62,991	74,978	245,539	201,855
Specialty retail
Disaggregation of Revenue [Line Items]
Net sales	74,191	46,343	202,692	116,201
DTC
Disaggregation of Revenue [Line Items]
Net sales	$ 39,272	$ 40,303	$ 125,322	$ 113,811

NET SALES - Narrative (Details)

NET SALES - Narrative (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
United Kingdom | Geographic Concentration Risk | Revenue Benchmark
Disaggregation of Revenue [Line Items]
Concentration risk, percentage	13%	15%	10%	15%

INVENTORY (Details)

INVENTORY (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Raw materials	$ 37,173	$ 20,852
Finished goods	114,110	77,547
Inventory	$ 151,283	$ 98,399

INVESTMENT IN NONCONSOLIDATED_3

INVESTMENT IN NONCONSOLIDATED ENTITY - Schedule of Investments in and Advances to Affiliates, Schedule of Investments (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Equity Method Investments and Joint Ventures [Abstract]
Capital contributions, net of distributions and impairments	$ 4,500	$ 4,500
Total investments in and advances to nonconsolidated entity	$ 4,500	$ 4,500

GOODWILL AND INTANGIBLE ASSET_2

GOODWILL AND INTANGIBLE ASSETS - Schedule of Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 1,143,503	$ 1,141,890
Accumulated Amortization	(136,236)	(98,546)
Net Carrying Amount	1,007,267	1,043,344
Goodwill	168,300	168,300
Gross Carrying Amount	1,311,803	1,310,190
Net Carrying Amount	$ 1,175,567	$ 1,211,644
Brand name
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	25 years	25 years
Gross Carrying Amount	$ 952,000	$ 952,000
Accumulated Amortization	(103,874)	(75,314)
Net Carrying Amount	$ 848,126	$ 876,686
Product formulations
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	15 years	15 years
Gross Carrying Amount	$ 136,000	$ 136,000
Accumulated Amortization	(24,732)	(17,932)
Net Carrying Amount	$ 111,268	$ 118,068
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	20 years	20 years
Gross Carrying Amount	$ 53,000	$ 53,000
Accumulated Amortization	(7,228)	(5,241)
Net Carrying Amount	$ 45,772	$ 47,759
Software
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	3 years	3 years
Gross Carrying Amount	$ 2,503	$ 890
Accumulated Amortization	(402)	(59)
Net Carrying Amount	$ 2,101	$ 831

GOODWILL AND INTANGIBLE ASSET_3

GOODWILL AND INTANGIBLE ASSETS - Schedule of Amortization of Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Product formulations
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 1,142	$ 1,680	$ 5,091	$ 6,399
Amortization of intangible assets, amount capitalized	1,125	587	1,709	401
Other Intangible Assets
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	10,329	10,182	30,890	30,547
Brand Name and Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	10,182	10,182	30,547	30,547
Software
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 147	$ 0	$ 343	$ 0

ACCRUED EXPENSES AND OTHER CU_3

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Accrued interest	$ 8,344	$ 0
Deferred revenue	4,890	5,022
Accrued freight	4,823	636
Payroll liabilities	4,418	6,302
Accrued other	3,556	5,372
Accrued expenses and other current liabilities	$ 26,031	$ 17,332

LONG-TERM DEBT - Schedule of Lo

LONG-TERM DEBT - Schedule of Long Term Debt Instruments (Details) - USD ($)	Sep. 30, 2022	Feb. 23, 2022	Dec. 31, 2021	Jan. 08, 2020
Debt Instrument [Line Items]
Debt issuance costs	$ (9,214,000)		$ (11,033,000)
Total term loan debt	662,412,000		758,202,000
Less: Current portion	(6,750,000)		(20,112,000)
Long-term debt	655,662,000		738,090,000
2022 Credit Agreement | Line of Credit | Secured Debt
Debt Instrument [Line Items]
Long-term debt, gross	671,626,000		0
Maximum borrowing capacity		$ 675,000,000
Long-term debt, term		7 years
2022 Credit Agreement | Line of Credit | Revolving Credit Facility
Debt Instrument [Line Items]
Long-term debt, gross	0		0
Maximum borrowing capacity	150,000,000	$ 150,000,000
Long-term debt, term		5 years
2020 Credit Agreement | Line of Credit | Secured Debt
Debt Instrument [Line Items]
Long-term debt, gross	0		769,235,000
Maximum borrowing capacity				$ 800,000,000
Long-term debt, term				6 years
2020 Credit Agreement | Line of Credit | Revolving Credit Facility
Debt Instrument [Line Items]
Long-term debt, gross	$ 0		$ 0
Maximum borrowing capacity				$ 51,000,000
Long-term debt, term				5 years

LONG-TERM DEBT - Narrative (Det

LONG-TERM DEBT - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Debt Instrument [Line Items]
Interest expense, debt	$ 10,499	$ 14,987	$ 30,653	$ 46,052
Total term loan debt	662,412		662,412		$ 758,202
Long-term debt, fair value	646,400		646,400
Interest expense	10,499	$ 14,987	30,653	$ 46,052
Interest Rate Cap | Designated as Hedging Instrument
Debt Instrument [Line Items]
Derivative, notional amount	$ 400,000		$ 400,000
2022 Credit Agreement | Line of Credit | Secured Debt
Debt Instrument [Line Items]
Debt instrument, interest rate, effective percentage	6.10%		6.10%
2020 Credit Agreement | Line of Credit | Secured Debt
Debt Instrument [Line Items]
Debt instrument, interest rate, effective percentage					7.50%
Fair Value, Inputs, Level 3 | Interest Rate Cap | Designated as Hedging Instrument | Other Assets
Debt Instrument [Line Items]
Derivative, notional amount	$ 4,357		$ 4,357		$ 0
Fair Value, Inputs, Level 3 | Interest Rate Cap | Designated as Hedging Instrument | Accumulated Other Comprehensive Income
Debt Instrument [Line Items]
Unrealized gain on derivatives	(2,400)		(2,400)
Interest expense	$ 100		$ 100

LONG-TERM DEBT - Schedule of De

LONG-TERM DEBT - Schedule of Derivative Assets at Fair Value (Details) - Interest Rate Cap - Designated as Hedging Instrument - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, notional amount	$ 400,000
Other Assets | Fair Value, Inputs, Level 3
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, notional amount	$ 4,357	$ 0

EQUITY - Narrative (Details)

EQUITY - Narrative (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($) shares
Equity [Line Items]
Cash settled units converted to stock appreciation rights	886,950
Exercise of stock-settled stock appreciation rights (in shares)	117,180
Shares withheld and retired for taxes on exercise of stock settled appreciation rights (in shares)	55,244
Options exercised (in shares)	256,846
Stock Appreciation Rights (SARs)
Equity [Line Items]
Cash settled units converted to stock appreciation rights, fair value liability reclassified to APIC | $	$ 1,632

RELATED PARTY TRANSACTIONS - Na

RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Related Party Transaction [Line Items]
Payments for tax receivable agreement	$ 4,200		$ 4,200
Affiliated Entity
Related Party Transaction [Line Items]
Expenses from transaction with related party	$ 153	$ 30	$ 179	$ 189

NET INCOME PER SHARE (Details)

NET INCOME PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Numerator:
Net income	$ 60,763	$ 87,715	$ 61,961	$ 56,591	$ 49,351	$ 45,531	$ 210,439	$ 151,473
Denominator:
Weighted average common shares outstanding - basic (in shares)	649,099,780			648,124,642			648,963,625	648,082,081
Dilutive common equivalent shares from equity options	42,157,874			42,587,140			42,622,162	41,026,191
Weighted average common shares outstanding – diluted (in shares)	691,257,654			690,711,782			691,585,787	689,108,272
Net income per share:
Net income per share: Basic (in usd per share)	$ 0.09			$ 0.09			$ 0.32	$ 0.23
Net income per share: Diluted (in usd per share)	$ 0.09			$ 0.08			$ 0.30	$ 0.22