Grove Collaborative (GROV) Q1 2025 Earnings Call May 14, 2025 05:00 PM ET Company Participants Jeff Yurcisin - Chief Executive OfficerTom Siragusa - Interim CFO Conference Call Participants Susan Anderson - Managing Director & Senior Analyst Operator Good afternoon, and thank you for standing by. Welcome to Grove Collaborative Holdings Incorporated First Quarter twenty twenty five Earnings Conference Call. At this time, all lines have been placed on mute to prevent any background noise. Following the speake ...

Grove Collaborative (GROV) Q1 2025 Earnings Call May 14, 2025 05:00 PM ET Speaker0 Good afternoon, and thank you for standing by. Welcome to Grove Collaborative Holdings Incorporated First Quarter twenty twenty five Earnings Conference Call. At this time, all lines have been placed on mute to prevent any background noise. Following the speakers' remarks, we will open up your lines for questions. As a reminder, this conference call is being recorded. Hosting today's call are Groove's CEO, Jeff Yerkeson and I ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q _____________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-40263 Grove Collaborative Holdings, Inc. (Exact name of registrant as specified in its cha ...

Exhibit 99.1 Grove Announces First Quarter 2025 Financial Results SAN FRANCISCO, CA — May 14, 2025 — Grove Collaborative Holdings, Inc. (NYSE: GROV) ("Grove" or "the Company"), the world's first plastic neutral retailer, a leading sustainable consumer products company, certified B Corporation, and Public Benefit Corporation, today reported financial results for its fiscal first quarter ended March 31, 2025. Key Financial Highlights: "We are not satisfied with our first quarter performance and recognize that ...

Investor Presentation Q1 2025 As of May 14, 2025 Grove uses certain non-GAAP measures in this presentation including Adjusted EBITDA. Grove believes the presentation of its non-GAAP financial measures enhances investors' overall understanding of the company's historical financial performance. The presentation of the company's non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the company's financial results prepared in accordance with GAAP, and the company's non-GA ...

Revenue Performance - Total revenue for 2024 was $203,425,000, down 22% from $259,278,000 in 2023, primarily due to a decrease in DTC Total Orders[324]. - Revenue from Grove Brands was $82,942,000 in 2024, down from $119,006,000 in 2023, indicating a decrease of about 30.3%[450]. - Revenue from third-party products decreased to $120,483,000 in 2024 from $140,272,000 in 2023, reflecting a decline of approximately 14.1%[450]. - For the year ended December 31, 2024, total revenue decreased to $203,425,000 from $259,278,000 in 2023, representing a decline of approximately 21.5%[450]. Customer Metrics - Total DTC orders decreased to 2,930 in 2024 from 3,852 in 2023, primarily due to reduced advertising spend[300]. - DTC active customers declined to 688 in 2024 from 920 in 2023, reflecting fewer new customer acquisitions[301]. - DTC net revenue per order increased to $67 in 2024 from $64 in 2023, attributed to a higher number of products sold per order[302]. Financial Losses and Deficits - Net loss for the year ended December 31, 2024, was $27,423,000, a decrease from a net loss of $43,232,000 in 2023, resulting in a net loss margin improvement from (16.7)% to (13.5)%[307]. - The company reported an accumulated deficit of $648.5 million as of December 31, 2024[283]. - Net loss attributable to common stockholders for 2024 was $28,272 million, compared to a net loss of $44,422 million in 2023, indicating a reduction in losses[400]. Cash Flow and Liquidity - As of December 31, 2024, the company had $19.6 million in unrestricted cash and cash equivalents, with negative cash flow from operating activities of $9.7 million for the year[337]. - Cash and cash equivalents decreased to $19.627 million in 2024 from $86.411 million in 2023, representing a decline of 77.3%[398]. - Cash used in operating activities for 2024 was $9.749 million, compared to $7.993 million in 2023, indicating an increase in cash outflow[406]. Expenses and Cost Management - Gross profit decreased by $28,011,000, or 20%, to $109,348,000 in 2024, while gross margin improved to 54% from 53% in 2023[326][327]. - Advertising expenses decreased by $11,027,000, or 52%, to $10,265,000 in 2024, reflecting a lower-spend strategy for customer acquisition[328]. - Selling, general and administrative expenses decreased by $31.8 million, or 24%, to $103.2 million for the year ended December 31, 2024, compared to $134.9 million in 2023[331]. Restructuring and Strategic Changes - The company recorded restructuring charges of $2.0 million in 2024 and $3.8 million in 2023 related to workforce and facility reductions[285]. - The exit from brick-and-mortar retail is anticipated to improve profitability with minimal revenue impact, expected to be completed by 2025[282]. - The company has exited brick-and-mortar retail channels, expecting minimal impact on financial results[309]. Product Development and Innovation - The company has launched over 500 individual products in recent years, focusing on product innovation and sustainable packaging[288]. - Product development expenses increased by $2,055,000, or 13%, to $18,456,000 in 2024, driven by higher severance-related expenses and accelerated software amortization[329]. Debt and Financing - Total outstanding indebtedness was $7.5 million as of December 31, 2024, after using $72.3 million to repay the Structural Debt Facility in full during the year[337]. - The company entered into a subscription agreement with Volition Capital on September 20, 2024, receiving gross proceeds of $15.0 million in exchange for 15,000 shares of Series A' Redeemable Convertible Preferred Stock[339]. - Interest expense decreased to $12,777,000 in 2024 from $16,077,000 in 2023, with expectations for further decline following the repayment of term debt[322][317]. Inventory and Assets - Inventory decreased by $12.5 million in 2024, contributing to changes in operating assets and liabilities[353]. - Total assets decreased to $65.010 million in 2024 from $150.742 million in 2023, a reduction of 56.8%[398]. - The company had enforceable and legally binding inventory purchase commitments of $9.1 million due within one year as of December 31, 2024[345]. Compliance and Reporting - The Company adopted ASU 2023-07 for segment reporting beginning January 1, 2024, which enhances segment disclosures but did not impact consolidated financial results[472]. - The Company is evaluating the impact of ASU 2023-09, effective for fiscal years starting after December 15, 2024, which requires additional income tax disclosures[473]. - The company remains classified as an "emerging growth company" and a "smaller reporting company," allowing it to take advantage of reduced disclosure obligations[380][381].

Grove Collaborative Holdings, Inc (NYSE:GROV) Q4 2024 Earnings Conference Call March 11, 2025 5:00 PM ET Company Participants Jeff Yurcisin - CEO Tom Siragusa - Interim CFO Operator Good afternoon, and thank you for standing by. Welcome to Grove Collaborative Holdings, Inc's. Fourth Quarter and Full Year 2024. [Operator Instructions] As a reminder, this conference call is being recorded. Hosting today's call are Grove's CEO, Jeff Yurcisin and interim CFO, Tom Siragusa. Before they begin the prepared remarks ...

Revenue Performance - Fourth quarter 2024 revenue was $49.5 million, a sequential increase of 2.5% from $48.3 million in Q3 2024, but a year-over-year decline of 17.3% from $59.9 million in Q4 2023[4] - Full year 2024 revenue totaled $203.4 million, representing a 21.5% year-over-year decline, primarily due to a decrease in direct-to-consumer (DTC) orders[17] - For the year ended December 31, 2024, Grove reported a net revenue of $203.425 million, a decrease of 21.5% compared to $259.278 million in 2023[40] Profitability and Loss - Net loss for Q4 2024 was $12.6 million, with a net loss margin of (25.5%), compared to a net loss of $1.3 million in Q3 2024[8] - The net loss for the year ended December 31, 2024, was $27.423 million, compared to a net loss of $43.232 million in 2023, representing a 36.3% improvement[40] - Net loss for the three months ended December 31, 2024, was $12.635 million, compared to a net loss of $9.485 million for the same period in 2023[44] Adjusted EBITDA - Adjusted EBITDA for Q4 2024 was negative $1.6 million, compared to breakeven in Q3 2024 and $0.1 million in Q4 2023[9] - Total Adjusted EBITDA for the year ended December 31, 2024, was $1.301 million, a significant improvement from a loss of $9.183 million in 2023[44] - Adjusted EBITDA margin for the three months ended December 31, 2024, was (3.3)%, compared to 0.2% in the same period of 2023[44] Operating Expenses - Operating expenses in Q4 2024 were $34.3 million, a 6.0% increase sequentially but a 15.4% decrease year-over-year[7] - Operating expenses for the year ended December 31, 2024, totaled $132.895 million, compared to $172.622 million in 2023, a decrease of 23%[40] Balance Sheet and Cash Flow - The company completed a voluntary $72 million repayment of term debt in Q4 2024, improving its balance sheet[5] - The total current assets decreased from $124.196 million in 2023 to $44.941 million in 2024, a decline of 63.8%[38] - Total liabilities decreased from $132.620 million in 2023 to $48.787 million in 2024, a reduction of 63.3%[38] - Cash and cash equivalents at the end of the period were $19.627 million, down from $86.411 million in 2023, a decrease of 77.3%[38] Gross Margin - Gross margin for Q4 2024 was 52.4%, down from 53.0% in Q3 2024 and 54.4% in Q4 2023, attributed to increased promotional activity[5] - The company’s gross profit for the year ended December 31, 2024, was $109.348 million, down from $137.359 million in 2023, reflecting a decline of 20.4%[40] Direct-to-Consumer Orders - DTC total orders in Q4 2024 were 717,000, up 1.3% quarter-over-quarter but down 17.0% year-over-year[14] Future Outlook - The company expects 2025 revenue to be approximately flat to down mid-single digit percentage year-over-year, with a focus on sustainable growth[31] - Recent acquisitions of Grab Green and 8Greens are expected to enhance the company's product offerings and align with its sustainability goals[22] Management Commentary - Grove's management emphasizes the importance of non-GAAP measures like Adjusted EBITDA for evaluating financial performance and trends, despite their limitations[35]

Financial Performance - Revenue for the three months ended September 30, 2024, was $48.28 million, a decrease of 22% compared to $61.75 million for the same period in 2023[13]. - Gross profit for the three months ended September 30, 2024, was $25.60 million, down from $33.23 million in the prior year, reflecting a gross margin decline[13]. - Operating loss for the three months ended September 30, 2024, was $(6.75) million, compared to $(4.10) million for the same period in 2023[13]. - Net loss attributable to common stockholders for the three months ended September 30, 2024, was $(1.51) million, compared to a net loss of $(10.87) million in the prior year[13]. - The net loss for the three months ended September 30, 2023, was $33.7 million, compared to a net loss of $14.8 million for the same period in 2024[21]. - The company reported a net loss of $1,336,000 for the three months ended September 30, 2024, compared to a net loss of $9,811,000 in the same period of 2023[172]. - Adjusted EBITDA for the nine months ended September 30, 2024, was $2,919,000, compared to a loss of $9,320,000 in the same period of 2023, indicating improved operational performance[172]. Cash and Liquidity - Cash and cash equivalents decreased to $50.8 million as of September 30, 2024, down from $86.1 million in the previous year[24]. - Total cash, cash equivalents, and restricted cash at the end of the period was $55.6 million, down from $94.7 million a year earlier[24]. - As of September 30, 2024, the company had $50.8 million in unrestricted cash and cash equivalents, with negative cash flows from operating activities of $10.0 million for the nine months ended September 30, 2024[205]. - The company has an accumulated deficit of approximately $635.9 million as of September 30, 2024, funded primarily through stock financings and debt[205]. - Total outstanding indebtedness was $32.2 million, net of debt issuance costs, as of September 30, 2024[205]. Expenses and Cost Management - Advertising expenses for the three months ended September 30, 2024, were $2.82 million, while product development expenses were $4.80 million[13]. - The company incurred stock-based compensation expenses of $11.9 million in Q3 2023, compared to $9.3 million in Q3 2024[21]. - Selling, general and administrative expenses decreased from $29.7 million in 2023 to $24.7 million in 2024 for the three months ended September 30[187]. - Interest expense for the three months ended September 30, 2024, was $2.9 million, down from $4.1 million in 2023[183]. - The company has implemented significant expense reductions since the second half of 2022, particularly in advertising, which have led to a substantial decline in revenue[151]. Revenue Breakdown - Grove Brands revenue for the three months ended September 30, 2024, was $18.61 million, down 33% from $27.65 million in the same period of 2023[54]. - Third-party products revenue for the three months ended September 30, 2024, was $29.67 million, a decline of 13% from $34.10 million in the same period of 2023[54]. - Grove Brands % Net Revenue decreased from 46% in September 2023 to 41% in September 2024, reflecting a shift towards third-party offerings[164]. Future Outlook and Strategy - Future outlook remains cautious due to potential risks and uncertainties affecting operations and financial performance[6]. - The company plans to continue focusing on product development and market expansion strategies to drive future growth[6]. - The company plans to exit the sale of Grove Co. products through brick and mortar retail channels by 2025, expecting minimal impact on revenue but improved profitability[145]. - The company is transitioning its ecommerce platform to Shopify, which is expected to enhance scalability and user experience[161]. - Operating expenses are expected to increase as the company plans to invest more in advertising to optimize customer acquisition costs[179]. Debt and Financing - The total debt as of September 30, 2024, is $32.166 million, a decrease from $71.662 million as of December 31, 2023[78]. - The Company entered into a revolving line of credit (Siena Revolver) with an initial commitment of $35.0 million, with an outstanding principal balance of $7.5 million as of September 30, 2024[86][89]. - The interest rate on the outstanding balance of the Siena Revolver was 9.18% as of September 30, 2024, with additional borrowing capacity of $6.8 million[89]. - The Company must prepay $10.0 million of the principal amount on the Structural Debt Facility on or before November 30, 2024[85]. Stock and Equity - The Company had cash equivalents of $48.514 million as of September 30, 2024, down from $83.431 million as of December 31, 2023[69]. - The Company has 29,028,103 shares of common stock reserved for future issuance as of September 30, 2024, including various warrants and stock options[118]. - The Company issued 396,825 shares to HCI Grove LLC for aggregate proceeds of $2.5 million under the HGI Subscription Agreement, with a registration statement filed on July 14, 2023[113]. - The Series A Preferred Stock Subscription Agreement with Volition Capital raised gross proceeds of $10.0 million for 10,000 shares, along with warrants to purchase 1,579,778 shares at an exercise price of $6.33[119]. Operational Metrics - DTC Total Orders decreased from 2,988 in September 2023 to 2,213 in September 2024, primarily due to a lower advertising spend strategy[165]. - DTC Active Customers remained stable at 1,019 in September 2023 but decreased to 710 in September 2024, indicating a decline in customer acquisition[166]. - DTC Net Revenue Per Order increased from $64 in September 2023 to $67 in September 2024, attributed to a favorable product mix and strategic price increases[167].

Financial Data and Key Metrics Changes - Net revenue for Q3 2024 was $48.3 million, down 7.3% from Q2 2024 and down 21.8% year-over-year, primarily due to fewer repeat orders and lower advertising spend [22][19] - Total orders decreased to 0.7 million in Q3, down 3.3% quarter-over-quarter and 22.8% year-over-year, with active customers also down to 0.7 million, a decline of 4.8% quarter-over-quarter and 30.4% year-over-year [23][19] - Adjusted EBITDA was breakeven in Q3 2024, compared to $1.1 million in Q2 2024 and $0.2 million in Q3 2023, reflecting strict expense discipline despite revenue challenges [30][19] Business Line Data and Key Metrics Changes - DTC net revenue per order was $67.02 in Q3, down 1% from Q2 but up 2.7% year-over-year, driven by a higher percentage of first orders [24][19] - Gross margin was 53%, down 80 basis points from Q2 2024 and year-over-year, mainly due to retail markdowns and a shift towards third-party products [25][19] - Growth brand products as a percentage of net revenue decreased to 38.5%, down 260 basis points quarter-over-quarter and 630 basis points year-over-year, due to the expansion of third-party offerings [26][19] Market Data and Key Metrics Changes - Advertising expenses increased 15.6% in Q3 compared to Q2 but decreased 30.6% year-over-year to $2.8 million, reflecting a strategic shift towards DTC advertising [27][19] - The company reported a $0.8 million operating cash flow, marking the fourth quarter of positive operating cash flow in the last six quarters [31][19] - Inventory was reduced from $27.8 million at the end of Q2 2024 to $24.5 million at the end of Q3 2024, indicating improved inventory management [9][19] Company Strategy and Development Direction - The company is focusing on exiting the retail channel by early 2025, as it constitutes less than 4% of the business and has been consistently unprofitable [16][19] - The strategy emphasizes investment in DTC channels, targeting a growing segment of conscientious consumers who prefer premium curated selections [17][19] - The company aims to achieve sustainable, profitable growth by optimizing its e-commerce experience and enhancing customer engagement [36][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a reduction in revenue guidance for 2024, now expecting net revenue to be in the range of $200 million to $205 million, down from previous guidance [33][19] - The management remains optimistic about sequential revenue growth in Q4 2024, driven by stabilization in repeat customer revenue [22][19] - The company is committed to maintaining strict margin and expense discipline while focusing on long-term sustainable growth [34][19] Other Important Information - The company received an additional $15 million investment from Volition Capital, which will be used to pay off remaining term debt, resulting in a cleaner balance sheet [10][19] - The Grove community has avoided and recovered 24.5 million pounds of plastic since 2020, highlighting the company's commitment to sustainability [14][19] Q&A Session Summary Question: Update on digital transformations and Shopify transition - Management confirmed that sequential growth is still anticipated and that the transition to Shopify is expected to be completed by early Q1 [39][19] Question: Factors needed for sequential growth in Q4 - Management indicated that brick-and-mortar performance has been a headwind, but they expect DTC growth to offset this [40][19] Question: Impact of exiting brick-and-mortar on P&L - Management clarified that while brick-and-mortar has been a challenge, they are focused on achieving profitable growth through DTC channels [42][19] Question: Consumer health heading into the holiday season - Management noted that their DTC customer base is generally higher income, and they have not observed significant trading down to lower-cost items [47][19]