Grove laborative (GROV) - 2025 Q1 - Quarterly Results

Key Financial Highlights Grove reported an 18.7% revenue decline to $43.5 million in Q1 2025, with Adjusted EBITDA swinging from positive $1.9 million to negative $1.6 million, and an amended Asset-Based-Loan Facility Q1 2025 Key Financial Results vs. Q1 2024 | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $43.5 million | $53.5 million | -18.7% | | Net Loss | $3.5 million | $3.4 million | +$0.1M | | Adjusted EBITDA | $(1.6) million | $1.9 million | -$3.5M | - The company's eCommerce platform migration had a negative impact of $2 to $3 million on Q1 2025 revenue[6] - Grove amended its Asset-Based-Loan Facility, increasing availability and extending the maturity to April 2028[6][11] CEO's Remarks The CEO expressed dissatisfaction with Q1 performance, noting the turnaround is slower than expected, yet highlighted internal progress in conversion rates and order economics expected to drive second-half momentum and long-term growth - The CEO is not satisfied with Q1 performance and stated the company's turnaround is taking longer than expected[3] - Despite the revenue decline, the company is observing positive internal trends such as stronger first order conversion rates and better order economics[4] - Management believes these foundational improvements will drive momentum in the back half of the year and set the stage for long-term growth[4] First Quarter 2025 Financial Results Q1 2025 revenue declined 18.7% to $43.5 million due to lower repeat orders and platform migration, resulting in a net loss of $3.5 million and negative Adjusted EBITDA of $1.6 million, with cash and equivalents decreasing to $13.5 million - Revenue declined 18.7% YoY to $43.5 million, driven by lower repeat order volume and temporary disruptions from the eCommerce platform migration, which negatively impacted revenue by an estimated $2.0 to $3.0 million[5] - Gross Margin fell to 53.0% from 55.5% YoY, mainly due to the elimination of certain customer fees and a reduced benefit from selling previously reserved inventory[7] - Operating Expenses decreased by 12.2% to $26.6 million, driven by lower stock-based compensation and fulfillment costs, though partially offset by higher advertising spend[8] - Cash, Cash Equivalents, and Restricted Cash decreased from $24.3 million to $13.5 million during the quarter, reflecting negative operating cash flow and cash used for the acquisitions of Grab Green and 8Greens[10] First Quarter 2025 Key Metrics Key direct-to-consumer metrics in Q1 2025 showed declines, with Total Orders falling 20.0% to 622,000 and Active Customers decreasing 16.0% to 678,000, while Plastic Intensity improved to 0.99 pounds per $100 of revenue Q1 2025 Key DTC Metrics vs. Q1 2024 | Metric (in thousands, except per order data) | Q1 2025 | Q1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | DTC Total Orders | 622 | 773 | -20.0% | | DTC Active Customers | 678 | 807 | -16.0% | | DTC Net Revenue Per Order | $66.49 | $66.27 | +0.3% | - The decline in DTC Total Orders and Active Customers was primarily driven by lower advertising spend in 2024 and temporary disruptions from the eCommerce platform migration[12][13] - Plastic Intensity, a measure of pounds of plastic per $100 in net revenue, improved to 0.99 pounds in Q1 2025 from 1.08 pounds in Q1 2024[14] Financial Outlook The company revised its full-year 2025 guidance, projecting revenue to decline by mid-single-digit to low-double-digit percentages and Adjusted EBITDA to range from negative low single-digit millions to positive low single-digit millions, with Q1 expected as the lowest revenue quarter Full-Year 2025 Revised Guidance | Metric | FY 2025 Outlook | | :--- | :--- | | Revenue | Decline of mid-single-digit to low double-digit % YoY | | Adjusted EBITDA | Negative low single-digit millions to positive low single-digit millions | - The company expects Q1 2025 to be the lowest revenue quarter, with improvement through Q2 and Q3, leading to slight YoY growth in Q4[19] - The outlook incorporates the impact of the eCommerce platform migration and assumes the company can mitigate most of the impact from tariffs through pricing, supplier renegotiations, and sourcing shifts[16] Financial Statements This section presents Grove Collaborative Holdings, Inc.'s unaudited consolidated financial statements, including Balance Sheets, Statements of Operations, and Statements of Cash Flows, for periods ending March 31, 2025 Consolidated Balance Sheets Consolidated Balance Sheets (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $59,838 | $65,010 | | Cash and cash equivalents | $9,605 | $19,627 | | Inventory | $22,039 | $19,351 | | Total Liabilities | $46,714 | $48,787 | | Accounts payable | $8,392 | $6,800 | | Total stockholders' deficit | $(11,648) | $(8,549) | Consolidated Statements of Operations Consolidated Statements of Operations (in thousands) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenue, net | $43,547 | $53,545 | | Gross profit | $23,064 | $29,740 | | Operating loss | $(3,508) | $(533) | | Net loss | $(3,547) | $(3,391) | | Net loss per share | $(0.10) | $(0.10) | Consolidated Statements of Cash Flows Consolidated Statements of Cash Flows (in thousands) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(6,872) | $(12,380) | | Net cash used in investing activities | $(3,389) | $(518) | | Net cash used in financing activities | $(536) | $(381) | | Net decrease in cash | $(10,797) | $(13,279) | | Cash at end of period | $13,507 | $81,584 | Non-GAAP Financial Measures The company uses non-GAAP measures like Adjusted EBITDA and Adjusted EBITDA margin to supplement GAAP results, with Q1 2025 Adjusted EBITDA at negative $1.6 million (-3.7% margin), a decline from positive $1.9 million (3.5% margin) in Q1 2024 Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(3,547) | $(3,391) | | Stock-based compensation | $969 | $3,113 | | Depreciation and amortization | $378 | $2,201 | | Interest expense | $346 | $4,129 | | Restructuring and severance related costs | $— | $(2,885) | | Transaction related costs | $563 | $— | | Total Adjusted EBITDA | $(1,598) | $1,893 | | Net loss margin | (8.1)% | (6.3)% | | Adjusted EBITDA margin | (3.7)% | 3.5% | - Grove defines Adjusted EBITDA as net loss adjusted for items including stock-based compensation, depreciation & amortization, changes in fair values of derivative liabilities, interest, restructuring costs, transaction costs, and taxes[25]