Grove laborative (US:GROV)2023-05-11 21:06Financial Performance - Revenue for Q1 2023 was $71.565 million, a decrease of 21% compared to $90.479 million in Q1 2022[17]. - Gross profit for Q1 2023 was $37.255 million, down from $42.737 million in Q1 2022, reflecting a gross margin of approximately 52%[17]. - Operating loss for Q1 2023 was $13.655 million, significantly improved from a loss of $47.266 million in Q1 2022[17]. - Net loss for Q1 2023 was $13.069 million, compared to a net loss of $47.384 million in Q1 2022, resulting in a net loss per share of $0.08[17]. - Total net revenue for the three months ended March 31, 2023, was $71.565 million, a decrease of 20.9% from $90.479 million in the same period of 2022[57]. - The net loss for the three months ended March 31, 2023, was $13.1 million, a decrease from a net loss of $47.4 million in the same period of 2022, representing a 72.5% improvement[24]. - Adjusted EBITDA for the three months ended March 31, 2023, was $(6.866) million, compared to $(39.654) million in the same period of 2022, reflecting a significant reduction in losses[172]. Cash Flow and Assets - Cash used in operating activities decreased to $6.7 million in Q1 2023 from $29.5 million in Q1 2022, indicating a 77.3% reduction in cash outflow[24]. - Cash and cash equivalents increased slightly to $81.653 million as of March 31, 2023, compared to $81.084 million as of December 31, 2022[15]. - The company reported cash and cash equivalents of $81.7 million as of March 31, 2023, compared to $74.4 million at the end of Q1 2022, reflecting a year-over-year increase of 9.3%[27]. - Total cash, cash equivalents, and restricted cash at the end of Q1 2023 amounted to $90.5 million, up from $74.4 million in Q1 2022, marking a 21.6% increase[27]. - As of March 31, 2023, the company had $81.7 million in unrestricted cash and incurred negative cash flows from operating activities of $6.7 million[185]. Liabilities and Debt - Total liabilities decreased to $137.880 million as of March 31, 2023, down from $147.512 million as of December 31, 2022[15]. - The Company recorded a total debt of $69.389 million as of March 31, 2023, an increase from $61.195 million as of December 31, 2022[77]. - The Company entered into a Structural Debt Facility borrowing $72.0 million with an effective interest rate of 20.34%[83]. - The Structural Debt Facility requires maintaining a minimum of $57.0 million in unrestricted cash and achieving specific revenue targets[79]. - The total outstanding indebtedness was $69.4 million as of March 31, 2023, net of debt issuance costs[185]. Operational Efficiency and Cost Management - The company reported a significant reduction in advertising expenses, which were $8.673 million in Q1 2023 compared to $32.793 million in Q1 2022[17]. - Selling, general and administrative expenses decreased by $12.949 million or 25%, amounting to $38.021 million compared to $50.970 million in 2022, driven by reduced fulfillment costs and corporate expenses[179]. - The company anticipates continued focus on cost management and operational efficiency to improve future performance[11]. - The company expects advertising costs to continue decreasing as part of its cost management initiatives while balancing consumer awareness[164]. Customer Metrics and Market Strategy - DTC Total Orders decreased to 1,097 in Q1 2023 from 1,558 in Q1 2022, primarily due to reduced advertising spend[148][151]. - DTC Active Customers fell to 1,241 in Q1 2023, down from 1,653 in Q1 2022, reflecting a decline in new customer acquisition[148][152]. - DTC Net Revenue Per Order increased to $62 in Q1 2023 from $55 in Q1 2022, attributed to strategic price increases and the introduction of a Supply Chain Fee[148][153]. - The company aims to expand its retail distribution, pursuing partnerships with various retailers including Target, Amazon, and Walmart[146][139]. - Future growth is expected to depend on the ability to attract new customers and enhance engagement with existing customers on the DTC platform[140][141]. Sustainability and Innovation - The company is focused on sustainability and aims to be the first plastic neutral retailer globally, which is a key part of its business strategy[30]. - Grove Collaborative has launched over 500 individual products in recent years, emphasizing its commitment to product innovation and sustainability[138]. Stock and Equity - The Company recorded $1.2 million in stock-based compensation expense related to the HGI Subscription Agreement, with a total unrecognized compensation expense of $28.6 million as of March 31, 2023[115][126]. - The total shares of common stock reserved for future issuance amounted to 72,749,491 as of March 31, 2023[119]. - The Company has 10,172,491 common stock options outstanding as of March 31, 2023, with a weighted average exercise price of $1.59[120].