The Honest Company Reports Strong Third Quarter 2024 Results and Raises Full Year Outlook

Core Insights - The Honest Company reported record revenue of $99 million for Q3 2024, a 15% increase from $86 million in Q3 2023, driven by strong performance in baby products and wipes [1][3] - The company achieved positive net income of $165 thousand, an increase of $8 million from a net loss of $8 million in the prior year quarter [1][6] - Gross margin expanded by 710 basis points to 38.7% compared to 31.6% in the previous year, attributed to cost efficiencies in supply chain and product costs [1][4] - The company raised its full-year 2024 revenue and adjusted EBITDA outlook based on strong performance in the first three quarters [1][10] Financial Performance - Revenue for the three months ended September 30, 2024, was $99,237 thousand, up from $86,169 thousand in the same period last year, reflecting a 15.2% increase [3] - Gross margin for Q3 2024 was 38.7%, compared to 31.6% in Q3 2023, marking a significant improvement of 710 basis points [3][4] - Operating expenses increased by $3 million to $38,339 thousand, but as a percentage of revenue, they decreased by 221 basis points [5] - Adjusted EBITDA was positive at $7,079 thousand compared to a negative $1,056 thousand in Q3 2023, indicating the fourth consecutive quarter of positive adjusted EBITDA [8] Outlook - The company anticipates high single-digit percentage growth in revenue for the full year 2024, an increase from the previous mid-to-high single-digit growth forecast [7] - Adjusted EBITDA outlook for 2024 has been raised to a range of $20 million to $22 million, up from the previous range of $15 million to $18 million [7] Balance Sheet and Cash Flow - As of September 30, 2024, the company had $53 million in cash and cash equivalents, a sequential increase of $17 million from Q2 2024 and an increase of $30 million compared to Q3 2023 [9] - The company reported net cash provided by operating activities of $18 million for the first nine months of 2024, compared to $9 million in the prior year period [9]