Grove Announces Third Quarter 2025 Financial Results

Core Insights - Grove Collaborative Holdings, Inc. reported a decline in revenue for the third quarter of 2025, primarily due to reduced advertising investment and disruptions from an eCommerce platform migration [2][4][8] - The company is focusing on improving customer experience and operational efficiency while evaluating strategic options to enhance growth and shareholder value [3][8] Financial Performance - Revenue for Q3 2025 was $43.7 million, a decrease of 9.4% year-over-year and 0.7% sequentially [4][8] - Gross margin improved to 53.3%, up 30 basis points from 53.0% in Q3 2024, driven by better promotional efficiency and product mix [5] - Operating expenses decreased by 19.5% to $26.1 million compared to $32.3 million in the prior year, attributed to lower stock-based compensation and ongoing cost optimization [5][8] Loss and Adjusted EBITDA - The net loss for Q3 2025 was $3.0 million, compared to a net loss of $1.3 million in the same period last year, reflecting a net loss margin of (6.8%) [6][8] - Adjusted EBITDA was negative $1.2 million, or (2.7%) margin, compared to breakeven in the prior year, indicating challenges in revenue and gross profit [7][8] Customer Metrics - Direct to Consumer (DTC) total orders were 619,000, down 12.5% year-over-year, primarily due to lower advertising spend [10] - DTC active customers totaled 660,000, a decrease of 7.0% year-over-year, also influenced by reduced advertising efforts [11] - DTC net revenue per order was $66.76, a slight decrease of 0.4% year-over-year but an increase of 2.4% sequentially [12] Cash Flow and Liquidity - Operating cash flow was a $1.0 million outflow for the quarter, compared to a $0.8 million inflow in the prior year [9] - Cash, cash equivalents, and restricted cash totaled $12.3 million as of September 30, 2025, down from $14.0 million as of June 30, 2025 [9] Future Guidance - For the full year 2025, Grove expects revenue to be at the lower end of its guidance range, between $172.5 million and $175 million, reflecting a mid-single-digit to low-double-digit percentage decline year-over-year [16] - The company anticipates fourth-quarter revenue to remain roughly flat sequentially and expects full-year Adjusted EBITDA to stay within prior guidance despite lower revenue [16][17]