Grove Collaborative Holdings, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total Net Revenue was $36.8 million, a 15.8% decrease year-over-year, but a 0.7% increase sequentially.
• Adjusted EBITDA was positive $1.4 million (3.7% margin), compared to negative $1.2 million (2.7% margin) in the prior-year period; this marks the fourth consecutive quarter of positive Adjusted EBITDA.
• Net Income was $0.1 million (0.3% margin), compared to a Net Loss of $3.0 million (6.8% margin) in the prior-year period.
• Operating Cash Flow was positive $0.2 million, compared to negative $1.0 million in the prior-year period.
• Gross Margin was 55.8%, an increase of 250 basis points from 53.3% in the prior-year period.
• Operating Expenses were $20.3 million, a 22.1% decrease from $26.1 million in the prior-year period.
• Cash, Cash Equivalents, and Restricted Cash totaled $11.1 million as of September 30, 2026, down from $11.4 million as of June 30, 2026.
• Deferred Revenue was $6.578 million as of September 30, 2026, up from $5.033 million as of December 31, 2025.
• Debt, current was $0 as of September 30, 2026, down from $800,000 as of December 31, 2025; Debt, noncurrent was $7.5 million as of September 30, 2026, up from $6.7 million as of December 31, 2025.
• A $1.2 million refund of previously paid tariffs received in the quarter reduced cost of goods sold and contributed to Adjusted EBITDA, Net Income, and Operating Cash Flow figures.

Guidance and Future Outlook:

• Full-year 2026 Net Revenue guidance narrowed to approximately $144 million to $146 million (previously $142.5 million to $152.5 million).
• Full-year 2026 Adjusted EBITDA guidance narrowed to approximately $1 million to $2 million (previously breakeven to positive low single digit millions).
• The Company expects fourth quarter 2026 net revenue to be modestly below the third quarter, primarily due to the absence of a comparable QVC "Today's Special Value" program.
• The Company expects its Direct-to-Consumer (DTC) channel to be approximately flat in the fourth quarter compared to the third quarter.
• The effects of 2025 platform disruptions and lower advertising investment are expected to have a diminishing impact on year-over-year comparisons in 2027.

Business Segments and Product Lines:

• Sequential revenue growth was driven by QVC revenue, including $1.2 million from a Today's Special Value program, partially offset by a slight decline in DTC net revenue.
• DTC Total Orders were 473,000, a 23.6% decline year-over-year.
• DTC Active Customers totaled 458,000, a 30.6% decline year-over-year.
• DTC Net Revenue Per Order was $70.85, an increase of 6.1% year-over-year.
• Plastic Intensity improved to 0.86 pounds per $100 in net revenue, down from 0.94 pounds in the prior-year period.
• The Company continues to expand its curated offering of healthier-home categories through dropship capabilities and launched a new loyalty program in the fourth quarter of 2025.

Market and Competitive Landscape:

• The year-over-year revenue decline was primarily driven by a smaller active customer base reflecting lower advertising investment over the past year and the impact of 2025 ecommerce platform disruptions.
• The Company positions itself as a trusted destination for families, emphasizing curation, ingredient standards, and product vetting that it claims no ecommerce player rivals.
• Gross margin improvement was partially offset by a larger mix of QVC revenue, which contributes a lower margin compared to the Company's DTC business.

Risks and Challenges:

• The Company faces risks related to uncertainty of projected financial information, changes in business, market, financial, political, and legal conditions, and competition.
• Specific risks include tariffs, inflation, interest rates, the effectiveness of the ecommerce platform, and selling and marketing efforts.
• The decline in active customers and order volume presents a challenge to revenue growth, driven by reduced advertising spend and past platform disruptions.

Management Commentary and Tone:

• CEO Jeff Yurcisin stated that results reflect "operating discipline" built over the past several quarters and noted the delivery of positive Adjusted EBITDA and net income in the same quarter for the first time since becoming a publicly-traded company.
• Management emphasized a focus on returning to revenue growth while building a durable, profitable business grounded in customer trust.
• The tone highlighted a "meaningfully improved customer experience," a new subscription experience, and continued expense discipline.

Other Key Points:

• The Company is a certified B Corporation and Public Benefit Corporation, with every order being carbon neutral and supporting plastic waste cleanup initiatives.
• The $1.2 million tariff refund was included in Adjusted EBITDA when incurred and has not been adjusted out of the metric.
• The decline in operating expenses was driven by lower fulfillment costs, reduced headcount, and reduced advertising spend.
• The increase in inventory was largely offset by an increase in accounts payable, contributing to the timing of working capital usage.