Achieves 2025 Full Year Financial Outlook In Line with Updated Guidance
Announces
Provides Full Year 2026 Financial Outlook In Line with Long-Term Algorithm
Fourth Quarter 2025 Financial Highlights Compared to Prior Year Period:
- Revenue of
$88.0 million decreased by 11.8%; Organic Revenue(1) of$71.3 million increased by 0.7% - Gross margin of 15.7%; Adjusted Gross Margin(2) was 38.3%
- Net loss of
$23.6 million ; Adjusted Net Income(3) was$0.4 million - Adjusted EBITDA(4) of
$3.8 million decreased by$4.8 million
2025 Financial Highlights Compared to Prior Year:
- Revenue of
$371.3 million decreased by 1.9%; Organic Revenue(1) of$294.1 million increased by 5.3% - Gross margin of 33.3%; Adjusted Gross Margin(2) was 38.7%
- Net loss of
$15.7 million ; Adjusted Net Income(3) was$8.3 million - Adjusted EBITDA(4) of
$21.8 million decreased by$4.0 million - Cash and cash equivalents of
$89.6 million increased by$14.1 million
"Our fourth quarter delivered results in line with our expectations and provides clear momentum as we enter 2026," said Chief Executive Officer,
Share Repurchase Program
On
"Today we’re also announcing our inaugural share repurchase program. This strategic move reflects our confidence in Honest’s potential to deliver sustainable profitable growth," said Chief Financial Officer,
Under the program, share repurchases may be made at the Company’s discretion from time to time in open market transactions or privately negotiated transactions, or by other means, including through Rule 10b5-1 trading plans. The timing and number of shares repurchased under the new program will depend on a variety of factors, including, without limitation, stock price, trading volume, and general business and market conditions. The repurchase program does not obligate the Company to purchase any shares, has no expiration date and may be modified, suspended or terminated at any time. The Company expects to fund repurchases with a combination of existing cash and cash equivalents and cash flows from operations. As of
___________
(1) See the reconciliation of Organic Revenue, a non-GAAP financial measure to net revenue in the table under “Use of Non-GAAP Financial Measures” below in this press release.
(2) Represents gross margin excluding the discrete costs of Powering Honest Growth. See the reconciliation of Adjusted Gross Margin, a non-GAAP financial measure, to gross margin in the table under “Use of Non-GAAP Financial Measures” below in this press release.
(3) Represents net income excluding the discrete costs of Powering Honest Growth. See the reconciliation of Adjusted Net Income, a non-GAAP financial measure, to net loss in the table under “Use of Non-GAAP Financial Measures” below in this press release.
(4) See the reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin, non-GAAP financial measures, to net income (loss) and net income (loss) margin in the table under “Use of Non-GAAP Financial Measures” below in this press release.
Fourth Quarter and Full Year Results
| For the three months ended | For the year ended | ||||||||||||||||||||||||
| 2025 | 2024 | Change | 2025 | 2024 | Change | ||||||||||||||||||||
| (In thousands, except percentages) | |||||||||||||||||||||||||
| Revenue | $ | 88,037 | $ | 99,836 | (11.8 | ) | % | $ | 371,317 | $ | 378,340 | (1.9 | ) | % | |||||||||||
| Organic Revenue(1) | $ | 71,289 | $ | 70,774 | 0.7 | % | $ | 294,145 | $ | 279,268 | 5.3 | % | |||||||||||||
| Gross margin | 15.7 | % | 38.8 | % | (23.1 | ) | pts | 33.3 | % | 38.2 | % | (4.9 | ) | pts | |||||||||||
| Adjusted Gross Margin(4) | 38.3 | % | 38.8 | % | (0.5 | ) | pts | 38.7 | % | 38.2 | % | 0.5 | pts | ||||||||||||
| Net loss | $ | (23,570 | ) | $ | (811 | ) | $ | (22,759 | ) | $ | (15,686 | ) | $ | (6,124 | ) | $ | (9,562 | ) | |||||||
| Adjusted Net Income (Loss)(5) | $ | 426 | $ | (811 | ) | $ | 1,237 | $ | 8,310 | $ | (6,124 | ) | $ | 14,434 | |||||||||||
| Net loss margin | (26.8 | ) | % | (0.8 | ) | % | (26.0 | ) | pts | (4.2 | ) | % | (1.6 | ) | % | (2.6 | ) | pts | |||||||
| Adjusted EBITDA(6) | $ | 3,752 | $ | 8,541 | $ | (4,789 | ) | $ | 21,821 | $ | 25,858 | $ | (4,037 | ) | |||||||||||
| Adjusted EBITDA Margin(6) | 4.3 | % | 8.6 | % | (430 | ) | bps | 5.9 | % | 6.8 | % | (90 | ) | bps | |||||||||||
Fourth Quarter Results
(All comparisons are versus the fourth quarter 2024)
Revenue decreased 11.8% to
Organic Revenue(1) increased 0.7% to
Tracked channel consumption(2) for the Company grew 3.4% compared to the comparative categories, which were up 2.5% in the same period.
Gross margin was 15.7% compared to 38.8%. This decline was primarily driven by a discrete inventory write-down on apparel and fixed asset impairments related to the strategic exits under Powering Honest Growth(3), and an increase in tariff costs, partially offset by favorable product mix and a decrease in fulfillment costs. Adjusted Gross Margin(4), calculated by excluding the discrete costs of Powering Honest Growth was 38.3%.
Operating expenses decreased
Net loss of
Adjusted EBITDA(6) was
____________
(1) See the reconciliation of Organic Revenue, a non-GAAP financial measure to net revenue in the table under “Use of Non-GAAP Financial Measures” below in this press release.
(2) According to
(3) Refer to the table below for additional information on costs incurred in connection with Powering Honest Growth for the three and twelve months ended
(4) Represents gross margin excluding the discrete costs of Powering Honest Growth. See the reconciliation of Adjusted Gross Margin, a non-GAAP financial measure, to gross margin in the table under “Use of Non-GAAP Financial Measures” below in this press release.
(5) See the reconciliation of Adjusted Net Income, a non-GAAP financial measure to net loss in the table under “Use of Non-GAAP Financial Measures” below in this press release.
(6) See the reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin, non-GAAP financial measures, to net income (loss) and net income (loss) margin, respectively, in the table under “Use of Non-GAAP Financial Measures” below in this press release.
Full Year Results
(All comparisons are versus full year 2024)
Revenue of
Organic Revenue(1) increased 5.3% to
Tracked channel consumption(2) for the Company grew 5.0% outperforming the comparative categories, which were up 1.8% in the same period.
Gross margin was 33.3% compared to 38.2%. This decline was primarily driven by a discrete inventory write-down on apparel and fixed asset impairments related to the strategic exits under Powering Honest Growth(3), an increase in tariff costs, partially offset by favorable product mix. Adjusted Gross Margin(4), calculated by excluding the discrete costs of Powering Honest Growth was 38.7%, up 50 basis points compared to last year.
Operating expenses decreased
Net loss of
Adjusted EBITDA(6) was
Balance Sheet and Cash Flow
The Company ended the fourth quarter of 2025 with
Net cash provided by operating activities was
___________
(1) See the reconciliation of Organic Revenue, a non-GAAP financial measure to net revenue in the table under “Use of Non-GAAP Financial Measures” below in this press release.
(2) According to
(3) Refer to the table below for additional information on costs incurred in connection with Powering Honest Growth for the three and twelve months ended
(4) Represents gross margin excluding the discrete costs of Powering Honest Growth. See the reconciliation of Adjusted Gross Margin, a non-GAAP financial measure, to gross margin in the table under “Use of Non-GAAP Financial Measures” below in this press release.
(5) See the reconciliation of Adjusted Net Income, a non-GAAP financial measure to net loss in the table under “Use of Non-GAAP Financial Measures” below in this press release.
(6) See the reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin, non-GAAP financial measures, to net income (loss) and net income (loss) margin, respectively, in the table under “Use of Non-GAAP Financial Measures” below in this press release.
2026 Outlook
As previously disclosed, the Company’s long-term financial algorithm consists of revenue growth of 4% to 6% annually and continued Adjusted EBITDA Margin expansion. Additionally, Organic Revenue(1) excludes revenue from categories and channels exited as part of Powering Honest Growth. Due to the loss of these revenue streams, we anticipate a high-teens percentage decrease in 2026 reported revenue compared to 2025.
| Revenue | ||
| Organic Revenue Growth(1) | 4% to 6% | |
| Adjusted Gross Margin | Low 40%s | |
| Adjusted EBITDA(2) | ||
Our financial outlook reflects assumptions, including current tariff levels, which are subject to change given the macroeconomic environment. Additional information on the Company’s strategic plans and long-term financial algorithm can be found in its Investor Presentation on its Investor Relations website at http://investors.honest.com.
Transformation 2.0: Powering Honest Growth
As previously disclosed, on
Webcast and Conference Call Information
A webcast and conference call to discuss fourth quarter and full year 2025 results is scheduled for today,
Forward-Looking Statements
This press release and earnings call referencing this press release contain forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this press release are forward-looking statements. Such statements may address the Company’s expectations regarding revenue, profit margin or other future financial performance and liquidity, other performance measures and cost savings, strategic initiatives and future operations or operating results. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will” or “would” or the negative of these words or other similar terms or expressions.
___________
(1) Represents the current outlook for Revenue growth excluding (i) product revenue from our apparel line of
(2) We do not provide guidance for the most directly comparable GAAP measure, net income (loss), and similarly cannot provide a reconciliation between our Adjusted EBITDA outlook and net income (loss) without unreasonable effort due to the unavailability of reliable estimates for certain components of net income (loss), including interest and other (income) expense, net, and the respective reconciliations. These items are not within our control and may vary greatly between periods and could significantly impact our financial results calculated in accordance with GAAP.
These forward-looking statements include, but are not limited to, statements concerning our expectations regarding future results of operations and financial condition, including our revenue, Adjusted EBITDA, Organic Revenue and Adjusted Gross Margin outlook for full year 2026 and our growth potential; the implementation of our new share repurchase program and any share repurchases thereunder; our ability to drive shareholder value in line with our long-term algorithm; our ability to continue to benefit from our Transformation Pillars of Brand Maximization, Margin Enhancement, and Operating Discipline; our ability to successfully implement, execute, and derive benefits from Powering Honest Growth program; our ability to realize financial benefits from warehouse and supply chain efficiencies, our ability to scale across our categories and grow the Honest Brand and our market share; our ability to accelerate or continue growth in the high-margin categories and to offset declines in other categories; our ability to navigate and manage the impact of evolving macroeconomic conditions and consumer demand or behaviors; our expectations on the impact of tariffs on our business; our ability to achieve or sustain profitability and continue generating positive cash flow; the strength of the Honest brand; and our tariff mitigation strategy, our pricing, marketing, new product launches, and distribution strategies, plans and objectives of management for future operations.
You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this press release and the earnings call referencing this press release primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results.
The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled “Risk Factors” in the Annual Report, on Form 10-K for the year ended
In addition, statements that contain “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this press release. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.
The forward-looking statements made in this press release and the earnings call referencing this press release relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.
About
Founded in 2012,
The Honest Standard, the Company’s rigorous set of guiding principles that shape every step of product innovation and development, reflects Honest’s ongoing dedication to safety, transparency and integrity. As a leader in Clean Conscious® products, Honest continues to set a new standard for clean formulations, bringing joy to a community that seeks authenticity, transparency and efficacy in everyday essentials. Honest products are available nationwide at major retailers, including Amazon, Target and Walmart. For more information about the Honest Standard and the Company, please visit www.honest.com.
Investor Contacts:
cmandeville@thehonestcompany.com
Investor Inquiries:
investors@thehonestcompany.com
Media Contact:
bisrael@thehonestcompany.com
Consolidated Statements of Comprehensive Loss (Unaudited) (in thousands, except share and per share amounts) | |||||||||||||||
| For the three months ended | For the year ended | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Revenue | $ | 88,037 | $ | 99,836 | $ | 371,317 | $ | 378,340 | |||||||
| Cost of revenue | 74,193 | 61,070 | 247,562 | 233,683 | |||||||||||
| Gross profit | 13,844 | 38,766 | 123,755 | 144,657 | |||||||||||
| Operating expenses | |||||||||||||||
| Selling, general and administrative | 20,438 | 26,766 | 79,510 | 99,044 | |||||||||||
| Marketing | 11,583 | 11,315 | 51,200 | 45,093 | |||||||||||
| Restructuring | 4,159 | — | 4,159 | — | |||||||||||
| Research and development | 1,833 | 1,714 | 7,347 | 6,851 | |||||||||||
| Total operating expenses | 38,013 | 39,795 | 142,216 | 150,988 | |||||||||||
| Operating loss | (24,169 | ) | (1,029 | ) | (18,461 | ) | (6,331 | ) | |||||||
| Interest and other income (expense), net | 609 | 237 | 2,979 | 282 | |||||||||||
| Loss before provision for income taxes | (23,560 | ) | (792 | ) | (15,482 | ) | (6,049 | ) | |||||||
| Income tax provision | 10 | 19 | 204 | 75 | |||||||||||
| Net loss | $ | (23,570 | ) | $ | (811 | ) | $ | (15,686 | ) | $ | (6,124 | ) | |||
| Net loss per share attributable to common stockholders: | |||||||||||||||
| Basic and diluted | $ | (0.21 | ) | $ | (0.01 | ) | $ | (0.14 | ) | $ | (0.06 | ) | |||
| Weighted-average shares used in computing net loss per share attributable to common stockholders: | |||||||||||||||
| Basic and diluted | 112,415,538 | 104,883,136 | 111,209,322 | 100,245,394 | |||||||||||
| Comprehensive loss | $ | (23,570 | ) | $ | (811 | ) | $ | (15,686 | ) | $ | (6,124 | ) | |||
Condensed Consolidated Balance Sheets (Unaudited) (in thousands, except share and per share amounts) | |||||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 89,581 | $ | 75,435 | |||
| Accounts receivable, net | 33,761 | 43,476 | |||||
| Inventories | 72,501 | 85,266 | |||||
| Prepaid expenses and other current assets | 6,590 | 9,741 | |||||
| Total current assets | 202,433 | 213,918 | |||||
| Operating lease right-of-use asset | 11,351 | 17,239 | |||||
| Property and equipment, net | 7,477 | 11,394 | |||||
| 2,269 | 2,230 | ||||||
| Intangible assets, net | 162 | 235 | |||||
| Other assets | 1,715 | 2,377 | |||||
| Total assets | $ | 225,407 | $ | 247,393 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Current liabilities | |||||||
| Accounts payable | $ | 15,134 | $ | 22,807 | |||
| Accrued expenses | 35,685 | 35,869 | |||||
| Deferred revenue | — | 1,213 | |||||
| Total current liabilities | 50,819 | 59,889 | |||||
| Long term liabilities | |||||||
| Operating lease liabilities, net of current portion | 4,919 | 13,197 | |||||
| Total liabilities | 55,738 | 73,086 | |||||
| Commitments and contingencies | |||||||
| Stockholders’ equity | |||||||
| Preferred stock, | — | — | |||||
| Common stock, | 11 | 11 | |||||
| Additional paid-in capital | 670,536 | 659,488 | |||||
| Accumulated deficit | (500,878 | ) | (485,192 | ) | |||
| Total stockholders’ equity | 169,669 | 174,307 | |||||
| Total liabilities and stockholders’ equity | $ | 225,407 | $ | 247,393 | |||
Condensed Consolidated Statements of Cash Flows (Unaudited) | |||||||
| For the year ended | |||||||
| 2025 | 2024 | ||||||
| Cash flows from operating activities | |||||||
| Net loss | $ | (15,686 | ) | $ | (6,124 | ) | |
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 2,901 | 2,843 | |||||
| Stock-based compensation | 10,512 | 15,675 | |||||
| Fixed asset impairment | 2,878 | — | |||||
| Amortization of operating ROU assets | 6,649 | 6,444 | |||||
| Apparel inventory write-down | 15,899 | — | |||||
| Other | 6,175 | 746 | |||||
| Changes in assets and liabilities: | |||||||
| Accounts receivable, net | 10,202 | (378 | ) | ||||
| Inventories | (7,465 | ) | (10,934 | ) | |||
| Prepaid expenses and other assets | 3,557 | (1,437 | ) | ||||
| Accounts payable, accrued expenses and other long-term liabilities | (11,183 | ) | 3,809 | ||||
| Deferred revenue | (375 | ) | (998 | ) | |||
| Operating lease liabilities | (8,943 | ) | (8,105 | ) | |||
| Net cash provided by operating activities | 15,121 | 1,541 | |||||
| Cash flows from investing activities | |||||||
| Purchases of property and equipment | (1,510 | ) | (530 | ) | |||
| Net cash used in investing activities | (1,510 | ) | (530 | ) | |||
| Cash flows from financing activities | |||||||
| Proceeds from exercise of stock options | 384 | 41,453 | |||||
| Proceeds from 2021 ESPP | 152 | 163 | |||||
| Payments on finance lease liabilities | (1 | ) | (19 | ) | |||
| Net cash provided by financing activities | 535 | 41,597 | |||||
| Net increase in cash and cash equivalents | 14,146 | 42,608 | |||||
| Cash and cash equivalents | |||||||
| Beginning of the period | 75,435 | 32,827 | |||||
| End of the period | $ | 89,581 | $ | 75,435 | |||
Use of Non-GAAP Financial Measures
(Unaudited)
We prepare and present our consolidated financial statements in accordance with GAAP. However, management believes that Organic Revenue, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Margin and Adjusted Net Income, which are non-GAAP financial measures, provide investors with additional useful information in evaluating our performance.
We calculate Organic Revenue as net revenue, adjusted to exclude revenue from exited operations in connection with Powering Honest Growth including: (1) product revenue from our apparel line; (2) revenue from our Honest.com website as a fulfillment center; and (3) revenue from sales to Canadian retailers or channels and (4) in certain periods, revenue from other acquisitions, divestitures and product or channel exits.
We calculate Adjusted EBITDA as net income (loss), adjusted to exclude: (1) interest and other (income) expense, net; (2) income tax provision; (3) depreciation and amortization; (4) stock-based compensation expense, including payroll tax; (5) litigation and settlement fees associated with certain non-ordinary course securities litigation claims; (6) executive officer transition expenses; and (7) restructuring-related expenses in connection with the Powering Honest Growth. We calculate Adjusted EBITDA Margin by dividing Adjusted EBITDA by revenue.
We calculate Adjusted Net Income as net income (loss), adjusted to exclude restructuring-related expenses in connection with the Powering Honest Growth.
We calculate Adjusted Gross Margin as gross margin, adjusted to exclude the restructuring-related expenses that are included in cost of revenue on the consolidated statements of comprehensive loss in connection with the Powering Honest Growth.
Organic Revenue, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Margin and Adjusted Net Income are financial measures that are not required by, or presented in accordance with GAAP. We believe that Organic Revenue, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Margin and Adjusted Net Income, when taken together with our financial results presented in accordance with GAAP, provides meaningful supplemental information regarding our operating performance and facilitates internal comparisons of our historical operating performance on a more consistent basis by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of Organic Revenue, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Margin and Adjusted Net Income are helpful to our investors as they are measures used by management in assessing the health of our business, determining incentive compensation and evaluating our operating performance, as well as for internal planning and forecasting purposes.
Additionally, we believe Adjusted Net Income, Adjusted Gross Margin and Organic Revenue is helpful to our investors as it adjusts for revenue sources that we exited in connection with Powering Honest Growth. We anticipate disclosing these measures until these costs/exited revenue streams are removed from the comparable prior period and when no additional costs are expected to be incurred in connection with Powering Honest Growth.
Adjusted EBITDA and Adjusted EBITDA Margin are presented for supplemental informational purposes only, have limitations as analytical tools and should not be considered in isolation or as substitutes for financial information presented in accordance with GAAP. Some of the limitations of Adjusted EBITDA and Adjusted EBITDA Margin include that (1) they do not reflect capital commitments to be paid in the future; (2) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA and Adjusted EBITDA Margin do not reflect these capital expenditures; (3) they do not consider the impact of stock-based compensation expense; (4) they do not reflect other non-operating expenses, including interest expense; (5) they do not reflect tax payments that may represent a reduction in cash available to us; and (6) they do not include certain non-ordinary cash expenses that we do not believe are representative of our business on a steady-state basis, such as executive officer transition expenses. In addition, our use of Organic Revenue, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Margin and Adjusted Net Income may not be comparable to similarly titled measures of other companies because they may not calculate Organic Revenue, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Margin and Adjusted Net Income in the same manner, limiting their usefulness as comparative measures. Because of these limitations, when evaluating our performance, you should consider Organic Revenue, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Margin and Adjusted Net Income alongside other financial measures, including our revenue, net income (loss) and other results stated in accordance with GAAP.
The following table presents a reconciliation of revenue, the most directly comparable financial measure stated in accordance with GAAP, to Organic Revenue, for each of the periods presented:
| For the three months ended | For the year ended | ||||||||||||||||||||||||||
| (In thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Reconciliation of Revenue to Organic Revenue | |||||||||||||||||||||||||||
| Revenue | $ | 88,037 | $ | 99,836 | $ | 371,317 | $ | 378,340 | |||||||||||||||||||
| Less revenue from: | %(1) | %(1) | %(1) | %(1) | |||||||||||||||||||||||
| Apparel | 9,801 | 11 | % | 16,579 | 17 | % | 38,483 | 10 | % | 46,204 | 12 | % | |||||||||||||||
| Honest.com | 6,360 | 7 | % | 11,573 | 12 | % | 35,338 | 10 | % | 48,558 | 13 | % | |||||||||||||||
| 587 | 1 | % | 910 | 1 | % | 3,351 | 1 | % | 4,310 | 1 | % | ||||||||||||||||
| Organic Revenue | $ | 71,289 | 81 | % | $ | 70,774 | 71 | % | $ | 294,145 | 79 | % | $ | 279,268 | 74 | % | |||||||||||
__________________
(1) Represents revenue as a percentage of total revenue.
| For the three months ended, | |||||||||||||||
| (In thousands) | |||||||||||||||
| Reconciliation of Revenue to Organic Revenue | |||||||||||||||
| Revenue | $ | 97,250 | $ | 93,459 | $ | 92,571 | $ | 88,037 | |||||||
| Less revenue from: | |||||||||||||||
| Apparel | 10,505 | 7,780 | 10,397 | 9,801 | |||||||||||
| Honest.com | 10,312 | 9,822 | 8,845 | 6,360 | |||||||||||
| 1,278 | 734 | 752 | 587 | ||||||||||||
| Organic Revenue | $ | 75,155 | $ | 75,123 | $ | 72,577 | $ | 71,289 | |||||||
The following table presents a reconciliation of net loss and net loss margin, the most directly comparable financial measures stated in accordance with GAAP, to adjusted EBITDA and Adjusted EBITDA Margin, for each of the periods presented:
| For the three months ended | For the year ended | |||||||||||||||
| (In thousands, except percentages) | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Reconciliation of Net Loss to Adjusted EBITDA | ||||||||||||||||
| Net loss | $ | (23,570 | ) | $ | (811 | ) | $ | (15,686 | ) | $ | (6,124 | ) | ||||
| Interest and other (income) expense, net | (609 | ) | (237 | ) | (2,979 | ) | (282 | ) | ||||||||
| Income tax provision | 10 | 19 | 204 | 75 | ||||||||||||
| Depreciation and amortization | 721 | 711 | 2,901 | 2,843 | ||||||||||||
| Stock-based compensation | 2,985 | 2,083 | 10,512 | 15,675 | ||||||||||||
| Securities litigation expense | 90 | 6,681 | 1,292 | 12,440 | ||||||||||||
| Executive officer transition expense(1) | 100 | — | 1,166 | 858 | ||||||||||||
| Restructuring-related costs(2) | 23,996 | — | 23,996 | — | ||||||||||||
| Payroll tax expense related to stock-based compensation | 29 | 95 | 415 | 373 | ||||||||||||
| Adjusted EBITDA | $ | 3,752 | $ | 8,541 | $ | 21,821 | $ | 25,858 | ||||||||
| Revenue | $ | 88,037 | $ | 99,836 | $ | 371,317 | $ | 378,340 | ||||||||
| Net loss margin | (26.8 | ) | % | (0.8 | ) | % | (4.2 | ) | % | (1.6 | ) | % | ||||
| Adjusted EBITDA Margin | 4.3 | % | 8.6 | % | 5.9 | % | 6.8 | % | ||||||||
____________________
(1) For the three months and year ended
(2) Refer to the table below for additional information on the restructuring costs incurred in connection with Powering Honest Growth for the three and twelve months ended
The following table presents a reconciliation of gross margin, the most directly comparable financial measure stated in accordance with GAAP, to Adjusted Gross Margin, for each of the periods presented:
| For the three months ended | For the year ended | |||||||
| (percent of revenue) | 2025 | 2024 | 2025 | 2024 | ||||
| Reconciliation of Gross Margin to Adjusted Gross Margin | ||||||||
| Gross margin | 15.7 | % | 38.8 | % | 33.3 | % | 38.2 | % |
| Restructuring-related costs(1) | 22.6 | % | — | % | 5.4 | % | — | % |
| Adjusted Gross Margin | 38.3 | % | 38.8 | % | 38.7 | % | 38.2 | % |
__________
(1) Represents restructuring-related expenses that are included in cost of revenue on the consolidated statements of comprehensive loss in connection with the Powering Honest Growth. Refer to the table below for additional information on the restructuring costs incurred in connection with Powering Honest Growth for the three and twelve months ended
The following table presents a reconciliation of net loss, the most directly comparable financial measure stated in accordance with GAAP, to Adjusted Net Income, for each of the periods presented:
| For the three months ended | For the year ended | ||||||||||||||
| (In thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||
| Reconciliation of Net Loss to Adjusted Net Income | |||||||||||||||
| Net loss | $ | (23,570 | ) | $ | (811 | ) | $ | (15,686 | ) | $ | (6,124 | ) | |||
| Restructuring-related costs(1) | 23,996 | — | 23,996 | — | |||||||||||
| Adjusted Net Income | $ | 426 | $ | (811 | ) | $ | 8,310 | $ | (6,124 | ) | |||||
__________
(1) Refer to the table below for additional information on the restructuring costs incurred in connection with Powering Honest Growth for the three and twelve months ended
Transformation 2.0: Powering Honest Growth
Costs associated with Powering Honest Growth for the three and twelve months ended
| For the three and twelve months ended | |||
| Cost of revenue(1) | $ | 19,837 | |
| Restructuring costs(2) | 4,159 | ||
| Total | $ | 23,996 | |
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(1) Cost of revenue relates to discrete inventory write-downs of
(2) Restructuring costs include contract and external obligation costs of
In future periods, we may incur other charges or cash expenditures not currently contemplated that may occur as a result of or in connection with Powering Honest Growth.
