Grove Collaborative (GROV) Q4 2024 earnings summary

Executive summary

• Achieved first sequential revenue growth since early 2022 in Q4 2024, marking a pivotal turnaround after 10 quarters of decline.

• Delivered positive adjusted EBITDA for full year 2024, with three consecutive quarters of positive operating cash flow.

• Voluntarily repaid $72 million in term debt, leaving only $7.5 million in asset-based loans and significantly improving the balance sheet.

• Completed acquisitions of Grab Green and 8Greens in Q1 2025, expanding into wellness and sustainable product offerings.

• Updated brand focus and tagline to prioritize both human and environmental health.

Financial highlights

• Q4 2024 revenue was $49.5 million, up 2.5% sequentially but down 17.4% year-over-year.

• Gross margin in Q4 2024 was 52.4%, down from Q3 but up to 53.8% for the full year.

• Adjusted EBITDA for Q4 2024 was −$1.6 million (−3.3% margin); full year 2024 Adjusted EBITDA was $1.3 million (0.6% margin).

• Operating cash flow was positive for three consecutive quarters in 2024.

• Ended Q4 2024 with $24.3 million in cash and $19.4 million in inventory, with a $31 million cash reduction mainly from debt repayment.

Outlook and guidance

• Q1 2025 expected to be the lowest revenue quarter due to seasonality and Shopify transition, with improvement through Q2 and Q3.

• Revenue projected to improve through Q2 and Q3, with low single-digit year-over-year growth in Q4 2025.

• Full-year 2025 revenue expected to be flat to down mid-single digits year-over-year; adjusted EBITDA expected to be break-even to low single-digit millions.

• Guidance includes contributions from Grab Green and 8Greens acquisitions.

• Brick-and-mortar business to be fully wound down by mid-2025, expected to strengthen the bottom line.