Grove Collaborative Holdings, Inc. Q1 FY2026 earnings call

Sustained Profitability: Delivered adjusted EBITDA of $0.3 million in first quarter, second consecutive positive adjusted EBITDA. Grove Green Rewards loyalty program launched in Q4, enabling structural shift in promotions, contributing to gross margin improvement. ### Balance Sheet Strength: Managed balance sheet with discipline, ended quarter with $10.4 million in cash, etc., operating cash flow negative $0.7 million due to inventory increase, improvement from prior year. ### Revenue Growth: Net revenue $36.2 million, down 16.8% YOY. Redesigned mobile app launched in February, early response encouraging. Progress on improved subscription experience. Disciplined advertising investment in Q1, confidence in increasing investment due to metric improvements. ### Environmental and Human Health: Onboarded chief medical advisor, establishing human health advisory council, onboarding physician advisors. Launched The Unplastic Shop with Oceanic Preservation Society, investments in clinical expertise, etc.

Net revenue was $36.2 million in the first quarter, down 16.8% year-over-year. Adjusted EBITDA was $0.3 million, second consecutive quarter of positive adjusted EBITDA. Gross margin was 54.8%, up 180 basis points year-over-year. Mobile app redesigned in February, subscriptions making progress, advertising investment disciplined. Balance sheet ended quarter with $10.4 million in cash, etc., operating cash flow negative $0.7 million primarily due to inventory increase.

Full year 2026 guidance: Now expects revenue of $142.5 million to $152.5 million (up from $140 to $150 million), adjusted EBITDA break-even to positive low single-digit millions (up from approximately break-even). ### Revenue trough: Expect first quarter 2026 to be revenue trough, with sequential improvement in remaining quarters.

Q: Walk through how first quarter was outperformance, drivers like Iran conflict, app experience, Netflix documentary?

A: Customer experience drivers like app relaunch with five-star reviews, Green Grove Rewards improving gross margin and revenue stability. App relaunched roughly mid-February. Best e-commerce measures LTV to CAC, early cohorts strong. Shift into human health story critical.

Q: When was app issue fully resolved?

A: Roughly mid-February.

Q: On gross margins, other drivers besides loyalty program?

A: Operating more efficiently, strength at AOV.

Q: On Green Rewards program signup?

A: Majority active customers members, details on new customers not disclosed but adoption rates from new customers into VIP part improving.

Q: Impact of IEPA tariffs?

A: 2026 guide assumes continuation of current trade policy, pursuing clawback but no update to guide towards.