GROV · Grove Collaborative Holdings, Inc.

Grove Collaborative delivered a materially improved Q1 2026, achieving positive Adjusted EBITDA ($0.3M) for the second consecutive quarter despite net revenue declining 16.8% YoY to $36.2M — a result management explicitly identified as the expected trough for the year. The profitability inflection reflects structural cost discipline: operating expenses fell 21.9% YoY to $20.8M, driven by the November 2025 reduction in force, lower advertising spend, and reduced fulfillment costs. Gross margin expanded 180 bps to 54.8%, attributable to the strategic shift from broad discounting to the Grove Green Rewards loyalty program launched in Q4 2025, which enabled more efficient, targeted incentives. While DTC Active Customers declined 18.5% YoY to 553,000 — consistent with prior-year ecommerce platform disruptions and reduced marketing investment — DTC Net Revenue Per Order rose 2.0% to $67.79, signaling stronger basket quality and category mix expansion in clean beauty and wellness. Management emphasized that early repeat order rates among recent cohorts have rebounded to pre-migration levels, validating platform stabilization and supporting a measured re-acceleration of advertising spend. This operational progress underpins the raised full-year guidance: net revenue now projected at $142.5–$152.5M (up from $140–$150M) and Adjusted EBITDA upgraded to breakeven to positive low single-digit millions. The company ended the quarter with $10.4M in cash, though down from $11.8M at year-end, reflecting inventory build and mobile app development investment. Forward-looking confidence rests on execution continuity — not new initiatives — with sequential revenue growth expected each quarter through 2026.