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    GROV
    Earnings call· Jun 2026(Q2 FY26)

    Grove Collaborative Holdings Q2 FY26 earnings call GROV

    Aug 6, 2026 Source

    Executive summary

    Grove Collaborative Q2 FY26 — Sequential Revenue Growth and Positive Adjusted EBITDA

    Grove Collaborative delivered sequential revenue growth and its third consecutive quarter of positive adjusted EBITDA, demonstrating progress in its transformation plan. The company is focused on enhancing customer experience, expanding into new categories via dropship, and strategically increasing advertising investment to re-accelerate growth while maintaining financial discipline. The transition of the CFO is noted, with a search for a successor underway.

    Highlights

    5

    • Net revenue grew 1% sequentially to $36.6 million, marking a turnaround from prior declines.

    • Adjusted EBITDA was positive $0.5 million, representing the third consecutive quarter of positive adjusted EBITDA.

    • Operating cash flow was positive $1.3 million, reflecting strong working capital management and inventory reduction.

    • Net revenue per order increased 6% year-over-year to $69.19, driven by higher-priced items and promotional efficiency.

    • Outbound shipping costs improved due to an updated carrier strategy, contributing to a 27% year-over-year decrease in operating expenses.

    Concerns

    5

    • Net revenue declined 16.9% year-over-year, primarily due to a smaller active customer base and past e-commerce platform disruption.

    • DTC total orders decreased 23.6% year-over-year to 489,000.

    • Active customers totaled 509,000 at quarter end, down 23.3% versus the prior year.

    • Gross margin decreased 190 basis points year-over-year to 53.6%, impacted by one-time disposals.

    • CFO Tom Siragusa will be leaving the company on August 16th to pursue a new opportunity.

    Guidance & targets

    5
    CategoryTargetConfidence
    Full-year 2026 Net Revenue
    $142.5 million to $152.5 million
    high materiality
    High
    Full-year 2026 Adjusted EBITDA
    positive low single-digit millions
    high materiality
    High
    Net Revenue
    sequential improvement
    medium materiality
    High
    Advertising Investment
    disciplined increases
    medium materiality
    Medium
    Dropship Expansion
    expand into larger format categories
    low materiality
    Medium

    Operational metrics

    15
    Net revenue
    $36.6 million1% sequential increase
    Q2 FY26

    Up from Q1, but down 16.9% year-over-year.

    Adjusted EBITDA
    $0.5 millionpositive vs. negative $0.9 million in Q2 FY25
    Q2 FY26

    Third consecutive quarter of positive adjusted EBITDA.

    Net revenue per order
    $69.196.1% year-over-year increase
    Q2 FY26

    Driven by a larger mix of higher-priced items and greater efficiency in promotional spend.

    Cash, cash equivalents and restricted cash
    $11.4 millionup from $10.4 million at Q1 FY26 end
    Q2 FY26

    Primarily reflecting cash generated from operating activities.

    DTC total orders
    489,00023.6% year-over-year decline
    Q2 FY26

    Reflecting lagging effects of reduced advertising investment and e-commerce platform disruptions.

    Active customers
    509,00023.3% year-over-year decline
    Q2 FY26

    Reflecting lagging effects of reduced advertising investment and e-commerce platform disruptions.

    Advertising investment
    $1.2 million54.6% year-over-year decrease; slight increase QoQ
    Q2 FY26

    Increased from 3.2% of revenue in Q1.

    Product development expense
    $1.5 million31.4% year-over-year decrease
    Q2 FY26

    Reflecting lower personnel spend on own-brands development, prioritizing core technology and customer experience.

    SG&A
    $17.6 million23.2% year-over-year decrease
    Q2 FY26

    Driven by improvements to personnel cost structure, lower fulfillment costs, lower outbound shipping rates, and ongoing cost optimization.

    Net loss
    $0.9 millionvs. $3.6 million net loss in Q2 FY25
    Q2 FY26

    Year-over-year improvement reflects lower operating expenses, partially offset by lower revenue.

    Plastic intensity score
    0.9 poundsnew company low
    FY25

    Reported in the 2025 Annual Sustainability Report.

    Nature-bound plastic collected
    18.7 million pounds
    since 2020

    Collected through Repurpose Global.

    Plastic avoided by customers
    8.5 million pounds
    to date

    Through customers purchasing plastic-reducing products.

    Customer trust in Grove vs. Amazon/mass retailers
    9 out of 10
    February 2026

    Survey of approximately 1,000 Grove customers, showing trust in Grove for safe and healthy products.

    Subscription penetration
    80%
    Q2 FY26

    Subscriptions are present in more than 80% of orders.

    Industry KPIs

    5
    MetricValueDetails
    Sg a OPEX ratio$17.6 millionUSD
    Gross margin drivers53.6%%
    Active customers nspac509,000units
    Inventory position markdown risk—
    Distribution supply chain cost economics—

    Product announcements

    3
    ProductTypeDetails
    Updated subscription experiencelaunch
    Dropship capabilitieslaunch
    Relaunched mobile applicationroadmap

    Risks & headwinds

    5
    Year-over-year revenue declineQ2 FY26

    16.9% decrease

    Mitigation: Strategic advertising investment, improved customer experience, dropship expansion, Amazon channel growth.

    Smaller active customer baseQ2 FY26

    509,000 active customers, down 23.3% YoY

    Mitigation: Increased advertising investment, re-engaging lapsed customers, improved customer experience, new customer acquisition.

    E-commerce platform disruptionThroughout 2025, impacting Q2 FY26

    Lagging effects on customer attrition

    Mitigation: Enhanced e-commerce experience in place, focus on customer retention and acquisition.

    Gross margin decreaseQ2 FY26

    190 basis points decrease to 53.6%

    Mitigation: More targeted promotional strategy, Grove Green Rewards loyalty program.

    CFO transitionAugust 2026

    Tom Siragusa leaving August 16th

    Mitigation: Search for a successor underway.

    What to watch in Q3 FY26

    5

    Sequential revenue improvement

    Q3 FY26
    Current1% sequential growth in Q2 FY26
    TargetContinued sequential improvement

    Why it matters

    This is a key indicator of the company's ability to re-accelerate growth and move past prior year's challenges.

    Furthermore, we still expect sequential revenue improvement in each remaining quarter in 2026.

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Pillars and Financial Discipline

    Grove Collaborative is executing its transformation plan around four strategic pillars: sustainable profitability, balance sheet strength, revenue growth, and human/environmental health. The company achieved its third consecutive quarter of positive adjusted EBITDA and positive operating cash flow, demonstrating financial discipline. Operating expenses were reduced by 27% year-over-year, reflecting structural headcount reductions and lower shipping costs.

    02

    Revenue Stabilization and Growth Initiatives

    Net revenue grew 1% sequentially to $36.6 million, indicating stabilization after prior year's e-commerce platform migration and reduced advertising. Growth was driven by non-DTC channels like Amazon and QVC. The company plans to re-accelerate growth through a full-funnel approach to customer acquisition, including disciplined increases in advertising investment, supported by improved customer experience and unit economics.

    03

    Enhanced Customer Experience and Subscription Model

    An updated subscription experience was launched in Q2, designed to enhance the customer journey and drive retention and loyalty. Subscriptions are core to the business, present in over 80% of orders, allowing customers to build and adjust baskets of household essentials. The company also highlighted the upcoming relaunch of its mobile application as another customer experience improvement.

    04

    Dropship Capabilities and Amazon Channel Expansion

    Grove launched dropship capabilities, enabling expansion into new categories like mattresses and air filtration without inventory ownership costs. This strategy broadens assortment while maintaining balance sheet discipline. The company is also expanding its presence on Amazon, aiming to reach a substantial addressable market of shoppers seeking curated, trustworthy brands, without cannibalizing its D2C platform.

    05

    Focus on Human and Environmental Health

    The company is increasingly emphasizing human health, recognizing its inseparability from environmental health. Grove maintains stringent curation protocols, banning thousands of ingredients from its products. The 2025 Annual Sustainability Report highlighted a new company low plastic intensity score of 0.9 pounds per $100 of net revenue and over 18.7 million pounds of nature-bound plastic collected since 2020.

    06

    CFO Transition

    Tom Siragusa, CFO, will be departing Grove Collaborative on August 16th to pursue a new opportunity. Management acknowledged his instrumental contributions to the company's financial progress, including expense and balance sheet discipline. A search for his successor is currently underway, with updates to be provided as appropriate.

    AI-generated summary of the company’s earnings call. Not investment advice.