Grove Collaborative Reports 19% Revenue Decline to $43.5 Million in Q1 2025

Grove Collaborative Holdings, Inc. reported a net revenue of $43.5 million for the first quarter of 2025, a decline of 19% compared to $53.5 million in the same period of 2024. The decrease in revenue was primarily attributed to a reduction in direct-to-consumer (DTC) total orders, which the company linked to lower advertising expenditures and temporary disruptions during the transition from its legacy e-commerce platform to third-party service providers. The company's gross profit also fell to $23.1 million, down from $29.7 million a year earlier, resulting in a gross margin of 53%, a decrease from 56% in the prior year.

Operating expenses for the quarter totaled $26.6 million, down from $30.3 million in the previous year, driven by a reduction in selling, general, and administrative expenses, which decreased by 11% to $22.0 million. The company reported an operating loss of $3.5 million, compared to a loss of $0.5 million in the first quarter of 2024. Grove's net loss for the quarter was $3.5 million, slightly higher than the $3.4 million loss reported in the same quarter last year. The company’s accumulated deficit reached $652.1 million as of March 31, 2025.

In terms of strategic developments, Grove Collaborative made two acquisitions in early 2025, acquiring Grab Green and 8Greens, both of which focus on eco-friendly products. The total cash paid for these acquisitions was approximately $3.4 million. The company continues to focus on its direct-to-consumer model, having exited brick-and-mortar retail sales in late 2024, a move expected to enhance profitability without significantly impacting revenue.

Operationally, Grove reported 622,773 DTC total orders and 678,807 active customers as of March 31, 2025. The DTC net revenue per order increased to $66.49, up from $66.27 in the previous year, indicating a shift towards higher-priced items in the order mix. The company’s cash and cash equivalents stood at $9.6 million, with an additional $3.9 million in restricted cash. Grove's liquidity position remains a concern, as it incurred negative cash flows from operating activities of $6.9 million during the quarter.

Looking ahead, Grove Collaborative anticipates that the transition to third-party e-commerce solutions will yield long-term benefits, including improved scalability and enhanced user experience. However, the company acknowledges the risks associated with this transition, including potential service disruptions and changes in pricing. Management believes that existing resources will be sufficient to meet obligations for at least one year, but additional capital may be necessary to support future operations and growth initiatives.