Grove Collaborative (NYSE:GROV) said it met its revised full-year 2025 revenue and adjusted EBITDA guidance and returned to positive adjusted EBITDA in the fourth quarter, as the company continued working through customer experience disruptions tied to an e-commerce platform migration.
CEO Jeff Yurcisin described 2025 as a challenging year, citing friction created by the platform transition—particularly across the mobile app, subscriptions, and the company’s VIP program—which contributed to higher churn than expected. CFO Tom Siragusa said the company deliberately reduced advertising investment and focused on protecting liquidity and profitability while addressing the customer experience issues.
Fourth quarter results and profitability focus
Grove posted net loss of $1.6 million in the quarter, compared with a net loss of $12.6 million in the prior-year period. Adjusted EBITDA was positive $1.6 million, compared with adjusted EBITDA of negative $1.6 million a year earlier. Yurcisin said the fourth quarter marked the company’s first positive adjusted EBITDA quarter in the last six quarters, reflecting a decision to prioritize liquidity and adjusted EBITDA profitability while fixing customer experience disruptions.
Siragusa highlighted reduced operating expenses and lower interest expense as contributors to the year-over-year improvement, as well as the absence of a non-cash loss on debt extinguishment that occurred in the fourth quarter of 2024 related to paying off a term loan.
Customer trends, orders, and unit economics
Grove ended 2025 with 599,000 active customers, down 13% from 689,000 at the end of 2024. Yurcisin said the ending customer base is the starting point for the company’s 2026 revenue expectations, but added that management does not view churned customers as “gone forever” and believes there is an opportunity to reactivate a meaningful portion over time as the platform stabilizes.
Direct-to-consumer total orders were 539,000 in the fourth quarter, down 25% year-over-year. Siragusa said the declines were driven primarily by headwinds tied to the e-commerce migration and lower advertising spend relative to prior years, which reduced new customer acquisition and, in turn, repeat orders.
Despite lower volume, DTC net revenue per order rose 4.1% year-over-year to $69.50, which Siragusa said reflected more targeted promotional strategies and a mix shift toward higher-priced items as the company expanded its selection. Gross margin was 53.0%, up 60 basis points from 52.4% in the prior-year quarter, driven primarily by lower promotional activity and partially offset by a non-recurring gross margin benefit in the prior-year period related to sell-through of previously reserved inventory.
Costs, cash flow, and balance sheet actions
Grove’s advertising spend was $1 million in the fourth quarter, a 65.2% decrease year-over-year. Siragusa said the reduction was a strategic decision to preserve liquidity and focus on optimizing the core experience across the web and app platforms. In the Q&A, Siragusa added that advertising spend fell from about $33 million in the third quarter to about $1 million in the fourth quarter, and he expects spending to be “in about the same range” in the first quarter, with the ramp dependent on the impact of customer experience improvements.
Product development expense was $1.9 million, down 59.2% year-over-year, reflecting a streamlined technology organization and lower amortization following the migration. Siragusa said Grove has also been more selective with owned-brand innovation in the near term, prioritizing resources toward stabilizing and improving core technology and customer experience. SG&A expense was $21.2 million, down 20.8% year-over-year, reflecting lower fulfillment costs from fewer orders, cost optimization initiatives, reduced depreciation and amortization, and lower stock-based compensation.
Yurcisin said the company executed a reduction in force in November that is expected to generate approximately $5 million of annualized savings, describing the move as necessary to align the cost structure with the current scale of the business and improve operating leverage.
Grove reported break-even operating cash flow in the fourth quarter, which Yurcisin said was the fifth quarter in the last eight with at least break-even or positive operating cash flow. The company ended the quarter with $11.8 million in cash equivalents and restricted cash, down from $12.3 million at the end of the third quarter, which Siragusa said primarily reflected cash used in investing and financing activities.
Platform stabilization, loyalty, and subscription improvements
Management emphasized that restoring a reliable customer experience is the primary driver of its 2026 plan. Yurcisin said Grove now has clarity on the root causes of the platform issues and is making progress on fixes. The company launched a loyalty program, Grove Green Rewards, in the fourth quarter, which is designed to deepen engagement and reward repeat behavior through features including a sign-up bonus, differentiated earn rates for VIP customers, enhanced earning on subscriptions, and points-based promotions and exclusive VIP deals. Yurcisin also said the program enables rewards to be incorporated into new customer offers and allows referral capabilities to be reintroduced.
In February, Grove launched a redesigned mobile app after moving away from a prior third-party approach and rebuilding a custom app. Yurcisin said the release restores much of the functionality customers had prior to the migration, though he noted there is still work ahead to improve performance in coming quarters.
Subscriptions were described as a key retention and lifetime value driver that was negatively impacted by the migration. Yurcisin said subscription units drove 60% of 2025 revenue and orders with subscriptions represented 79% of total orders. He added that by the time the company reports second quarter earnings, it expects to have “meaningfully improved” the subscription experience for customers who want regular deliveries of home essentials.
2026 outlook and strategic priorities
For full-year 2026, Grove expects net revenue of approximately $140 million to $150 million and adjusted EBITDA of approximately break-even. Siragusa said the company expects the first quarter to represent the trough in revenue due to seasonality and continued disciplined advertising investment, followed by sequential improvement as customer experience enhancements support retention and enable a measured re-acceleration of customer acquisition investment throughout the year.
In the Q&A, Yurcisin said sequential improvement is expected to be driven primarily by customer experience upgrades—including the new mobile app, the loyalty program, and planned subscription improvements—alongside increased marketing spend as repeat rates improve and lifetime value-to-customer acquisition costs and paybacks strengthen.
Yurcisin also discussed expanding Grove’s ingredient standards in the first quarter of 2026 to cover more than 10,000 banned or restricted ingredients, including more than 3,000 outright bans across every category carried. He said the standards are informed by EU safety frameworks and are intended to further differentiate Grove as a trusted curator.
On category expansion, Yurcisin said the company sees most opportunity within its core categories, with potential adjacencies tied to a broader view of wellness and the “healthy home.” He added that Grove plans to enable some dropship capabilities in 2026, which he said would allow entry into higher average order value categories with appropriate economics.
Finally, Yurcisin said Grove continues to evaluate strategic options to maximize shareholder value, including potential acquisitions or partnerships and divestitures, while remaining guided by customer focus, capital efficiency, and sustainable shareholder value creation.
About Grove Collaborative (NYSE:GROV)
Grove Collaborative is a direct-to-consumer digital marketplace offering a broad assortment of sustainable home and personal care products. Operating as a public benefit corporation, the company provides an online platform designed to simplify the shopping experience for eco-friendly essentials, including cleaning supplies, personal care items, baby and family products, wellness goods and pet care.
The company’s business model centers on a subscription-based delivery service that enables members to schedule regular shipments of both third-party and private-label products.
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