10-K: Grove Collaborative Battles Declining Revenue, NYSE Delisting Threat

Grove Collaborative Holdings, Inc. reports a 15% revenue decline and negative Adjusted EBITDA for 2025, alongside an ongoing NYSE delisting threat and a legal investigation into its auto-renewal practices.

Summary

• Net revenue decreased by 15% to $173.7 million in 2025 from $203.4 million in 2024, primarily due to lower advertising spend and disruptions from an ecommerce platform migration.
• The company reported a net loss of $11.7 million in 2025, an improvement from a $27.4 million net loss in 2024.
• Adjusted EBITDA turned negative at $(2.2) million in 2025, compared to a positive $1.3 million in 2024.
• DTC Total Orders decreased to 2.42 million in 2025 from 2.93 million in 2024.
• DTC Active Customers declined to 599,000 in 2025 from 688,000 in 2024.
• DTC Net Revenue Per Order remained stable at $67 in both 2025 and 2024.
• An accumulated deficit of $660.2 million was reported as of December 31, 2025.
• The company received a NYSE notice in May 2025 for non-compliance with the Minimum Market Capitalization Standard ($50 million market cap and $50 million stockholders' equity) and has an 18-month cure period.
• Exited the brick-and-mortar retail business in 2025, a strategic decision made in October 2024.
• Migrated its ecommerce platform to third-party service providers in March 2025, experiencing disruptions.
• Implemented a reduction in corporate workforce of approximately 30% in November 2025 as part of cost-cutting initiatives.
• Acquired MaddieBrit Products, LLC (Grab Green) and Tasty Greens, LLC (8Greens) in the first quarter of 2025 for a combined cash consideration of $2.8 million.
• Launched the Green Rewards customer loyalty program in December 2025.
• The Class B Common Stock automatically converted to Class A Common Stock in February 2025 and was retired in April 2025.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing with a negative sentiment due to significant revenue declines, negative Adjusted EBITDA, and the ongoing NYSE delisting threat, despite efforts to cut costs and improve operational efficiency.

Positives

• Net loss significantly improved to $11.7 million in 2025 from $27.4 million in 2024, indicating progress in reducing overall losses.
• Net cash used in operating activities decreased to $7.0 million in 2025 from $9.7 million in 2024, reflecting improved operational cash management.
• Successful completion of the wind-down of the brick-and-mortar retail business in 2025, expected to improve profitability.
• Transitioned to third-party ecommerce platform providers, aiming for enhanced scalability, advanced functionalities, and improved security.
• Launched the Green Rewards customer loyalty program in December 2025 to enhance customer engagement and incentivize repeat purchases.
• Science-based targets were approved by the Science Based Targets Initiative (SBTi) in 2025, guiding decarbonization efforts.
• Recertified as a B Corporation in 2024 with an improved score of 100.9, demonstrating continued commitment to social and environmental well-being.
• Internal control over financial reporting was deemed effective as of December 31, 2025.

Negatives

• Revenue decreased by 15% to $173.7 million in 2025, marking a third consecutive year of decline.
• Adjusted EBITDA turned negative to $(2.2) million in 2025 from a positive $1.3 million in 2024.
• DTC Total Orders decreased by 17.4% and DTC Active Customers decreased by 12.9% in 2025, indicating challenges in customer acquisition and retention.
• The company has an accumulated deficit of $660.2 million as of December 31, 2025, and expects to incur significant expenses and operating losses for the foreseeable future.
• Received a NYSE notice in May 2025 for non-compliance with the Minimum Market Capitalization Standard, posing a delisting risk.
• Experienced and expects to continue experiencing disruptions to platform operations (user experience, inventory management, fulfillment, payment processing) due to the ecommerce platform migration.
• A reduction in corporate workforce of approximately 30% in November 2025, while intended for cost savings, could lead to loss of expertise and decreased morale.
• Cash and cash equivalents decreased to $8.5 million as of December 31, 2025, from $19.6 million in 2024.

Risks

• Reliance on consumer discretionary spending, which may be adversely affected by macroeconomic conditions.
• Advertising inaccuracies or product mislabeling may lead to lawsuits, recalls, or regulatory actions.
• Inability to achieve profitable growth in the future due to declining revenues.
• Disruptions from outsourcing the ecommerce platform to third-party service providers.
• Fluctuating quarterly operating results due to various factors beyond control.
• Requirement for additional financing, which may not be available on acceptable terms or at all, potentially delaying strategic initiatives.
• Intense competition from a broad array of companies in evolving markets.
• Failure to cost-effectively acquire new customers or retain existing ones.
• Reduced advertising and marketing spending may adversely affect brand awareness.
• Brand and reputation may be diminished due to real or perceived quality, safety, efficacy, or environmental impact issues with products.
• Failure to introduce new products that meet customer expectations.
• Unfavorable changes in or failure to comply with government regulation of the Internet and ecommerce.
• Potential product liability claims, which could materially harm business and liquidity.
• Subject to numerous laws and regulations (FDA, CPSC, EPA, FTC, state laws like California's Proposition 65 and automatic renewal laws), with potential for fines, penalties, or injunctions.
• Risks associated with pursuing acquisitions, including integration difficulties and potential impairment charges.
• Damage or destruction to distribution centers due to natural disasters or other events.
• Dependence on the management team; loss of key employees could harm the business.
• Corporate cost-cutting initiatives and headcount reductions could disrupt business and may not achieve objectives.
• Labor-related matters, including labor disputes, may adversely affect operations.
• Risks associated with outsourcing sourcing, manufacturing, warehousing, distribution, infrastructure, and logistics to third-party providers, including international ones.
• Changes in shipping arrangements or interruptions in shipping could adversely affect operating results.
• Risks related to online payment methods, including third-party payment processing and fraud.
• Inability to adequately obtain, maintain, protect, defend, and enforce intellectual property rights.
• Reliance on trademark, copyright, patent law, trade secret protection, and confidentiality agreements may be insufficient.
• Claims that employees, consultants, or contractors have wrongfully used or disclosed confidential information of third parties.
• Indemnity provisions in agreements potentially expose the company to substantial liability for intellectual property infringement.
• Failure to successfully maintain, scale, and upgrade information technology systems.
• Inability to protect against or adequately respond to service interruptions, data corruption, or cybersecurity attacks.
• Use of open source software in the platform may subject the company to additional risks and harm intellectual property.
• Actual or perceived failure to comply with applicable privacy and data protection laws (e.g., CCPA, CPRA, CDPA) could have an adverse effect.
• Changes in existing laws or regulations or the adoption of new ones (e.g., tariffs, MOCRA, Green Guides) may increase costs.
• Failure by partners, suppliers, or manufacturers to comply with laws and regulations or product specifications.
• Status as a public benefit corporation and Certified B Corporation may not result in anticipated benefits or may lead to actions that do not maximize stockholder value.
• Increased derivative litigation concerning the duty to balance stockholder and public benefit interests as a public benefit corporation.
• Potential litigation against the company, its directors, and executive officers for various claims.
• Volatility in the price of Class A Common Stock and warrants.
• Dilution to stockholders from exercisable warrants and future share issuances.
• Public Warrants may expire worthless or be amended adversely.
• Redemption of unexpired Public Warrants prior to exercise at a disadvantageous time.
• Reliance on emerging growth company exemptions may make securities less attractive to investors.
• Incurrence of debt or contingent liabilities or dilution of stockholders in connection with acquisitions or strategic alliances.
• Future sales, or the perception of future sales, by the company or its stockholders could cause the market price to decline.
• NYSE may delist securities from trading, limiting investor ability to transact and subjecting to additional restrictions.
• No current plans to pay cash dividends on Class A Common Stock.
• Rights, preferences, and privileges of Series A Preferred Stock and Series A' Preferred Stock may limit business flexibility or reduce Class A Common Stock value.
• Covenants and other provisions in loan agreements restrict business and operations, and operations may not provide sufficient cash for debt repayment.
• Lack of research or reports by securities analysts or downgrades could cause stock price and trading volume to decline.
• Significant expenses and administrative burdens as a public company.
• Inability to maintain effective internal control over financial reporting could lead to loss of investor confidence.
• Delaware law and governing documents contain anti-takeover provisions.

Future Outlook

Management believes existing cash and cash equivalents will fund operations for at least the next 12 months, but additional longer-term financing will be required. The company expects to continue incurring significant expenses and operating losses. It anticipates continued disruptions from the ecommerce platform migration and ongoing macroeconomic factors to adversely impact financial performance in the near to medium term. Efforts are focused on re-investing to expand the DTC business and achieve scale for profitability, though recent gains in approaching profitability may not be sustainable in the near term.

Management Comments

• "We continue to believe that there are long term growth trends in the reduced-plastic waste and personal health industries and that we will be able to grow our business in the long run."
• "Our key long-term strategic advantage comes from a combination of our authentic mission and our direct relationships with customers."
• "We believe that improved innovation grows both revenue and, over the long term, can expand margins as our innovation has historically tended to be both market expanding and margin accretive."
• "To grow and achieve profitability over the longer term, we will need to re-invest to expand our DTC business and achieve a scale that will allow us to drive efficiencies in generating brand awareness, acquiring and retaining customers, creating operating leverage over headcount and other overhead, and fulfilling orders."
• "Management believes that currently available resources will provide sufficient funds to enable us to meet our obligations for at least one year following the date these consolidated financial statements are available to be issued."

Industry Context

StockSavvy.ai notes that Grove Collaborative operates in a highly competitive and rapidly evolving market for natural, sustainable, and wellness consumer products. The industry is seeing increasing consumer demand for planet-first, high-performance brands, which aligns with Grove's mission. However, the company faces significant competition from both established CPG brands and emerging online retailers, many of whom have greater resources and established distribution networks. The shift towards reduced-plastic waste and personal health trends offers long-term growth opportunities, but macroeconomic headwinds, such as inflationary pressures and reduced consumer discretionary spending, are impacting the broader market, making customer acquisition and retention more challenging for all players.

Comparison to Industry Standards

• Grove Collaborative's mission to transform the consumer products industry into a force for environmental and human good, as a public benefit corporation and Certified B Corporation, sets it apart from many traditional CPG companies. Its B Corp score of 100.9 in 2024 is more than 20 points higher than its 2020 recertification, indicating strong performance against third-party social and environmental standards, which is a competitive advantage compared to companies like Procter & Gamble or Unilever that face increasing pressure to adopt similar sustainability metrics.
• The company's commitment to plastic neutrality (recovering an equal amount of ocean-bound plastic for every ounce sold) and carbon-neutral shipping since 2019, along with SBTi-approved science-based targets, positions it ahead of many industry peers in environmental stewardship, such as traditional retailers who are still developing comprehensive sustainability programs.
• Grove's strict 'No Way Ingredients' list and vetting process for over 400 third-party brands on its DTC platform exceed the ingredient transparency and safety standards of many conventional retailers and CPG brands, appealing to a niche but growing segment of health-conscious consumers, similar to the standards upheld by specialty retailers like Thrive Market or Whole Foods Market.

Management Changes

Corporate Governance

Legal Proceedings

• The Consumer Protection Division of the Santa Clara County District Attorney's Office, in conjunction with other California county and city prosecutors, is currently investigating the company's compliance with California's Automatic Renewal Law, Unfair Competition Law, and False Advertising Law. It is probable that the company will incur a loss, but the amount is not reasonably estimable at this time.

Related Party Transactions

• The company entered into a subscription agreement with Volition Capital Fund IV, L.P. (Volition) for Series A Preferred Stock ($10.0 million in 2023) and Series A' Preferred Stock ($15.0 million in 2024). In connection with the Series A' issuance, Volition Warrants were cancelled and Series A Preferred Stock redemption terms were modified.
• The company has a Standby Equity Purchase Agreement (SEPA) with YA II PN, LTD (Yorkville) to sell up to $100 million of common stock. The agreement was amended on July 8, 2025, extending the term to August 1, 2027.

Stakeholder Impact

• **Shareholders:** Face significant dilution risk from potential future equity raises and warrant exercises. The NYSE delisting threat could severely impact stock liquidity and value. The duty as a public benefit corporation to balance interests may not always maximize shareholder value.
• **Employees:** Experienced a 30% corporate workforce reduction in November 2025, potentially impacting morale and institutional knowledge. The company emphasizes competitive compensation and benefits to attract and retain talent.
• **Customers:** May experience disruptions from the ecommerce platform migration. The new Green Rewards loyalty program aims to enhance engagement. The company's commitment to sustainability and product vetting aligns with environmentally and health-conscious consumers.
• **Suppliers:** Reliance on a limited number of third-party suppliers and manufacturers, particularly international ones, exposes them to risks of price fluctuations, supply disruptions, and compliance with ethical practices and regulations.
• **Creditors:** The Siena Revolver debt facility has been amended to extend maturity and eliminate financial covenants, providing some flexibility, but the company's ongoing losses and need for additional financing pose risks to repayment capacity.

Next Steps

• Continue efforts to return to compliance with NYSE listing standards within the 18-month cure period, which involves improving market capitalization and stockholders' equity.
• Address and resolve ongoing disruptions to the ecommerce platform operations following the migration to third-party service providers.
• Re-invest to expand the DTC business and achieve scale to drive efficiencies and profitable growth.
• Manage the ongoing investigation by the Santa Clara County District Attorney's Office regarding automatic renewal practices and potential liabilities.
• Evaluate the impact of new accounting standards (ASU 2024-03 and ASU 2025-06) on financial statement presentation and disclosures.
• Pursue additional financing through the Amended SEPA, new equity offerings, or debt financings as required by the longer-term operating plan.

Key Dates

Recommendation

The filing reveals a company in significant distress. Grove Collaborative has experienced three consecutive years of revenue decline, moved from positive to negative Adjusted EBITDA, and faces a serious NYSE delisting threat due to insufficient market capitalization and stockholders' equity. While management is implementing cost-cutting measures and strategic shifts, these have also caused operational disruptions. The need for additional financing, coupled with a limited ability to raise capital through the existing SEPA at current stock prices, indicates ongoing liquidity challenges. The accumulated deficit of $660.2 million and continued operating losses suggest a difficult path to profitability. Given these substantial headwinds and the high risk of further value erosion, a 'sell' recommendation is warranted for investors.

Keywords

Sustainable Consumer Products, Ecommerce, Natural Household Goods, B Corporation, DTC Platform, SEC 10-K, Financial Performance, Revenue Decline, Adjusted EBITDA, NYSE Delisting, Cost Reduction, Workforce Restructuring, Platform Migration, Customer Loyalty Program, Acquisitions, Corporate Governance, Risk Factors, Liquidity, Capital Raise, Debt Financing, Shareholder Dilution, Environmental Health, Human Health, Plastic Neutrality, Carbon Neutral, Supply Chain, Regulatory Compliance, Privacy Laws