Grove Collaborative Holdings, Inc. reported Q2 2026 revenue of $36.6M, a 1% sequential increase but down 16.9% YoY, reaffirming guidance for the year.
Grove Collaborative Holdings, Inc. reported Q2 2026 net revenue of $36.6 million (USD), a 1% sequential increase but a decline of 16.9% year-over-year, missing the consensus estimate of $38.5 million. The results reflect ongoing efforts to stabilize revenue after a challenging previous year, but the company faces the task of re-engaging a shrinking customer base amidst reduced advertising investment.
Key Takeaways
- Net revenue grew 1% sequentially to $36.6 million but saw a decline of 16.9% year-over-year.
- Adjusted EBITDA was positive at $0.5 million, marking the third consecutive quarter of positive adjusted EBITDA and improved profitability metrics.
- Operating cash flow was $1.3 million, indicating effective cash management and operational efficiency.
- Active customers decreased to 509,000, down 23.3% year-over-year, reflecting the impact of prior advertising reductions and e-commerce platform disruptions.
- D2C net revenue per order increased by 6.1% year-over-year to $69.19, driven by higher-priced items and improved promotional strategies.
Sequential Revenue Growth Amid Year-Over-Year Decline
Net revenue for Q2 2026 was $36.6 million, showing a 1% quarter-over-quarter growth but down 16.9% compared to the same quarter last year. This growth was largely supported by improved performance in non-D2C channels, including Amazon and QVC, while the direct-to-consumer (D2C) segment's revenue faced slight declines. The year-over-year drop in revenue is attributed to a smaller active customer base and previous advertising cutbacks that have yet to yield significant growth in customer acquisition.
| Metric | Q2 2026 | YoY | QoQ |
|---|---|---|---|
| Revenue | $36.6M | -16.9% | +1% |
| Adjusted EBITDA | $0.5M | -- | -- |
| Active Customers | 509,000 | -23.3% | -- |
| D2C Net Revenue per Order | $69.19 | +6.1% | -- |
Focus on Customer Experience and Cost Efficiency
During the quarter, Grove took significant steps to enhance the customer experience and improve cost efficiency. The company launched a revamped subscription service, which allows customers to curate their own orders of household essentials, aiming to foster retention and loyalty. Operating expenses decreased by 27% year-over-year, driven by structural changes including headcount reductions and lower shipping costs, contributing to an adjusted EBITDA margin of 1.3% for the quarter. This marks the third consecutive quarter of positive adjusted EBITDA, indicating improving unit economics.
“We are continuing to see progress on the top line while executing with financial discipline,” said CEO Jeff Yerkessen, emphasizing the importance of a sustainable growth model.
Guidance Reaffirmed Amid Challenges
Grove reiterated its guidance for full-year 2026, expecting net revenue between $142.5 million and $152.5 million and adjusted EBITDA to be break-even to positive low single digits. The company aims for sequential revenue improvement in each remaining quarter of the year, leveraging its enhanced advertising strategy and customer experience initiatives. The management's focus remains on re-engaging lapsed customers and attracting new ones through improved brand awareness and loyalty programs.
Analyst Q&A Highlights
During the analyst Q&A, a question from an analyst at Stifel raised concerns about the declining active customer base and the effectiveness of the company's advertising strategy. In response, management acknowledged that the reduction in advertising has had a noticeable impact, but emphasized their belief in the long-term benefits of prioritizing profitability and customer experience over immediate growth. They expressed confidence in their ability to attract customers back to the platform with the improvements they have implemented.
Frequently Asked Questions
Did Grove Collaborative Holdings, Inc. beat earnings estimates in Q2 2026?
Grove Collaborative missed earnings estimates for Q2 2026, reporting net revenue of $36.6 million against the consensus estimate of $38.5 million.
What is the adjusted EBITDA for Grove in Q2 2026?
Grove reported an adjusted EBITDA of $0.5 million for Q2 2026, marking the third consecutive quarter of positive adjusted EBITDA.
How many active customers does Grove Collaborative have?
As of Q2 2026, Grove Collaborative has 509,000 active customers, down 23.3% compared to the prior year.
What are Grove’s revenue expectations for 2026?
Grove expects net revenue to be between $142.5 million and $152.5 million for the full year 2026, reaffirming this guidance during the earnings call.
In closing, while Grove has made strides in operational efficiency and customer experience, the company must address the significant decline in active customers and revenue year-over-year to achieve its growth targets in the upcoming quarters.
This analysis is based on public earnings call materials and is not investment advice.
