Grove Collaborative reported fiscal third‑quarter 2025 results that showed a 9.4 % year‑over‑year decline in revenue to $43.7 million, a 0.7 % sequential drop from the $44.1 million reported in Q2 2025. The decline reflects the ongoing impact of the company’s e‑commerce platform migration and a strategic reduction in advertising spend aimed at tightening cost discipline.
Gross margin expanded to 53.3 %, up 30 basis points from the 52.3 % margin reported in the same quarter last year. The improvement is driven by a higher mix of higher‑margin product categories and better cost of goods sold management, offsetting the revenue decline. Operating expenses fell 19.5 % to $26.1 million, largely due to lower stock‑based compensation and reduced fulfillment costs associated with the platform transition.
The quarter ended with a net loss of $3.0 million and an adjusted EBITDA of negative $1.2 million. The negative EBITDA reflects the one‑time costs of migrating the e‑commerce platform and the temporary reduction in advertising spend, which have short‑term negative cash flow implications but are expected to support long‑term profitability.
Operating cash flow was a $1.0 million outflow, but the company’s cash and cash equivalents stood at $12.3 million as of September 30, 2025. The cash cushion provides a buffer as Grove Collaborative continues to invest in the platform transition while managing operating expenses.
Management reiterated that full‑year revenue is expected at the lower end of its guidance range and that it no longer anticipates year‑over‑year growth in the fourth quarter. The company remains focused on cost discipline, margin improvement, and completing the platform transition to support future growth. The results underscore Grove Collaborative’s shift from a growth‑at‑all‑costs model to a disciplined, profitability‑focused strategy, with margin gains and expense reductions signaling progress toward that goal.
The company’s cash position and margin improvement provide a foundation for restoring top‑line momentum, but the revenue decline and negative EBITDA highlight the short‑term challenges of the platform migration and the need for continued cost control. Management’s emphasis on completing the transition and maintaining disciplined spending signals confidence in the company’s long‑term profitability trajectory.
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