Loading...
01/10 16:12
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights challenges like declining revenue, negative EBITDA, and market cap compliance issues, overshadowing slight sequential revenue growth and improved gross margins. The Q&A reveals concerns about revenue per order and unclear responses on sales breakdown. Despite improved marketing returns and cost-cutting, the negative financial metrics and competitive pressures indicate a likely negative stock reaction.
Adjusted EBITDA Negative $0.9 million (compared to positive $1.1 million in Q2 2024), a negative 2.1% margin. The decline was primarily driven by the short-term revenue impact of the eCommerce platform migration, offset by cost structure improvements.
Revenue $44 million, down 15.5% year-over-year but up 1.1% sequentially. The year-over-year decline was due to reduced advertising spend in 2024 and prior years, resulting in fewer new and repeat customers, as well as the eCommerce platform migration.
Total Orders 640,000, a decline of 12.6% year-over-year but an increase of 3.4% compared to the first quarter. The year-over-year decline was due to reduced advertising in 2024 and prior periods, while the sequential increase reflects early momentum in rebuilding the business.
Active Customers 664,000, down 10.9% year-over-year and 2.2% compared to the first quarter. The decline was consistent with reduced advertising in 2024 and prior periods.
DTC Net Revenue Per Order $65.22, down 3.7% year-over-year. The decrease was driven by a temporary increase in low-value shipments and the removal of select customer fees in June 2024.
Gross Margin 55.4%, up 150 basis points compared to 53.9% in the prior year. The improvement was due to an increase in third-party vendor funding and improved promotional strategies, resulting in lower discounts.
Advertising Investment $2.7 million, an 11.6% increase year-over-year. The increase reflects a disciplined return to customer acquisition growth and strong performance in new customer acquisition.
Product Development Expense $2.2 million, a decline of 59.4% year-over-year. The decline reflects a streamlined technology organization and lower depreciation costs following the eCommerce platform migration.
SG&A Expense $23 million, a 15.4% decrease year-over-year. The reduction was driven by lower stock-based compensation, reduced depreciation and amortization, lower fulfillment costs, and broader cost-saving initiatives, offset by fees and expenses to support acquisitions.
Net Loss Negative $3.6 million (compared to negative $10.1 million in Q2 2024). The improvement reflects lower interest expense and operating expenses.
Cash, Cash Equivalents, and Restricted Cash $14 million, up from $13.5 million in the first quarter. The increase reflects positive operating cash flow of $1 million, driven by working capital discipline, particularly inventory improvements.
Inventory Balance $20.7 million, a decrease of $1.3 million from Q1, reflecting continued focus on improving days on hand.
eCommerce platform migration: Transitioned to a modern, scalable platform with third-party technology providers in March, enabling more flexibility and efficiency. Short-term operational friction was resolved by the end of Q2 2025.
Third-party assortment expansion: Increased the number of brands offered by 47% and individual products by 59% year-over-year, focusing on high-potential categories like clean beauty, personal care, pantry, wellness, and baby.
Market positioning: Positioned as a leading marketplace for curated, clean, sustainable products, addressing consumer concerns about ingredient safety, product standards, and environmental impact.
Microplastics awareness: Launched survey research in partnership with the 5 Gyres Institute, highlighting consumer concerns about microplastics and advocating for the Bipartisan Microplastics Safety Act.
Cost structure improvements: Achieved a gross margin of 55.4%, up 150 basis points year-over-year, through targeted promotional strategies and increased third-party vendor funding.
Cash flow and liquidity: Delivered positive operating cash flow of $1 million and total cash flow of $0.4 million in Q2 2025. Amended and extended the asset-based loan facility to 2028, improving financial flexibility.
Collaboration with HumanCo: Established a working group with HumanCo to identify and pursue avenues for unlocking greater shareholder value.
Advertising investment: Increased advertising spend by 11.6% year-over-year to drive customer acquisition and rebuild durable growth.
Operational Friction from Platform Migration: The transition to a modern, scalable eCommerce platform caused short-term operational disruptions, impacting revenue and customer experience. Although major issues were resolved, potential ongoing impacts remain a concern.
Declining Revenue and Customer Base: Revenue for Q2 2025 declined 15.5% year-over-year, and active customers decreased by 10.9%. Reduced advertising spend in prior years has led to fewer new and repeat customers, impacting the company's top-line performance.
Negative Adjusted EBITDA: Adjusted EBITDA for Q2 2025 was negative $0.9 million, reflecting lower revenue and ongoing challenges in achieving sustained profitability.
Market Capitalization Compliance: The company received a notice from the NYSE for falling below the $50 million market capitalization threshold. Although a compliance plan was accepted, the company has 18 months to regain compliance, posing a risk to its stock listing.
Supply Chain and Inventory Management: While inventory levels improved, the company continues to face challenges in optimizing inventory and managing working capital effectively.
Economic and Competitive Pressures: The company operates in a highly competitive market with pressures from larger players like Amazon. Economic uncertainties and consumer spending behavior also pose risks to growth.
Revenue Expectations: Continued sequential revenue growth is expected in the second half of 2025, with slight year-over-year growth anticipated in the fourth quarter. Full-year 2025 revenue is projected to decline approximately mid-single-digit to low double-digit percentage points year-over-year.
Adjusted EBITDA Projections: Full-year 2025 adjusted EBITDA is expected to range from negative low single-digit millions to breakeven. The guidance has been narrowed to the lower end of the previously provided range.
Revenue Growth Milestone: The first quarter of 2025 is expected to be the lowest revenue quarter going forward, marking a turning point in the company's revenue trajectory.
Market Capitalization Potential: The company envisions a scenario where it becomes profitable, generating over $300 million in annual revenue, growing at a high single to low double-digit rate, potentially commanding a revenue multiple in the range of 1 to 2x, leading to a market capitalization approximately 6 to 10x greater than current levels.
The selected topic was not discussed during the call.
The earnings call summary reflects several challenges: a decline in active customers, negative adjusted EBITDA, and a widening net loss. Despite some improvement in gross margin and advertising spend, the pullback in advertising and unresolved customer experience issues weigh heavily. The Q&A section highlights ongoing concerns about digital disruption, customer experience, and lack of clear guidance on resolving these issues. The negative sentiment from analysts further impacts the outlook, leading to an overall negative prediction for the stock price.
The earnings call highlights challenges like declining revenue, negative EBITDA, and market cap compliance issues, overshadowing slight sequential revenue growth and improved gross margins. The Q&A reveals concerns about revenue per order and unclear responses on sales breakdown. Despite improved marketing returns and cost-cutting, the negative financial metrics and competitive pressures indicate a likely negative stock reaction.
The earnings call reveals significant challenges: a revenue decline, negative adjusted EBITDA, and cash flow issues due to eCommerce platform transition and reduced customer base. Despite some positive guidance and efforts to mitigate tariff impacts, the lack of a share repurchase program and unclear management responses further dampen sentiment. The overall outlook suggests a negative stock price movement in the short term.
The earnings call reveals several concerning factors: missed EPS expectations, leadership instability, and challenges with the Shopify transition. Revenue growth is projected to be flat or declining, with no share buyback program to support stock price. Despite some operational improvements, the overall sentiment is negative due to uncertainties and competitive pressures in the market.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
