Company: GROVW
Filing Date: 2025-03-19
Form Type: 10-K
Source: 0001628280-25-013839
Chunk: 143

Company: Grove Collaborative Holdings, Inc.
Filing Date: 2025-03-19
Form: 10-K
Item: Item 8
Chunk 143
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 credits issued through the Company’s referral program, costs associated with the Company’s customer service operation and costs of environmental offsets. 

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Table of ContentsGrove Collaborative Holdings, Inc.Notes to Consolidated Financial Statements (continued)

Fulfillment Costs Fulfillment costs represent those costs incurred in operating and staffing the Company’s fulfillment centers, including costs attributable to receiving, inspecting and warehousing inventories, picking, packaging and preparing customer orders for shipment (“Fulfillment Labor”), outbound shipping and handling expenses, packaging materials costs (“Shipping and Handling”) and payment processing and related transaction costs (“Payment Processing”). These costs are included within selling, general and administrative expenses in the consolidated statements of operations; therefore, the Company’s gross profit may not be comparable to other retailers or distributors. The Company’s fulfillment costs consist of the following (in thousands):Year Ended December 31,20242023Shipping and Handling$27,006 $35,609 Fulfillment Labor10,630 13,454 Payment Processing and other7,559 9,714 Total fulfillment costs$45,195 $58,777 Income Taxes The Company accounts for income taxes under the asset and liability method, whereby deferred tax assets and liabilities are determined based on the difference between the consolidated financial statement and income tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company recognizes the benefits of tax-return positions in the consolidated financial statements when they are more likely than not to be sustained by the taxing authority, based on the technical merits at the reporting date. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments, and which may not accurately forecast actual outcomes. The Company recognizes interest and penalties related to unrecognized tax benefits, if any, as income tax expense.Stock-Based Compensation The Company’s stock-based compensation relates to stock options, restricted stock units (“RSU”) and stock purchase rights under an Employee Stock Purchase Plan (“ESPP”). The Company recognizes the cost of share-based awards granted to employees and non-employees based on the estimated grant-date fair value of the awards.For stock option awards with service-only vesting conditions, expense is recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the award. The Company estimates the grant-date fair value of the stock option awards with service only vesting conditions using the Black-Scholes option-pricing model. The Black-Scholes option