# EDGAR Filing Document

**Accession Number:** 0001530979
**File Stem:** 0001530979-25-000065
**Filing Date:** 2025-8
**Character Count:** 199495
**Document Hash:** ed15f900132b358ab159003c55213c46
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001530979-25-000065.hdr.sgml**: 20250806

**ACCESSION NUMBER**: 0001530979-25-000065

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 63

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250806

**DATE AS OF CHANGE**: 20250806

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Honest Company, Inc.
- **CENTRAL INDEX KEY:** 0001530979
- **STANDARD INDUSTRIAL CLASSIFICATION:** RETAIL-CATALOG & MAIL-ORDER HOUSES [5961]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 900750205
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-40378
- **FILM NUMBER:** 251189889

**BUSINESS ADDRESS:**
- **STREET 1:** 12130 MILLENNIUM DR., #500
- **CITY:** LOS ANGELES
- **STATE:** CA
- **ZIP:** 90094
- **BUSINESS PHONE:** (310) 917-9199

**MAIL ADDRESS:**
- **STREET 1:** 12130 MILLENNIUM DR., #500
- **CITY:** LOS ANGELES
- **STATE:** CA
- **ZIP:** 90094

?xml version='1.0' encoding='ASCII'? hnst-20250630

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, DC 20549**

**FORM 10-Q**

**(Mark One)**

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended June 30, 2025**

**OR**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from**&nbsp;&nbsp;&nbsp;&nbsp;**to**

**Commission File Number: 001-40378**

![NEW Logo.jpg](hnst-20250630_g1.jpg)

**The Honest Company, Inc.**

(Exact Name of Registrant as Specified in its Charter)

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Delaware** | | **90-0750205** |
| (State or Other Jurisdiction of |  | (I.R.S. Employer |
| Incorporation or Organization) |  | Identification No.) |
| **12130 Millennium Drive, #500** |  |  |
| **Los Angeles, CA** |  | **90094** |
| (Address of Principal Executive Offices) |  | (Zip Code) |
|  | **(888) 862-8818** |  |
| (Registrant's Telephone Number, Including Area Code) | (Registrant's Telephone Number, Including Area Code) | (Registrant's Telephone Number, Including Area Code) |
|  | &nbsp;&nbsp;**N/A** |  |
| (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report) | (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report) | (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report) |
| Securities Registered Pursuant to Section 12(b) of the Act: | Securities Registered Pursuant to Section 12(b) of the Act: | Securities Registered Pursuant to Section 12(b) of the Act: |

---

---

| | | |
|:---|:---|:---|
| | &nbsp;&nbsp;**Trading** <br>**Symbol(s)** | |
|<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Title of each class** | &nbsp;&nbsp;**Trading** <br>**Symbol(s)** |<br>**Name of each exchange on which registered** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common Stock, $0.0001 par value per share | &nbsp;&nbsp;HNST | The Nasdaq Stock Market LLC |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒&nbsp;&nbsp;&nbsp;&nbsp;No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☐ | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accelerated filer | ☒ |
| Non-accelerated filer | ☐ | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Smaller reporting company | ☒ |
| Emerging growth company | ☒ | | |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).&nbsp;&nbsp;&nbsp;&nbsp;Yes ☐&nbsp;&nbsp;&nbsp;&nbsp;No ☒

As of August 1, 2025, the registrant had 111,269,491 shares of common stock, $0.0001 par value per share outstanding.

------

**The Honest Company, Inc.**

**Table of Contents** 

---

| | | |
|:---|:---|:---|
| | | **<u>Page</u>**  |
| **PART I.** | [FINANCIAL INFORMATION](#if14863722db449fa89b927e81c6ff2f8_13) | <u>[1](#if14863722db449fa89b927e81c6ff2f8_13)</u> |
| Item 1. | [Condensed Consolidated Financial Statements (Unaudited)](#if14863722db449fa89b927e81c6ff2f8_16) | <u>[1](#if14863722db449fa89b927e81c6ff2f8_16)</u> |
|  | [Condensed Consolidated Balance Sheets](#if14863722db449fa89b927e81c6ff2f8_19) | <u>[1](#if14863722db449fa89b927e81c6ff2f8_19)</u> |
|  | [Condensed Consolidated Statements of Comprehensive](#if14863722db449fa89b927e81c6ff2f8_22)[Income (](#if14863722db449fa89b927e81c6ff2f8_22)[Loss](#if14863722db449fa89b927e81c6ff2f8_22)[)](#if14863722db449fa89b927e81c6ff2f8_22) | <u>[2](#if14863722db449fa89b927e81c6ff2f8_22)</u> |
|  | [Condensed Consolidated Statements of Stockholders'](#if14863722db449fa89b927e81c6ff2f8_25)[Equity (](#if14863722db449fa89b927e81c6ff2f8_25)[Deficit](#if14863722db449fa89b927e81c6ff2f8_25)[)](#if14863722db449fa89b927e81c6ff2f8_25) | <u>[3](#if14863722db449fa89b927e81c6ff2f8_25)</u> |
|  | [Condensed Consolidated Statements of Cash Flows](#if14863722db449fa89b927e81c6ff2f8_28) | <u>[5](#if14863722db449fa89b927e81c6ff2f8_28)</u> |
|  | [Notes to Condensed Consolidated Financial Statements](#if14863722db449fa89b927e81c6ff2f8_31) | <u>[6](#if14863722db449fa89b927e81c6ff2f8_31)</u> |
| Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#if14863722db449fa89b927e81c6ff2f8_82) | <u>[15](#if14863722db449fa89b927e81c6ff2f8_82)</u> |
| Item 3. | [Quantitative and Qualitative Disclosures About Market Risk](#if14863722db449fa89b927e81c6ff2f8_88) | <u>[27](#if14863722db449fa89b927e81c6ff2f8_88)</u> |
| Item 4. | [Controls and Procedures](#if14863722db449fa89b927e81c6ff2f8_94) | <u>[27](#if14863722db449fa89b927e81c6ff2f8_94)</u> |
| **PART II.** | [OTHER INFORMATION](#if14863722db449fa89b927e81c6ff2f8_97) | <u>[28](#if14863722db449fa89b927e81c6ff2f8_100)</u> |
| Item 1. | [Legal Proceedings](#if14863722db449fa89b927e81c6ff2f8_100) | <u>[28](#if14863722db449fa89b927e81c6ff2f8_100)</u> |
| Item 1A. | [Risk Factors](#if14863722db449fa89b927e81c6ff2f8_103) | <u>[28](#if14863722db449fa89b927e81c6ff2f8_103)</u> |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#if14863722db449fa89b927e81c6ff2f8_106) | <u>[31](#if14863722db449fa89b927e81c6ff2f8_106)</u> |
| Item 3. | [Defaults Under Senior Securities](#if14863722db449fa89b927e81c6ff2f8_109) | <u>[31](#if14863722db449fa89b927e81c6ff2f8_109)</u> |
| Item 4. | [Mine Safety Disclosures](#if14863722db449fa89b927e81c6ff2f8_112) | <u>[31](#if14863722db449fa89b927e81c6ff2f8_112)</u> |
| Item 5. | [Other Information](#if14863722db449fa89b927e81c6ff2f8_115) | <u>[31](#if14863722db449fa89b927e81c6ff2f8_115)</u> |
| Item 6. | [Exhibits](#if14863722db449fa89b927e81c6ff2f8_118) | <u>[33](#if14863722db449fa89b927e81c6ff2f8_118)</u> |
|  | [Signatures](#if14863722db449fa89b927e81c6ff2f8_121) | <u>[34](#if14863722db449fa89b927e81c6ff2f8_121)</u> |

---

i. ------

**SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This Quarterly Report on Form 10-Q contains "forward-looking statements" (within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act")) about us and our industry that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements because they contain words such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will" or "would" or the negative of these words or other similar terms or expressions. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, those set forth in Part II, Item 1A, "Risk Factors," and other factors set forth in other parts of this Quarterly Report on Form 10-Q as well as in Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the "Annual Report"), filed with the Securities and Exchange Commission ("SEC") on February 26, 2025. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. These forward-looking statements include, but are not limited to, statements concerning our expectations regarding our future results of operations and financial condition, including our ability to achieve or maintain profitability; our ability to continue to launch new products; our ability to attract and retain customers; our ability to execute on and to continue driving benefits from our Transformation Pillars of Brand Maximization, Margin Enhancement, and Operating Discipline; our tariff mitigation strategy; our marketing and distribution strategies; our continued focus on research, development and innovation; our expectations regarding consumer demand and the timing and amount of orders from our largest retail customers; the effect of macroeconomic factors, including supply chain disruptions, tariffs, and inflationary pressures; anticipated trends, growth rates, and challenges in our business and in the markets in which we operate; and our ability to execute on other business strategies, including strategic shift away from lower margin channels, plans and objectives of management for future operations.

ii

------

**PART I—FINANCIAL INFORMATION**

**Item 1. Condensed Consolidated Financial Statements.**

**The Honest Company, Inc.**

**Condensed Consolidated Balance Sheets**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(Unaudited)*

*(in thousands, except share and per share amounts)*

---

| | | |
|:---|:---|:---|
| | **June 30, 2025** | **December 31, 2024** |
| **Assets** | | |
| Current assets |  |  |
| &nbsp;&nbsp;Cash and cash equivalents | $72077 | $75435 |
| &nbsp;&nbsp;Accounts receivable, net | 45146 | 43476 |
| &nbsp;&nbsp;Inventories | 95033 | 85266 |
| &nbsp;&nbsp;Prepaid expenses and other current assets | 8657 | 9741 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 220913 | 213918 |
| Operating lease right-of-use asset | 13946 | 17239 |
| Property and equipment, net | 10035 | 11394 |
| Goodwill | 2230 | 2230 |
| Intangible assets, net | 199 | 235 |
| Other assets | 1705 | 2377 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets | $249028 | $247393 |
| **Liabilities and Stockholders' Equity** |  |  |
| Current liabilities |  |  |
| &nbsp;&nbsp;Accounts payable | $21171 | $22807 |
| &nbsp;&nbsp;Accrued expenses | 31092 | 35869 |
| &nbsp;&nbsp;Deferred revenue | 995 | 1213 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 53258 | 59889 |
| Long term liabilities |  |  |
| &nbsp;&nbsp;Operating lease liabilities, net of current portion | 8742 | 13197 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 62000 | 73086 |
| Commitments and contingencies (Note 7) |  |  |
| Stockholders' equity |  |  |
| &nbsp;&nbsp;Preferred stock, $0.0001 par value, 20,000,000 shares authorized at June 30, 2025 and December 31, 2024, none issued or outstanding as of June 30, 2025 and December 31, 2024 |  |  |
| &nbsp;&nbsp;Common stock, $0.0001 par value, 1,000,000,000 shares authorized at June 30, 2025 and December 31, 2024; 111,600,237 and 109,159,697 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively | 11 | 11 |
| &nbsp;&nbsp;Additional paid-in capital | 665085 | 659488 |
| &nbsp;&nbsp;Accumulated deficit | (478068) | (485192) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 187028 | 174307 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $249028 | $247393 |

---

*The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.*

------

**The Honest Company, Inc.**

**Condensed Consolidated Statements of Comprehensive Income (Loss)**

*(Unaudited)*

*(in thousands, except share and per share amounts)*

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Revenue | $93459 | $93049 | $190709 | $179266 |
| Cost of revenue | 55707 | 57437 | 115287 | 111772 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 37752 | 35612 | 75422 | 67494 |
| Operating expenses |  |  |  |  |
| &nbsp;&nbsp;Selling, general and administrative | 20352 | 26431 | 41393 | 48850 |
| &nbsp;&nbsp;Marketing | 12552 | 11512 | 24822 | 20608 |
| &nbsp;&nbsp;Research and development | 1960 | 1714 | 3812 | 3395 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 34864 | 39657 | 70027 | 72853 |
| Operating income (loss) | 2888 | (4045) | 5395 | (5359) |
| Interest and other income (expense), net | 1026 | (19) | 1812 | (82) |
| Income (loss) before provision for income taxes | 3914 | (4064) | 7207 | (5441) |
| Income tax provision | 44 | 13 | 84 | 38 |
| Net income (loss) | $3870 | $(4077) | $7123 | $(5479) |
| Net income (loss) per share attributable to common stockholders: |  |  |  |  |
| &nbsp;&nbsp;Basic | $0.03 | $(0.04) | $0.06 | $(0.06) |
| &nbsp;&nbsp;Diluted | $0.03 | $(0.04) | $0.06 | $(0.06) |
| Weighted-average shares used in computing net income (loss) per share attributable to common stockholders: |  |  |  |  |
| &nbsp;&nbsp;Basic | 110991363 | 99078930 | 110275931 | 97676049 |
| &nbsp;&nbsp;Diluted | 114041772 | 99078930 | 114310420 | 97676049 |
| &nbsp;&nbsp;&nbsp;&nbsp;Comprehensive income (loss) | $3870 | $(4077) | $7123 | $(5479) |

---

*The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.*

------

**The Honest Company, Inc.**

**Condensed Consolidated Statements of Stockholders' Equity (Deficit)** 

*(Unaudited)*

*(in thousands, except share amounts)* 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Common Stock** | **Common Stock** | **Additional Paid-in Capital** | **Accumulated Deficit** | **Total Stockholders' Equity (Deficit)** |
| | **Shares** | **Amount** | **Additional Paid-in Capital** | **Accumulated Deficit** | **Total Stockholders' Equity (Deficit)** |
| **Balances at December 31, 2023** | 95868421 | $9 | $602198 | $(479068) | $123139 |
| &nbsp;&nbsp;Net loss |  |  |  | (1403) | (1403) |
| &nbsp;&nbsp;Stock options exercised | 126000 |  | 508 |  | 508 |
| &nbsp;&nbsp;Stock-based compensation |  |  | 2523 |  | 2523 |
| &nbsp;&nbsp;Vested restricted stock units | 1174282 |  |  |  |  |
| **Balances at March 31, 2024** | 97168703 | $9 | $605229 | $(480471) | $124767 |
| &nbsp;&nbsp;Net loss |  |  |  | (4077) | (4077) |
| &nbsp;&nbsp;Stock-based compensation |  |  | 8905 |  | 8905 |
| &nbsp;&nbsp;Vested restricted stock units | 2924878 |  |  |  |  |
| &nbsp;&nbsp;Shares issued under employee stock purchase plan | 63393 |  | 86 |  | 86 |
| **Balances at June 30, 2024** | 100156974 | $9 | $614220 | $(484548) | $129681 |

---

------

**The Honest Company, Inc.**

**Condensed Consolidated Statements of Stockholders' Equity (Deficit)** 

*(Unaudited)*

*(in thousands, except share amounts)* 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Common Stock** | **Common Stock** | **Additional Paid-in Capital** | **Accumulated Deficit** | **Total Stockholders' Equity (Deficit)** |
| | **Shares** | **Amount** | **Additional Paid-in Capital** | **Accumulated Deficit** | **Total Stockholders' Equity (Deficit)** |
| **Balances at December 31, 2024** | 109159697 | $11 | $659488 | $(485192) | $174307 |
| &nbsp;&nbsp;Net income |  |  |  | 3254 | 3254 |
| &nbsp;&nbsp;Stock options exercised | 75000 |  | 384 |  | 384 |
| &nbsp;&nbsp;Stock-based compensation |  |  | 2412 |  | 2412 |
| &nbsp;&nbsp;Vested restricted stock units | 1253999 |  |  |  |  |
| **Balances at March 31, 2025** | 110488696 | $11 | $662284 | $(481938) | $180357 |
| &nbsp;&nbsp;Net income |  |  |  | 3870 | 3870 |
| &nbsp;&nbsp;Stock-based compensation |  |  | 2716 |  | 2716 |
| &nbsp;&nbsp;Vested restricted stock units | 1093352 |  |  |  |  |
| &nbsp;&nbsp;Shares issued under employee stock purchase plan | 18189 |  | 85 |  | 85 |
| **Balances at June 30, 2025** | 111600237 | $11 | $665085 | $(478068) | $187028 |

---

*The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.*

------

**The Honest Company, Inc.**

**Condensed Consolidated Statements of Cash Flows** 

*(Unaudited)*

*(in thousands)*

---

| | | |
|:---|:---|:---|
| | **For the six months ended June 30,** | **For the six months ended June 30,** |
| | **2025** | **2024** |
| **Cash flows from operating activities** |  |  |
| Net income (loss) | $7123 | $(5479) |
| Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: |  |  |
| &nbsp;&nbsp;Depreciation and amortization | 1458 | 1426 |
| &nbsp;&nbsp;Stock-based compensation | 5128 | 11428 |
| &nbsp;&nbsp;Amortization of operating ROU assets | 3293 | 3154 |
| &nbsp;&nbsp;Other | 2200 | 2425 |
| &nbsp;&nbsp;Changes in assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | (1601) | (588) |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventories | (11386) | (766) |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 1012 | (211) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable, accrued expenses and other long-term liabilities | (6462) | (3609) |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | (218) | (529) |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities | (4230) | (3970) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) provided by operating activities | (3683) | 3281 |
| **Cash flows from investing activities** |  |  |
| &nbsp;&nbsp;Purchases of property and equipment | (143) | (91) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (143) | (91) |
| **Cash flows from financing activities** |  |  |
| &nbsp;&nbsp;Proceeds from exercise of stock options | 384 | 508 |
| &nbsp;&nbsp;Proceeds from 2021 ESPP | 85 | 86 |
| &nbsp;&nbsp;Payments on finance lease liabilities | (1) | (18) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 468 | 576 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net (decrease) increase in cash and cash equivalents | (3358) | 3766 |
| **Cash and cash equivalents** |  |  |
| Beginning of the period | 75435 | 32827 |
| End of the period | $72077 | $36593 |
| **Supplemental disclosures of noncash activities** |  |  |
| &nbsp;&nbsp;Capital expenditures included in accounts payable and accrued expenses | $120 | $155 |

---

*The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.*

------

**The Honest Company, Inc.**

**Notes to Condensed Consolidated Financial Statements**

*(in thousands, except share and per share amounts, percentages and as otherwise indicated)*

*(Unaudited)*

**1. &nbsp;&nbsp;&nbsp;&nbsp;Nature of Business**

The Honest Company, Inc. (the "Company") was incorporated in the State of California on July 19, 2011 and on May 23, 2012 was re-incorporated in the State of Delaware under the same name. The Company is a personal care company dedicated to creating cleanly-formulated and sustainably-designed products.

**2.&nbsp;&nbsp;&nbsp;&nbsp;Summary of Significant Accounting Policies** 

**Basis of Presentation**

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and applicable rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 31, 2024. The condensed consolidated financial statements are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on a basis consistent with that used to prepare the audited annual consolidated financial statements and include, in the opinion of management, all adjustments, consisting of normal recurring items, necessary for the fair statement of the condensed consolidated financial statements. The consolidated balance sheet as of December 31, 2024 has been derived from the audited financial statements at that date but does not include all of the disclosures required by GAAP. The condensed consolidated financial statements include the accounts of the Company, and its wholly owned subsidiaries after elimination of intercompany transactions and balances.

Certain reclassifications to the Company's previously reported financial information have been made to conform to the current period presentation. The Company made reclassifications to the condensed consolidated statement of cash flows, including a reclassification of $3.2 million was made from "Other" to "Amortization of operating right-of-use ("ROU") assets" in the "adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities" section of the consolidated statements of cash flow for the six months ended June 30, 2024 to conform to the current year presentation, among other immaterial reclassifications.

**Segment Reporting and Geographic Information**

The Company's principal business primarily focuses on creating cleanly-formulated and sustainably-designed products. The Company's Chief Executive Officer ("CEO"), as the chief operating decision maker ("CODM"), organizes the Company, manages resource allocations, and measures performance on the basis of one operating segment. All of the Company's long-lived assets are located in the United States and substantially all of the Company's revenue is from customers located in the United States.

The Company evaluates performance based on consolidated net income (loss). The CODM additionally considers forecasted information on a quarterly basis for net income (loss) when making decisions regarding capital and personnel needs. The CODM reviews information at the consolidated entity level, and does not distinguish the principal business, or group the operations, by geographic locations or industry types for purposes of measuring performance or allocating resources. While the Company creates products that are sold across retail channels and direct-to-consumer ("DTC"), all products are managed as one brand of products under one operating and reportable segment. Furthermore, the Company notes that monitoring financial results as one reportable segment helps the CODM manage expenses on a consolidated basis, consistent with the Company's operations.

The Company does not regularly provide the CODM with more detailed segment expense information beyond what is included in the condensed consolidated statements of comprehensive income (loss). The significant expense categories which are used to manage operations are those reflected in the Company's condensed consolidated statements of comprehensive income (loss). Refer to the condensed consolidated statements of comprehensive income (loss) included in the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information.

**Use of Estimates**

**&nbsp;&nbsp;&nbsp;&nbsp;**

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. The Company's estimates, which are subject to varying degrees of judgment, include the valuation of inventories, sales returns and allowances, allowances for credit losses, valuation of short-term investments, capitalized software, useful lives associated with long-lived assets, goodwill

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impairment, incremental borrowing rates associated with leases, valuation allowances with respect to deferred tax assets, accruals and contingencies, recoverability of non-cash marketing credits, and the valuation and assumptions underlying stock-based compensation. On an ongoing basis, the Company evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities.

The Company assessed certain accounting matters and estimates that generally require consideration of forecasted information in context with the information reasonably available to the Company as of June 30, 2025 and through the date these condensed consolidated financial statements were issued. Management is not aware of any specific event or circumstance that would require an update to estimates or judgments or a revision to the carrying value of assets or liabilities. However, these estimates and judgments may change as new events occur and additional information is obtained, which may result in changes being recognized in the Company's consolidated financial statements in future periods.

**Cash and Cash Equivalents**

Cash equivalents consist of short-term, highly liquid investments with stated maturities of three months or less from the date of purchase. Cash equivalents comprise amounts invested in money market funds.

**Accounts Receivable**

Accounts receivable are presented as net of allowance for credit losses. The Company does not accrue interest on its trade receivables. The Company evaluates accounts receivable estimated to be uncollectible by considering the lifetime expected credit losses of the Company's accounts receivable at time of inception, and records an allowance for credit losses, as necessary, with the balance of the Company's accounts receivable presented at the amortized cost. The Company considers factors in its allowance for credit losses such as historical analysis, credit quality of customers, the age of the accounts receivable balances and macroeconomic conditions that may have an impact on the Company's customers' ability to pay. The allowance for credit losses was $0.3 million and $0.4 million as of June 30, 2025 and December 31, 2024, respectively.

**Fair Value Measurements**

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses the following hierarchy in measuring the fair value of the Company's assets and liabilities, focusing on the most observable inputs when available:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than Level 1 quoted prices, such as quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active for identical or similar assets and liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Valuations are based on inputs that are unobservable and significant to the overall fair value measurement of the assets or liabilities. Inputs reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

Fair value is based on quoted market prices, if available. If listed prices or quotes are not available, fair value is based on internally developed models that primarily use market-based or independently sourced market parameters as inputs. Cash equivalents, consisting primarily of money market funds, represent highly liquid investments with maturities of three months or less at purchase. Market prices, which are Level 1 in the fair value hierarchy, are used to determine the fair value of the money market funds. Investments in debt securities are measured using broker provided indicative prices developed using observable market data, which are considered Level 2 in the fair value hierarchy. Certain assets, including long-lived assets, goodwill and intangible assets are also subject to measurement at fair value on a non-recurring basis if they are deemed to be impaired as a result of an impairment review. The fair value of such assets is measured using Level 3 inputs in the fair value hierarchy.

**Recent Accounting Pronouncements** 

As an "emerging growth company," the Jumpstart Our Business Startups Act allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use the adoption dates applicable to private companies. As a result, the Company's financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies.

*Recently Issued Accounting Pronouncements* 

In December 2023, the FASB issued ASU No. 2023-09, *Income Taxes: Improvements to Income Tax Disclosures*. This guidance requires consistent categories and greater disaggregation of information in the rate reconciliation and disclosures of income taxes paid by jurisdiction. For public business entities, the amendments in this update are effective for annual periods

------

beginning after December 15, 2024. The adoption of ASU No. 2023-09 is not expected to have a material impact on the Company's consolidated financial statements or disclosures.

In November 2024, the FASB issued ASU No. 2024-03, *Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses*. This update is to improve the disclosures of components of certain income statement expense items. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that ASU No. 2024-03 will have on its consolidated financial statements or related disclosures.

**3. Revenue** 

**Retail and Third-Party Ecommerce**

For retail and third-party ecommerce sales, the Company's performance obligation consists of the sale of finished goods to retailers and third-party ecommerce customers. Revenue is recognized when control of the promised goods is transferred to those customers at time of shipment or delivery, depending on the contract terms. After the completion of the performance obligation, the Company has the right to consideration as outlined in the contract. Payment terms vary among the retail and third-party ecommerce customers although terms generally include a requirement of payment within 30 to 45 days of product shipment.

**Direct-to-Consumer**

For direct sales to the consumer through the Company's website, Honest.com, the Company's performance obligation consists of the sale of finished goods to the consumer. Consumers may purchase products at any time or enter into subscription arrangements. Consumers place orders online in accordance with the Company's standard terms and conditions and authorize payment when the order is placed. Credit cards are charged at the time of shipment and payments are typically processed within two to three business days. For subscription arrangements, consumers sign up to receive products on a periodic basis. Subscriptions are cancellable at any time without penalty, and no amounts are collected from the consumer until products are shipped. Revenue is recognized when transfer of control to the consumer takes place, which is when the product is delivered to the carrier. Sales taxes collected from consumers are accounted for on a net basis and are excluded from revenue. Revenue generated from Honest.com was 11% and 13%, respectively, of the Company's total revenue during the three months ended June 30, 2025 and 2024, and 11% and 14%, respectively, of the Company's total revenue during the six months ended June 30, 2025 and

2024. **Non-Monetary Transactions**

The Company has in the past and may in the future enter into trade agreements with a vendor to exchange excess inventory for future marketing and transportation credits. The Company recognizes revenue reflecting the fair value of the marketing and transportation credits upon delivery of goods, with the corresponding short and long-term asset included in prepaid expenses and other current assets, and other assets in the accompanying condensed consolidated balance sheets. The Company may use the marketing and transportation credits over four years from the date of the respective agreement, with an option to extend for another two years if agreed upon by both parties. For the six months ended June 30, 2025, the Company did not enter into any new trade agreements.

For the three and six months ended June 30, 2025 and 2024, the Company did not recognize any revenue or associated cost of revenue related to these marketing and transportation credits. The Company assesses the recoverability of the marketing and transportation credits periodically. Factors considered in evaluating the recoverability include management's history of credit usage and future plans with respect to advertising, freight and other services for which these credits can be used. Any impairment losses are charged to marketing expense in the condensed consolidated statements of comprehensive income (loss) as they become determinable. For the six months ended June 30, 2025 and 2024, the Company recorded no impairment losses related to these credits and used an aggregate of $0.3 million and $1.5 million of credits, respectively.

**4. &nbsp;&nbsp;&nbsp;&nbsp;Fair Value Measurements** 

Financial assets measured and recorded at fair value on a recurring basis consist of the following as of:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
| | **Level 1** | **Level 2** | **Level 3** | **Total** |
| *(In thousands)* |  |  |  |  |
| &nbsp;&nbsp;Money market funds | $56452 | $— | $— | $56452 |
| Total cash equivalents | $56452 | $— | $— | $56452 |

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| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| | **Level 1** | **Level 2** | **Level 3** | **Total** |
| *(In thousands)* |  |  |  |  |
| &nbsp;&nbsp;Money market funds | $55280 | $— | $— | $55280 |
| Total cash equivalents | $55280 | $— | $— | $55280 |

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The carrying amounts for the Company's cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value due to their short maturities.

**5. &nbsp;&nbsp;&nbsp;&nbsp;Credit Facilities** 

In January 2023, the Company entered into a first lien credit agreement (the "2023 Credit Facility"), with JPMorgan Chase Bank, N.A., as administrative agent and lender, and the other lenders party thereto, which provides for a $35.0 million revolving credit facility that matures on April 30, 2026. The 2023 Credit Facility includes a sub-facility that provides for the issuance of letters of credit in an amount of up to $15.0 million at any time outstanding. Availability of the 2023 Credit Facility is based upon a borrowing base formula and periodic borrowing base certifications valuing certain of the Company's accounts receivable and inventory as reduced by certain reserves. The 2023 Credit Facility includes an uncommitted accordion feature that allows for increases in the revolving commitment to as much as an additional $35.0 million, for up to $70.0 million in potential revolving commitment. The 2023 Credit Facility is subject to customary fees for loan facilities of this type, including a commitment fee based on the average daily undrawn portion of the 2023 Credit Facility. The Company recognizes the commitment fee as incurred in interest and other income (expense), net in the condensed consolidated statements of comprehensive income (loss). For the three and six months ended June 30, 2025 and 2024, the commitment fee incurred was immaterial. As of June 30, 2025, there were $1.6 million of outstanding letters of credit and $31.3 million available to be drawn upon. As of June 30, 2025, there was no outstanding balance under the 2023 Credit Facility.

The interest rate applicable to the 2023 Credit Facility is, at the Company's option, either (a) the Adjusted Term SOFR rate (subject to a 0.00% floor), plus a margin ranging from 1.50% to 2.25% or (b) the CB floating rate, (i) plus a margin of 0.25% or (ii) minus a margin ranging from 0.25% to 0.50%. The margin is based upon the Company's fixed charge coverage ratio. The CB floating rate is the higher of (a) the Wall Street Journal prime rate and (b) 2.50%.

The 2023 Credit Facility will terminate and borrowings thereunder, if any, would be due in full on April 30, 2026. Debt under the 2023 Credit Facility is guaranteed by substantially all of the Company's material domestic subsidiaries and is secured by substantially all of the Company's and such subsidiaries' assets.

The 2023 Credit Facility contains covenants that restrict, among other things, the Company's ability to sell assets, make investments and acquisitions, grant liens, change the Company's lines of business, pay dividends and make certain other restricted payments. The Company is subject to certain affirmative and negative covenants including the requirement that it maintains a minimum total fixed charge coverage ratio during the periods set forth in the 2023 Credit Facility. Failure to do so, unless waived by the lenders under the 2023 Credit Facility pursuant to its terms, as amended, would result in an event of default under the 2023 Credit Facility. As of June 30, 2025, the Company is in compliance with all covenants under the 2023 Credit Facility.

**6. &nbsp;&nbsp;&nbsp;&nbsp;Accrued Expenses** 

Accrued expenses consisted of the following:

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| | | |
|:---|:---|:---|
| | **June 30, 2025** | **December 31, 2024** |
| *(In thousands)* |  |  |
| Payroll and payroll related expenses<sup>(1)</sup> | $4549 | $8410 |
| Accrued inventory purchases | 10886 | 13095 |
| Accrued returns | 48 | 102 |
| Accrued rent<sup>(2)</sup> | 8765 | 8541 |
| Other accrued expenses | 6844 | 5721 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total accrued expenses | $31092 | $35869 |

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____________________

(1) Includes $0.5 million and $0.3 million of executive transition related expenses as of June 30, 2025 and December 31, 2024, respectively.

(2) Represents short-term operating lease liabilities. Refer to Note 11, "Leases" included in these consolidated financial statements for more information on leases.

**7.&nbsp;&nbsp;&nbsp;&nbsp;Commitments and Contingencies** 

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**Litigation** 

From time to time, the Company is subject to various claims and contingencies which are in the scope of ordinary and routine litigation incidental to its business, including those related to regulation, business transactions, employee-related matters and taxes, among others. When the Company becomes aware of a claim or potential claim, the likelihood of any loss or exposure is assessed. If it is probable that a loss will result and the amount or range of the loss can be reasonably estimated, the Company records a liability for the loss and discloses the possible loss in the consolidated financial statements.

On September 23, 2020, the Center for Advanced Public Awareness ("CAPA") served a 60-Day Notice of Violation on the Company, alleging that the Company violated California's Health and Safety Code ("Prop 65") because of the amount of lead in the Company's Diaper Rash Cream and seeking statutory penalties and product warnings available under Prop 65. On October 22, 2021, CAPA filed a complaint in California Superior Court in the County of San Francisco (the "Court") for the alleged Prop 65 violations contained in its 60-Day Notice of Violation. The Company filed its answer and notice of related cases against Prestige Consumer Healthcare, Inc., Burt's Bees, Inc., and Hain Celestial Group, Inc. on January 7, 2022 and has stipulated to relate these cases and transfer them to the Court's Complex Division. On April 30, 2024, the Company filed its motion for summary judgment. On January 23, 2025, the Court granted the Company's motion for summary judgment. On April 8, 2025, CAPA served its Notice of Appeal in the matter. The Company intends to vigorously defend itself in this matter. The matter's outcome and materiality are uncertain at this time. Therefore, the Company cannot estimate the probability of loss or make an estimate of the loss or range of loss in this matter.

On September 15, 2021, Cody Dixon filed a putative class action complaint in the U.S. District Court for the Central District of California alleging federal securities law violations by the Company, certain current officers and directors, and certain underwriters in connection with the Company's initial public offering ("IPO") ("Securities Litigation Case"). A second putative class action complaint containing similar allegations against the Company and certain current officers and directors was filed by Stephen Gambino on October 8, 2021 in the U.S. District Court for the Central District of California. These related complaints have been transferred to the same court and a Lead Plaintiff has been appointed in the matter, and a putative consolidated class action complaint was filed by the Lead Plaintiff on February 21, 2022, alleging claims and seeking relief under Sections 11 and 15 of the Securities Act of 1933 relating to the Company's IPO. Defendants' motion to dismiss the putative consolidated class action complaint was filed on March 14, 2022. On July 18, 2022, the Company's motion to dismiss was granted in part and denied in part. On May 1, 2023, the Lead Plaintiff's motion for class certification in the consolidated class action was granted in part and denied in part, with the U.S. District Court for the Central District of California limiting the certified class to only those persons and entities that purchased or otherwise acquired the Company's publicly traded common stock pursuant and traceable to the Company's IPO offering documents prior to August 19, 2021, as well as all persons and entities that acquired ownership of a trading account, retirement account, or any other similar investment account or portfolio containing the Company's publicly traded common stock that was purchased or otherwise acquired pursuant and traceable to the IPO offering documents prior to August 19, 2021, and were damaged thereby. On August 14, 2023, the Lead Plaintiff filed an amended consolidated class action complaint naming as additional defendants Catterton Management Company L.L.C., L Catterton VIII, L.P., L. Catterton VIII Offshore, L.P., THC Shared Abacus, LP, Catterton Managing Partner VIII, L.L.C., and C8 Management, L.L.C. On October 16, 2023, those additional defendants filed a motion to dismiss the amended consolidated complaint with respect to the claims against them. On January 31, 2024, that motion to dismiss was granted by the court to the extent those additional defendants challenged the claims as untimely. The court granted Lead Plaintiff leave to amend within fourteen days of that order. On February 14, 2024, the Lead Plaintiff filed a second amended consolidated complaint against the additional defendants. The additional defendants filed a motion to dismiss the second amended consolidated complaint, which was denied by the court on April 22, 2024. On January 21, 2025, the parties filed a joint stipulation stating that they had reached an agreement in principle to fully settle all pending claims in the action and asking the court to stay the case so the parties could have additional time to negotiate the terms of a formal stipulation of settlement and related documentation. The court entered an order staying the case on the same day. On April 14, 2025, the court preliminarily approved the parties' settlement. Under the terms of the settlement, in exchange for the release and dismissal with prejudice of all claims against the defendants in the second amended consolidated complaint, we have agreed to pay $20,000,000 to resolve the dispute, to be fully funded by the Company's insurance carriers. The Company has recorded the settlement amount of $20,000,000 within accrued expenses and a corresponding insurance recovery of $20,000,000 within prepaids and other current assets related to the legal settlement on the consolidated balance sheet as of March 31, 2025. The determination that the recorded insurance recovery receivable is probable of collection is based on the terms of the applicable insurance policies, settlement agreement, and communications with the insurers. The proposed settlement does not constitute an admission of fault or wrongdoing by the Company, the named individual defendants, or the underwriters. On July 28, 2025, the court held a hearing on the plaintiffs' motion for final approval of the class settlement. On July 30, 2025, the court entered a final order and judgement disposing of the case.

A derivative complaint was filed by Hayato Ono on behalf of the Company on November 29, 2021 in the U.S. District Court for the Central District of California, alleging breach of fiduciary duties, unjust enrichment, waste, gross mismanagement, and federal securities law violations by the Company's directors and certain officers. On December 17, 2021, a second derivative complaint containing similar allegations against the Company's directors and certain officers was filed by Mike Wang in the U.S. District Court for the Central District of California. These two federal derivative cases have been transferred to the same judge who is presiding over the securities class action complaints. A third derivative complaint was filed by Leah Bisch and Raluca Corobana in California Superior Court for the County of Los Angeles on January 3, 2022 with similar allegations. A fourth derivative complaint was filed by David Butler in the U.S. District Court for the District of Delaware on October 19, 2022 with

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similar allegations. Each of these federal and state court derivative cases have been stayed. These matters are in the preliminary stages of litigation with uncertain outcomes at this time. Therefore, the Company cannot estimate the probability of loss or make an estimate of the loss or range of loss in these matters.

As of June 30, 2025 and December 31, 2024, the Company was not subject to any other currently pending legal matters or claims that based on its current evaluation are expected to have a material adverse effect on its financial position, results of operations, or cash flows should such matters be resolved unfavorably.

**Indemnifications** 

In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to investors, directors and officers with respect to certain matters, including, but not limited to, losses arising out of the Company's breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. These indemnifications may survive termination of the underlying agreement and the maximum potential number of future payments the Company could be required to make under these indemnification provisions may not be subject to maximum loss clauses. The maximum potential number of future payments the Company could be required to make under these indemnification provisions is indeterminable. The Company has never been involved in litigation in connection with these indemnification arrangements. As of June 30, 2025 and December 31, 2024, the Company has not accrued a liability for these guarantees as the likelihood of incurring a payment obligation, if any, in connection with these guarantees is not probable or reasonably estimable due to the unique facts and circumstances involved.

**8. &nbsp;&nbsp;&nbsp;&nbsp;Stock-Based Compensation**

**Stock Options**

The following table summarizes the stock option activity:

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| | | |
|:---|:---|:---|
| | **Number of Options** | **Weighted Average Exercise Price** |
| **Outstanding at December 31, 2024** | 4985886 | $5.41 |
| Granted |  | $— |
| Exercised | (75000) | $5.13 |
| Forfeited/Cancelled | (1351750) | $5.31 |
| **Outstanding at June 30, 2025** | 3559136 | $5.45 |

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**2021 Equity Incentive Plan** 

In April 2021, the Company's board of directors adopted the Company's 2021 Equity Incentive Plan (the "2021 Plan"), which became effective in connection with the IPO. All equity-based awards granted on or after the effectiveness of the 2021 Plan are granted under the 2021 Plan. The 2021 Plan provides for grants of incentive stock options ("ISOs") within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), to the Company's employees and its subsidiary corporations' employees, and for the grant of nonstatutory stock options ("NSOs"), stock appreciation rights, restricted stock awards, restricted stock units ("RSUs") awards, performance awards and other forms of awards to the Company's employees, directors and consultants and any of its affiliates' employees and consultants. Initially, the maximum number of shares of the Company's common stock that may be issued under its 2021 Plan will not exceed 25,025,580 shares of the Company's common stock. In addition, the number of shares of the Company's common stock reserved for issuance under its 2021 Plan will automatically increase on January 1 of each year for a period of ten years, beginning on January 1, 2022 and continuing through January 1, 2031, in an amount equal to (1) 4% of the total number of shares of the Company's common stock outstanding on December 31 of the immediately preceding year, or (2) a lesser number of shares determined by the Company's board of directors prior to the date of the increase. On January 1, 2025, 4,356,092 additional shares were reserved for issuance pursuant to this provision. The maximum number of shares of the Company's common stock that may be issued on the exercise of ISOs under its 2021 Plan is 75,100,000 shares.

**2023 Inducement Plan**

In March 2023, the Company's Compensation Committee adopted the 2023 Inducement Plan (the "2023 Inducement Plan"). The 2023 Inducement Plan reserved 4,000,000 shares of the Company's common stock for issuance under the 2023 Inducement Plan to individuals who satisfy the standards for inducement grants under the relevant Nasdaq Stock Market rules. As of June 30, 2025, there were 625,349 shares available for future grant under the 2023 Inducement Plan.

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On March 16, 2025, the Company granted 115,122 RSUs to the Senior Vice President of Supply Chain under the 2023 Inducement Plan.

The following table summarizes the RSU activity under the 2021 Equity Incentive Plan and the 2023 Inducement Plan:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Number of Shares** | **Number of Shares** | **Weighted Average Grant Date Fair Value Per Share** | **Weighted Average Grant Date Fair Value Per Share** |
| | **Non-Employee Directors** | **Directors, Officers and Employees** | **Non-Employee Directors** | **Directors, Officers and Employees** |
| **Unvested RSUs at December 31, 2024** | 726573 | 6956604 | $2.70 | $2.81 |
| Granted | 39061 | 2287532 | $6.93 | $5.10 |
| Vested | (520287) | (1827064) | $2.91 | $3.01 |
| Forfeited |  | (799396) | $— | $2.10 |
| **Unvested RSUs at June 30, 2025** | 245347 | 6617676 | $2.93 | $3.63 |

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&nbsp;&nbsp;&nbsp;&nbsp;

As of June 30, 2025, there was $22.8 million of unrecognized stock-based compensation expense related to unvested RSUs, which is expected to be recognized over a weighted-average period of 1.4 years.

**2021 Employee Stock Purchase Plan** 

In April 2021, the Company's board of directors adopted the Company's 2021 Employee Stock Purchase Plan (the "2021 ESPP"). The Company initially authorized the issuance of 1,175,000 shares of common stock under the 2021 ESPP. In addition, the number of shares available for issuance under the 2021 ESPP will be annually increased on January 1 of each year for a period of ten years, beginning on January 1, 2022 and continuing through January 1, 2031 by the lesser of (i) 1% of the total number of shares of common stock outstanding on December 31 of the immediately preceding year; and (ii) 3,525,000 shares, except before the date of any such increase, the Company's board of directors may determine that such increase will be less than the amount set forth in clauses (i) and (ii). On January 1, 2025, 1,089,023 additional shares were reserved for issuance pursuant to this provision. Subject to any limitations contained therein, the 2021 ESPP allows eligible employees to contribute (in the form of payroll deductions or otherwise to the extent permitted by the administrator) an amount established by the administrator from time to time in its discretion to purchase common stock at a discounted price per share.

Under the 2021 ESPP, eligible employees are granted the right to purchase shares of common stock at the lower of 85% of the fair value at the time of grant or 85% of the fair value at the time of exercise. The right to purchase shares of common stock is granted in May and November of each year for an offering period of approximately six months. For the three and six months ended June 30, 2025, 18,189 shares were purchased under the 2021 ESPP. As of June 30, 2025, the Company had 4,687,742 remaining authorized shares available for purchase.

The following table summarizes the key input assumptions used in the Black-Scholes option-pricing model to estimate the grant-date fair value of the 2021 ESPP:

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| | | |
|:---|:---|:---|
| | **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For the three months ended June 30, 2025** | **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For the three months ended June 30, 2025** |
| Expected life of options (in years) | 0.50 | 0.50 |
| Expected stock price volatility | 63.1% | 70.18% |
| Risk free interest rate | 4.32% | 4.32% |
| Expected dividend yield | —% | —% |
| Weighted average grant-date fair value per share | $1.81 | $1.81 |

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**Stock-Based Compensation Expense**

Stock-based compensation expense related to RSU awards under the 2021 Equity Incentive Plan and the 2023 Inducement Plan, 2021 ESPP purchases and stock options, as applicable, are as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| *(In thousands)* |  |  |  |  |
| Selling, general and administrative | $2495 | $8739 | $4736 | $11153 |
| Research and development | 221 | 166 | 392 | 275 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total stock-based compensation expense | $2716 | $8905 | $5128 | $11428 |

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**9. &nbsp;&nbsp;&nbsp;&nbsp;Net Income (Loss) per Share Attributable to Common Stockholders**

Basic net income (loss) attributable to common stockholders per share is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding. The Company computes diluted net income per share under a two-class method where income is reallocated between common stock, potential common stock and participating securities, if any. Diluted net income (loss) per share attributable to common stockholders adjusts the basic net income (loss) per share attributable to common stockholders and the weighted-average number of shares of common stock outstanding for the potentially dilutive impact of stock options using the treasury stock method.

The following table sets forth the computation of the Company's basic and diluted net income (loss) per share attributable to common stockholders:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** |
| *(In thousands, except for share and per share values)* | **2025** | **2024** | **2025** | **2024** |
| **Numerator:** |  |  |  |  |
| Net income (loss) | $3870 | $(4077) | $7123 | $(5479) |
| Net income (loss) attributable to common stockholders — basic | $3870 | $(4077) | $7123 | $(5479) |
| Net income (loss) attributable to common stockholders - diluted | $3870 | $(4077) | $7123 | $(5479) |
| **Denominator:** |  |  |  |  |
| Weighted average shares of common stock outstanding — basic | 110991363 | 99078930 | 110275931 | 97676049 |
| &nbsp;&nbsp;Add: effect of dilutive RSUs | 3050409 |  | 3888732 |  |
| &nbsp;&nbsp;Add: effect of dilutive stock options |  |  | 145757 |  |
| Weighted average shares of common stock outstanding - diluted | 114041772 | 99078930 | 114310420 | 97676049 |
| Net income (loss) per share, attributable to common shareholders: |  |  |  |  |
| &nbsp;&nbsp;Basic | $0.03 | $(0.04) | $0.06 | $(0.06) |
| &nbsp;&nbsp;Diluted | $0.03 | $(0.04) | $0.06 | $(0.06) |

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The following potentially dilutive shares were excluded from the computation of diluted net income (loss) per share because including them would have been antidilutive:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Stock options to purchase common stock | 3683015 | 13131408 | 1867008 | 13131408 |
| Unvested restricted stock units | 472924 | 8921046 | 391643 | 8921046 |
| Employee stock purchase plan | 23555 | 44245 | 22154 | 44245 |
| &nbsp;&nbsp;Total | 4179494 | 22096699 | 2280805 | 22096699 |

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**10. &nbsp;&nbsp;&nbsp;&nbsp;Income Taxes**

In determining quarterly provisions for income taxes, the Company uses the annual estimated effective tax rate applied to the actual year-to-date loss, adjusted for discrete items arising in that quarter. The Company's annual estimated effective tax rate

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differs from the U.S. federal statutory rate of 21% primarily as a result of a valuation allowance against net deferred tax assets, stock-based compensation, state taxes, nondeductible executive compensation and other permanent differences.

The Company has evaluated the available positive and negative evidence supporting the realization of its gross deferred tax assets, including cumulative losses, and the amount and timing of future taxable income, and has determined it is more likely than not that the assets will not be realized. Accordingly, the Company has recorded a full valuation allowance against the U.S. federal and state deferred tax assets as of each balance sheet date presented. However, given the Company's recent profitability, the Company believes that there is a reasonable possibility that, in the near term, sufficient positive evidence may become available that supports the release of a portion of the Company's valuation allowance, which would result in the recognition of certain U.S. deferred tax assets and a decrease to income tax expense for the period in which the release is recorded. The exact timing and amount of the valuation allowance release if any would be subject to change based on the level of profitability that the Company can achieve.

During the three and six months ended June 30, 2025 and 2024, the Company has not recorded any uncertain tax positions and has not recognized interest or penalties in the condensed consolidated statements of comprehensive income (loss).

On July 4, 2025, the 2025 budget reconciliation bill, officially known as the One Big Beautiful Bill Act of 2025 (the "Act") was enacted into law. The Act includes a broad range of tax reforms. The Company is still in the process of evaluating the impact of the Act to its consolidated financial statements and an estimate of the impact cannot be made at this time.

**11.&nbsp;&nbsp;&nbsp;&nbsp;Leases**

The Company's lease portfolio includes both real estate and non-real estate type leases, which are accounted for as either finance or operating leases. Real estate leases generally include office and warehouse facilities and non-real estate leases generally include office equipment and machinery. The Company determines if a contract is or contains a lease at inception. The Company's leases have remaining lease terms of less than three years.

The components of lease expense were as follows (in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| &nbsp;&nbsp;Finance lease expense: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization | $— | $1 | $— | $8 |
| &nbsp;&nbsp;Operating lease expense: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease expense<sup>(1)</sup> | 1792 | 1792 | 3584 | 3584 |
| &nbsp;&nbsp;Sublease income | (501) | (501) | (1003) | (1003) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total lease expense, net | $1291 | $1292 | $2581 | $2589 |

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______________________

(1) &nbsp;&nbsp;&nbsp;&nbsp;Represents the straight-line lease expense of operating leases, inclusive of amortization of ROU assets and the interest component of operating lease liabilities.

Based on the nature of the Right-Of-Use ("ROU") assets, amortization of finance leases and amortization of operating ROU assets, operating lease expense and other lease expense are recorded within either cost of revenue or selling, general and administrative expenses and interest on finance lease liabilities is recorded within interest and other expense, net in the condensed consolidated statements of comprehensive income (loss).

The following tables set forth the amount of lease assets and lease liabilities included in the Company's condensed consolidated balance sheets (in thousands):

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| | | |
|:---|:---|:---|
| **Assets** | **Financial Statement Line Item** | **June 30, 2025** |
| &nbsp;&nbsp;Operating lease assets | Operating lease right-of-use asset | $13946 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total lease assets** |  | $13946 |
| **Liabilities** | **Liabilities** |  |
| Current |  |  |
| &nbsp;&nbsp;Operating lease liabilities | Accrued expenses | 8765 |
| Non-current |  |  |
| &nbsp;&nbsp;Operating lease liabilities | Operating lease liabilities, net of current portion | 8742 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total lease liabilities** |  | $17507 |

---

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Supplemental information related to the Company's leases for the six months ended June 30, 2025 was as follows:

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| | |
|:---|:---|
| **Weighted-average remaining lease term (in years)** | |
| &nbsp;&nbsp;&nbsp;&nbsp;Finance leases |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating leases | 2.1 |
| **Weighted-average discount rate** |  |
| &nbsp;&nbsp;Finance leases | —% |
| &nbsp;&nbsp;Operating leases | 2.29% |
| **Cash paid for amounts included in the measurement of lease liabilities (in thousands)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating cash flows used in operating leases | $4230 |
| &nbsp;&nbsp;&nbsp;&nbsp;Financing cash flows used in finance leases | $1 |

---

The Company did not have any non-cash ROU assets obtained in exchange for lease liabilities during the six months ended June 30, 2025 for either finance or operating leases.

**12. &nbsp;&nbsp;&nbsp;&nbsp;Subsequent Events**

On July 28, 2025, the court held a hearing on the plaintiffs' motion for final approval of the class settlement for the Securities Litigation Case. On July 30, 2025, the court entered a final order and judgement disposing of the Securities Litigation Case. Refer to Note 7, "Commitments and Contingencies" included in these consolidated financial statements for more information regarding the Securities Litigation Case settlement.

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.** 

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes as disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the "Annual Report"), filed with the Securities and Exchange Commission ("SEC") on February 26, 2025. This discussion, particularly information with respect to our future results of operations or financial condition, business strategy and plans, and objectives of management for future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading "Special Note Regarding Forward-Looking Statements" in this Quarterly Report on Form 10-Q. You should review the disclosure under the heading "Risk Factors" in this Quarterly Report on Form 10-Q as well as in the Annual Report for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements. Unless the context otherwise requires, all references in this Quarterly Report on Form 10-Q to "we," "us," "our," "our company," "the Company" and "Honest" refer to The Honest Company, Inc. and its consolidated subsidiaries.

**Overview** 

The Honest Company, Inc. ("Honest" and, together with its consolidated subsidiaries, the "Company," "we," "us" and "our") is a personal care company dedicated to creating cleanly-formulated and sustainably-designed products spanning categories across diapers, wipes, baby personal care, beauty, apparel, household care and wellness. Launched in 2012, the Company is on a mission to challenge ingredients, ideals, and industries through the power of the Honest brand, the Honest team, and the Honest Standard. Our commitment to our core values, continual innovation and engaging our community has differentiated and elevated our brand and our products. We have cultivated deep trust around what matters most to our consumers: their health, their families and their homes. We seek to meet consumers wherever they want to shop, balancing deep consumer connection with broad convenience and availability. Our distribution strategy positions us for continued growth through our trusted brand and award-winning multi-category product offerings.

Our integrated multi-category product portfolio is intentionally designed to serve our consumers every day, at every age and through every life stage. We believe this drives loyalty, increases our consumer wallet share and generates attractive consumer lifetime value.

We believe that our consumers are modern, aspirational and style-forward and that they seek out high quality, effective and thoughtfully-designed products. We believe that they are very choiceful about the products that they purchase and use. And, we believe they are enthusiastic ambassadors for brands they trust. As purpose-driven consumers, they transcend any one demographic, spanning gender, age, geography, ethnicity and household income. Honest consumers are often young, mobile-centric and digitally-inclined. We build relationships with these consumers through a disruptive digital marketing strategy that

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engages them with digital content. Our direct connection with our community enables us to understand what consumers' needs are and inspires our product innovation pipeline, generating a significant competitive advantage over more traditional consumer packaged goods ("CPG") peers.

Our omnichannel presence seeks to meet consumers wherever they want to shop, balancing deep consumer connection with broad convenience and availability. Since our launch, we have built a well-integrated omnichannel presence by expanding our product availability, including the launch of strategic partnerships with Target, Amazon and Walmart in 2014, 2017 and 2022, respectively. We expect beyond 2025, we will transition away from Honest.com as a shipping and fulfillment channel, while maintaining Honest.com as a resource for educating consumers, showcasing our complete product portfolio, and driving consumers to purchase through our leading retailers and their websites, and third-party ecommerce sites. Our integrated omnichannel presence provides meaningful benefits to our consumers which we believe are not easily replicated by our competitors.

**Transformation Initiative** 

In 2023, we executed a broad-based Transformation Initiative designed to build the Honest brand and drive growth in higher-margin areas of the portfolio, strengthen our cost structure, drive focus on the most productive areas of our business, deliver greater impact from brand-building investments, and improve executional excellence across the enterprise. The restructuring element of the Transformation Initiative was substantially completed by December 31, 2023.

The Company expects to continue driving benefits from its three Transformation Pillars of Brand Maximization, Margin Enhancement, and Operating Discipline:

1) Brand Maximization

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Leveraging the strength of the Honest brand to drive growth through greater availability, expanded household penetration, product innovation, margin-accretive products, and marketing effectiveness.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pricing strategy as a driver of revenue is also a component of Brand Maximization. This includes the ongoing benefit of pricing increases across the majority of our product portfolio in 2022 and 2023.

2) Margin Enhancement

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Focusing our resources on North America, which included the exit of our low-margin business in Europe and Asia.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Exiting low-margin elements of the cleaning and sanitization business in 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Executing an inventory, or stock-keeping unit ("SKU"), rationalization program in 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Re-directing resources to accelerate cost savings, including optimization of our contract manufacturing strategies, reduced shipping and logistic costs, and product costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Realigning resources to reflect the prioritization of higher-margin opportunities, including strategic shift away from our lower margin channels, including our direct-to-consumer ("DTC") business.

3) Operating Discipline

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Focusing on improving our executional excellence in how we operate as an enterprise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Building a culture that emphasizes returns across growth drivers, including marketing, trade promotion, and innovation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Managing working capital including the reduction of inventory.

**Key Factors Affecting Our Performance**

We believe that the growth of our business and our future success are dependent on many factors. While each of these factors presents significant opportunities for us, they also pose important challenges that we must successfully address to enable us to sustain the growth of our business and improve our operations while staying true to our mission, including those discussed below and in the section titled "Risk Factors" in this Quarterly Report on Form 10-Q and in our Annual Report.

***Operational and Marketing Efficiency***

To grow our business, we intend to continue to improve our operational and marketing efficiency, which includes attracting new consumers, increasing community engagement and improving fulfillment and distribution operations. Our marketing model is inclusive of a best-in-class modern approach across paid, owned, and earned marketing channels. We invest significant resources in marketing and content generation, use a variety of brand and performance marketing channels and work continuously to improve brand exposure at our retail customers to acquire new consumers. It is important to maintain reasonable costs for these marketing efforts relative to the revenue we expect to derive from our consumers. We leverage proprietary consumer insights and best-in-class analytics to guide our omnichannel strategy and inform our marketing spend optimization. Our future success depends in part on our ability to effectively attract consumers on a cost-efficient basis and achieve efficiencies

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in our operations. In addition, we believe we have been able to achieve some operational and marketing efficiency as part of cost savings in connection with our Brand Maximization Transformation Pillar.

***Ability to Execute Increasing Physical Availability***

The core of our growth strategy centers around increasing physical availability of our products through expanded stores, doors, aisles, shelves and facings. While we have made significant progress in our distribution gains, we are still under indexed compared to competition. Our partnerships with leading third-party retail platforms and national retailers have broadened our consumer reach, raised our brand awareness and enhanced our margins through operating leverage. With the higher costs of shipping and fulfillment activities related to our DTC business and other related costs, we will continue to shift our focus and investments towards more efficient and scalable distribution models with our current retail and digital customers. As we move forward beyond 2025, we will transition away from Honest.com as a shipping and fulfillment channel, while ensuring the site remains a resource for educating consumers, showcasing our complete product portfolio, and driving consumers to purchase offsite. We expect that our transition from Honest.com as a shipping and fulfillment channel will negatively impact revenue in 2026 and will enable improved gross margin in future years. We will continue to pursue partnerships with a wide variety of retailers, including mass retailers, online retailers, club retailers, grocery stores, drugstores and specialty retailers. Our ability to execute this strategy will depend on a number of factors, such as competitive dynamics and retailers' satisfaction with the sales and profitability of our products, channel shifts of their customers, and their own supply chain, order timing, and inventory needs, which may fluctuate from period to period. For example, we experienced distribution losses with two of our largest retail customers on certain diaper SKUs mainly related to these retailers' footprint changes for certain product categories overall and a shift to more exclusive non-gendered prints with one of these retailers, which has impacted our revenue in 2025 and we expect will negatively impact our diaper revenue in the future.

Our product mix is a driver of our financial performance given our focus on accretive product launches and innovation to increase product margins. Even though our growth strategy aims to boost sales across products by increasing total distribution, we intend to prioritize growth in products with attractive margin characteristics, including wipes, and leverage our brand equity and consumer insights to extend into new products.

***Ability to Grow Our Brand Awareness***

Our brand is integral to the growth of our business and is essential to our ability to engage and stay connected with the growing clean products consumer market. In order to increase the share of wallet of our existing consumers and to attract new consumers, our brand has to maintain its trustworthiness and authenticity. Our ability to attract new consumers will depend on, among other things, the efficacy of our marketing efforts, our ability to successfully produce products that are free of defects, our ability to communicate the value of those products as cleanly-formulated, sustainably-designed and effective, and the offerings of our competitors. Beyond preserving the integrity of our brand, our performance will depend on our ability to augment our reach and increase the number of consumers aware of Honest and our product portfolio. We believe our brand strength will enable us to continue to launch new products, allowing us to deepen relationships with consumers. Our performance depends significantly on factors that may affect the level and pattern of consumer spending in the product categories in which we operate.

***Continued Innovation***

Research, development and innovation are core elements underpinning our growth strategy. Through our in-house research and development laboratories, we are able to access the latest advancements in clean ingredients. Based in Los Angeles, California, our research and development team, including experts in chemistry and toxicology, develop innovative cleanly-formulated products. At Honest, product innovation is top of mind. The improvement of existing products and the introduction of new products have been, and continue to be, integral to our growth. We have made significant investments in our product development capabilities and plan to continue to do so in the future. We believe our rigorous approach to product innovation has helped redefine and grow the clean and natural product categories in which we operate. Our continued focus on research and development will be central to attracting and retaining consumers in the future. Our ability to successfully develop, market and sell new products will depend on a variety of factors, including our continued investment in innovation. We are also committed to bringing our Honest Standard to new products where we believe there is a need for a higher standard for clean personal care.

***Overall Macro Trends***

We believe consumers' increasing interest in cleanly-designed products and purpose-driven companies has contributed to higher demand for certain products, which we believe we are strategically positioned to benefit from. At the same time, changes in macro-level trends, including as a result of global pandemics, changing consumer attitudes or behavior or other macroeconomic conditions, such as inflation, tariffs or supply chain disruptions, have resulted and could in the future result in fluctuations in our operating results.

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*Business Operations*

Global economic and political uncertainty have increased due to the impact of continued inflationary pressures, adverse impact on confidence in financial markets and geopolitical events, including recently imposed tariffs on certain foreign goods and the possibility of expanding the tariffs to capture other types of goods. Additionally, the extent of the impact of macroeconomic trends on the Company's operational and financial performance in the future will depend on future developments. Prolonged unfavorable economic conditions, including as a result of changing consumer attitudes or behaviors or other macroeconomic conditions, such as rising inflation and interest rates, tariffs, supply chain disruptions, trade disputes, foreign exchange volatility, financial market instability and any resulting recession or slowed economic growth, have had and may continue to have an adverse effect on our sales and profitability. All of these factors are difficult to predict considering the rapidly evolving landscape as the Company continues to expect a variable operating environment going forward.

*Supply Chain Disruptions*

There has been and continues to be an adverse impact on global economic conditions, specifically inflationary pressures, which has adversely affected our supply chain in regards to cost of revenue. We have experienced and anticipate continued increases in product costs and labor costs due to inflationary pressures, which has in the past and could continue to hamper our ability to drive margin expansion. In addition, past and current tariffs have increased, and may continue to increase, the cost of raw materials, components and finished goods, which has adversely impacted our operational expenses, and may negatively impact our ability to source our finished goods and components. We have taken measures to bolster key aspects of our supply chain and mitigate the impact of tariffs, such as creating an agile supply chain, ensuring sufficient inventory to support our continued growth, minimizing lead times for raw materials, and implementing a robust cost-savings program, as part of our tariff mitigation strategy. If we are not successful in our attempts to bolster our supply chain and mitigate the impact of tariffs, our product and fulfillment costs may increase and our business, financial condition, results of operations and prospects could be adversely affected. Additionally, we have experienced purchase price increases from our third-party manufacturers in the past and could face escalation of purchase costs and cost of revenue in the future. In 2025, we have agreed to increased purchase costs from our diaper manufacturer and received requests to renegotiate purchase costs from other third-party manufacturers. As a result, we expect those increased purchase costs to negatively impact our cost of revenue in 2025.

We implemented price increases that took effect in 2022 and 2023 and we may implement additional price increases in the future as needed to offset current and future input cost inflation and to pursue productivity initiatives to offset inflation. However, we may not be able to increase our prices or productivity sufficiently enough to offset these costs. Customer demand for our products may change based on price increases.

*Consumer Preferences*

We believe in the power of our omnichannel distribution model. We believe consumers value the flexibility in terms of where and when they choose to purchase Honest products. We also believe that consumers research their personal care ingredients and recognize the quality of Honest products, knowing that there are over 3,500 chemicals and materials that we choose not to formulate with.

**Inventory**

Inventory is reflected at net realizable value which includes a reserve for excess inventory. We estimate reserve requirements based on current and forecasted demand, including the ability to liquidate excess inventory and estimated liquidation value. Depending on future consumer behavior in relation to the macroeconomic environment or otherwise and related aging of inventory, among other factors, we have in the past and expect to incur in the future additional inventory write-downs, customer returns or incur donation expense or disposal costs as we reduce excess inventory. As part of our efforts to mitigate the impact of tariffs, we increased our inventory on hand during the first half of 2025 to potentially delay the impact of incremental tariffs during 2025.

In connection with the termination of the Likeness Agreement with Jessica Alba, as part of Ms. Alba's departure from her Chief Creative Officer position, after April 4, 2025 we are prohibited from selling existing inventory that uses certain specified licensed intellectual property on its packaging, which resulted in inventory write-offs in the past.

**Supplier Services Agreement**

In August 2022, we entered into a supplier services agreement with Butterblu, LLC ("Butterblu") pursuant to which Butterblu provides certain design, manufacturing, sales and marketing services to us. As part of the supplier services agreement, we have agreed to purchase and own inventory for the term of the supplier service agreement, which is until December 31, 2026, unless terminated sooner. We continue to discuss with Butterblu our respective obligations under the supplier services agreement. Butterblu continues to operate and maintain our baby apparel offerings independently through the honestbabyclothing.com website under our supplier services agreement and its sales are reflected as revenue in our condensed consolidated statements of comprehensive income (loss). These discussions could result in termination of the supplier services agreement prior to its

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termination date, potential disputes over the terms of termination, and costs to us related to the inventory we agreed to purchase and own for the term of the agreement. In addition, any loss of the relationship with Butterblu may negatively impact sales of our baby apparel, which will adversely affect our results of operations.

**Components of Results of Operations** 

***Revenue***

We generate revenue through the sale of our products through our leading retailers and their websites, third-party ecommerce sites and Honest.com. Our revenue is recognized net of allowances for returns, discounts, credits and any taxes collected from consumers.

***Cost of Revenue***

Cost of revenue includes the purchase price of merchandise sold to customers, inbound and outbound shipping and handling costs, freight and duties, shipping and packaging supplies, credit card processing fees and warehouse fulfillment costs incurred in operating and staffing warehouses, including rent. Cost of revenue also includes depreciation and amortization for warehouse fulfillment facilities and equipment, allocated overhead and direct and indirect labor for warehouse personnel, inventory reserves and destruction costs.

***Gross Profit and Gross Margin***

Gross profit represents revenue less cost of revenue. Gross margin is gross profit expressed as a percentage of revenue. Our gross margin may in the future fluctuate from period to period based on a number of factors, including commodity costs, manufacturing costs, warehousing and transportation rates, the promotional environment in the marketplace, the mix of products we sell, the channel through which we sell our products, and innovation initiatives we undertake in each product category, among other factors.

***Operating Expenses***

Our operating expenses consist of selling, general and administrative, marketing and research and development expenses.

***Selling, General and Administrative***

Selling, general and administrative expenses consist primarily of personnel costs, principally for our selling and administrative functions. These include personnel-related expenses, including salaries, bonuses, benefits and stock-based compensation expenses. Selling, general and administrative expenses also include technology expenses; professional fees, including audit and legal expenses; donation expenses including overhead and tariffs; facility costs, including insurance, utilities and rent relating to our headquarters; third-party service fees related to our supplier services agreement for Honest baby clothing, our baby apparel business; and, depreciation and amortization expenses. We expect our general and administrative expenses to decrease as a percentage of revenue as we continue to grow our business and organizational capabilities and efficiencies. We have incurred and expect in the future to continue to incur additional third-party professional fees related to compliance obligations as a public company.

***Marketing***

Marketing expenses include costs related to our branding initiatives, retail customer marketing activities, point of purchase displays, targeted online advertising through sponsored search, display advertising, email and influencer marketing campaigns, market research, content production, consumer insights research, and other public relations and promotional initiatives. Given higher costs in digital marketing and increased retail distribution, we have shifted the focus of our marketing spend towards supporting retail marketing programs and top of funnel marketing activities. We will continue to invest in marketing initiatives in our best-selling products with key retailers, as well as expand brand awareness, introduce new product innovation across multiple product categories and implement new marketing strategies. As we launch new products, we expect to make marketing investments to build brand awareness, drive trial and set the foundation for future revenue growth.

***Research and Development***

Research and development expenses consist primarily of personnel-related expenses for our research and development team. Research and development expenses also include costs incurred for the development of new products, improvement in the quality of existing products and the development and implementation of new technologies to enhance the quality and value of products. This includes the expense related to claims and clinical trials as well as formulation and packaging testing. Research and development expenses also include allocated depreciation and amortization and overhead costs. We expect research and

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development expenses to increase in absolute dollars as we invest in the enhancement of our product offerings through innovation and the introduction of new adjacent product categories.

***Interest and Other Income (Expense), Net***

Interest income consists primarily of interest income earned on our short-term investments and our cash and cash equivalents balances. Interest expense includes fees incurred under our 2023 Credit Facility, including commitment fees and debt issuance costs.

Other income (expense), net consists of our foreign currency exchange gains, losses relating to transactions denominated in currencies other than the U.S. dollar and contingent gains. We expect our foreign currency gains and losses to be immaterial in future periods but continue to fluctuate due to changes in both the volume of foreign currency transactions and foreign currency exchange rates.

***Income Tax Provision***

We are subject to federal and state income taxes in the United States. Our annual estimated tax rate differed from the U.S. federal statutory rate of 21% primarily as a result of a valuation allowance against deferred tax assets, stock-based compensation, state taxes, nondeductible executive compensation and other permanent differences. We maintain a full valuation allowance for our federal and state deferred tax assets, including net operating loss carryforwards, as we have concluded that it is not more likely than not that the deferred tax assets will be realized.

**Results of Operations** 

The following table sets forth our condensed consolidated statements of comprehensive income (loss) data for each of the periods indicated:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| *(In thousands)* |  |  |  |  |
| Revenue | $93459 | $93049 | $190709 | $179266 |
| Cost of revenue | 55707 | 57437 | 115287 | 111772 |
| Gross profit | 37752 | 35612 | 75422 | 67494 |
| Operating expenses |  |  |  |  |
| Selling, general and administrative<sup>(1)</sup> | 20352 | 26431 | 41393 | 48850 |
| Marketing | 12552 | 11512 | 24822 | 20608 |
| Research and development<sup>(1)</sup> | 1960 | 1714 | 3812 | 3395 |
| Total operating expenses | 34864 | 39657 | 70027 | 72853 |
| Operating income (loss) | 2888 | (4045) | 5395 | (5359) |
| Interest and other income (expense), net | 1026 | (19) | 1812 | (82) |
| Income (loss) before provision for income taxes | 3914 | (4064) | 7207 | (5441) |
| Income tax provision | 44 | 13 | 84 | 38 |
| Net income (loss) | $3870 | $(4077) | $7123 | $(5479) |

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<sup>__________________________</sup>

<sup>(1)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Includes stock-based compensation expense as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| *(In thousands)* |  |  |  |  |
| Selling, general and administrative | $2495 | $8739 | $4736 | $11153 |
| Research and development | 221 | 166 | 392 | 275 |
| Total | $2716 | $8905 | $5128 | $11428 |

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The following table sets forth our condensed consolidated statements of comprehensive income (loss) data expressed as a percentage of revenue\*:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the three months ended June 30,** | | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** |
| | **2025** | | **2024** | | **2025** | | **2024** |
| | **(as a percentage of revenue)** | **(as a percentage of revenue)** | **(as a percentage of revenue)** | **(as a percentage of revenue)** | **(as a percentage of revenue)** | **(as a percentage of revenue)** | **(as a percentage of revenue)** |
| Revenue | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 |
| Cost of revenue | 59.6 |  | 61.7 |  | 60.5 |  | 62.3 |
| Gross profit | 40.4 |  | 38.3 |  | 39.5 |  | 37.7 |
| Operating expenses |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Selling, general and administrative | 21.8 |  | 28.4 |  | 21.7 |  | 27.3 |
| &nbsp;&nbsp;Marketing | 13.4 |  | 12.4 |  | 13.0 |  | 11.5 |
| &nbsp;&nbsp;Research and development | 2.1 |  | 1.8 |  | 2.0 |  | 1.9 |
| Total operating expenses | 37.3 |  | 42.6 |  | 36.7 |  | 40.6 |
| Operating income (loss) | 3.1 |  | (4.3) |  | 2.8 |  | (3.0) |
| &nbsp;&nbsp;Interest and other income (expense), net | 1.1 |  |  |  | 1.0 |  |  |
| Income (loss) before provision for income taxes | 4.2 |  | (4.4) |  | 3.8 |  | (3.0) |
| &nbsp;&nbsp;Income tax provision |  |  |  |  |  |  |  |
| Net income (loss) | 4.1 | % | (4.4) | % | 3.7 | % | (3.1) |

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<sup>\*</sup> <sup>Amounts</sup> <sup>may</sup> <sup>not sum</sup> <sup>due to rounding.</sup>

**Comparison of the Three and Six Months Ended June 30, 2025 and 2024**

***Revenue***

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** |
| | **2025** | **2024** | **$ change** | **% change** | **2025** | **2024** | **$ change** | **% change** |
| *(In thousands, except percentages)* | *(In thousands, except percentages)* |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue | $93459 | $93049 | $410 | 0.4 | $190709 | $179266 | $11443 | 6.4 |

---

Revenue was $93.5 million for the three months ended June 30, 2025, as compared to $93.0 million for the three months ended June 30, 2024. The increase of $0.4 million, or 0.4%, was primarily due to an increase in retail revenue (including an $8.4 million increase in wipes revenue, partially offset by a decrease in diaper revenue and adult facial care revenue (including skin care and cosmetics) of $3.3 million and $2.5 million, respectively), offset by a decline in Honest.com revenue.

Revenue was $190.7 million for the six months ended June 30, 2025, as compared to $179.3 million for the six months ended June 30, 2024. The increase of $11.4 million, or 6.4%, was primarily due to an increase in retail revenue (including an $18.1 million increase in wipes revenue, partially offset by a decrease in diaper revenue and adult facial care revenue (including skin care and cosmetics) of $1.7 million and $3.2 million, respectively), offset by a decline in Honest.com revenue.

***Cost of Revenue and Gross Profit***

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** |
| | **2025** | **2024** | **$ change** | **% change** | **2025** | **2024** | **$ change** | **% change** |
| *(In thousands, except percentages)* | *(In thousands, except percentages)* | *(In thousands, except percentages)* |  |  |  |  |  |  |
| Cost of revenue | $55707 | $57437 | $(1730) | (3.0) | $115287 | $111772 | $3515 | 3.1 |
| Gross profit | $37752 | $35612 | $2140 | 6.0 | $75422 | $67494 | $7928 | 11.7 |

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Cost of revenue was $55.7 million for the three months ended June 30, 2025, as compared to $57.4 million for the three months ended June 30, 2024. The decrease of $1.7 million, or 3.0%, was primarily driven by a change in inventory reserves, partially offset by tariff costs. Cost of revenue as a percentage of revenue decreased by 212 basis points compared to the three months ended June 30, 2024.

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Cost of revenue was $115.3 million for the six months ended June 30, 2025, as compared to $111.8 million for the six months ended June 30, 2024. The increase of $3.5 million, or 3.1%, was primarily driven by sales volume growth and tariff costs, partially offset by a change in inventory reserves. Cost of revenue as a percentage of revenue decreased by 190 basis points compared to the six months ended June 30, 2024.

Gross profit was $37.8 million for the three months ended June 30, 2025, as compared to $35.6 million for the three months ended June 30, 2024. The increase of $2.1 million, or 6.0%, was primarily related to a change in inventory reserves, partially offset by an increase in tariff costs.

Gross profit was $75.4 million for the six months ended June 30, 2025, as compared to $67.5 million for the six months ended June 30, 2024. The increase of $7.9 million, or 11.7%, was primarily related to sales volume growth, supply chain cost savings and change in inventory reserves, partially offset by an increase in tariff costs.

***Operating Expenses***

***Selling, General and Administrative Expenses***

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** |
| | **2025** | **2024** | **$ change** | **% change** | **2025** | **2024** | **$ change** | **% change** |
| *(In thousands, except percentages)* | *(In thousands, except percentages)* | *(In thousands, except percentages)* |  |  |  |  |  |  |
| Selling, general and administrative | $20352 | $26431 | $(6079) | (23.0) | $41393 | $48850 | $(7457) | (15.3) |

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Selling, general and administrative expenses were $20.4 million for the three months ended June 30, 2025, as compared to $26.4 million for the three months ended June 30, 2024. The decrease of $6.1 million, or 23.0%, was primarily due to a $6.2 million decrease in stock-based compensation expense due to the acceleration of restricted stock units ("RSUs") held by our founder and former Chief Creative Officer in the three months ended June 30, 2024 and a $1.2 million decrease in legal expenses, partially offset by a increase in donation expense. Selling, general and administrative expenses as a percentage of revenue decreased 6.6% as compared to the three months ended June 30, 2024.

Selling, general and administrative expenses were $41.4 million for the six months ended June 30, 2025, as compared to $48.9 million for the six months ended June 30, 2024. The decrease of $7.5 million, or 15.3%, was primarily due to a $6.4 million decrease in stock-based compensation expense due to the acceleration of RSUs held by our founder and former Chief Creative Officer in the six months ended June 30, 2024 and a $1.5 million decrease in legal expenses, partially offset by a $0.9 million increase in general administrative expenses. Selling, general and administrative expenses as a percentage of revenue decreased 5.5% as compared to the six months ended June 30, 2024.

***Marketing Expenses***

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** |
| | **2025** | **2024** | **$ change** | **% change** | **2025** | **2024** | **$ change** | **% change** |
| *(In thousands, except percentages)* | *(In thousands, except percentages)* | *(In thousands, except percentages)* |  |  |  |  |  |  |
| Marketing | $12552 | $11512 | $1040 | 9.0 | $24822 | $20608 | $4214 | 20.4 |

---

Marketing expenses were $12.6 million for the three months ended June 30, 2025, as compared to $11.5 million for the three months ended June 30, 2024. The increase of $1.0 million, or 9.0%, was primarily due to a $1.6 million increase in retail marketing, partially offset by a decrease of $0.6 million in direct brand advertising. Marketing expenses as a percentage of revenue increased 1.1% as compared to the three months ended June 30, 2024.

Marketing expenses were $24.8 million for the six months ended June 30, 2025, as compared to $20.6 million for the six months ended June 30, 2024. The increase of $4.2 million, or 20.4%, was primarily due to a $3.1 million increase in retail marketing and a $1.0 million increase in direct brand advertising. Marketing expenses as a percentage of revenue increased 1.5% as compared to the six months ended June 30, 2024.

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***Research and Development Expenses***

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** |
| | **2025** | **2024** | **$ change** | **% change** | **2025** | **2024** | **$ change** | **% change** |
| *(In thousands, except percentages)* | *(In thousands, except percentages)* | *(In thousands, except percentages)* |  |  |  |  |  |  |
| Research and development | $1960 | $1714 | $246 | 14.4 | $3812 | $3395 | $417 | 12.3 |

---

Research and development expenses were $2.0 million for the three months ended June 30, 2025, as compared to $1.7 million for the three months ended June 30, 2024. Research and development expenses as a percentage of revenue increased 26 basis points as compared to the three months ended June 30, 2024.

Research and development expenses were $3.8 million for the six months ended June 30, 2025, as compared to $3.4 million for the six months ended June 30, 2024. Research and development expenses as a percentage of revenue increased 11 basis points as compared to the six months ended June 30, 2024.

***Interest and Other Income (Expense), Net***

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** |
| | **2025** | **2024** | **$ change** | **2025** | **2024** | **$ change** |
| *(In thousands, except percentages)* | *(In thousands, except percentages)* | *(In thousands, except percentages)* |  |  |  |  |
| Interest income (expense), net | $593 | $6 | $587 | $1208 | $(19) | $1227 |
| Other income (expense), net | 433 | (25) | 458 | 604 | (63) | 667 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest and other income (expense), net | $1026 | $(19) | $1045 | $1812 | $(82) | $1894 |

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Interest and other income (expense), net was net income of $1.0 million for the three months ended June 30, 2025, as compared to net expense of $19.0 thousand for the three months ended June 30, 2024. The increase of $1.0 million primarily relates to interest income earned on our money market account.

Interest and other income (expense), net was net income of $1.8 million for the six months ended June 30, 2025, as compared to net expense of $82.0 thousand for the six months ended June 30, 2024. The increase of $1.9 million primarily relates to interest income earned on our money market account.

**Liquidity and Capital Resources** 

As of June 30, 2025, we had $72.1 million of cash and cash equivalents. Although we are dependent on our ability to generate sufficient cash flow from operations or raise capital to achieve our business objectives, we believe our existing cash and cash equivalents together with cash generated from operations will be sufficient to meet our short-term projected operations for the next 12 months from the date of issuance of our condensed consolidated financial statements. We will need to generate sufficient cash from operations or may need to raise additional capital to meet our long-term working capital and capital expenditure needs in the future. We also have availability under our 2023 Credit Facility, which was not drawn as of June 30, 2025.

***2023 Credit Facility***

In January 2023, we entered into a first lien credit agreement (the "2023 Credit Facility"), with JPMorgan Chase Bank, N.A., as administrative agent and lender, and the other lenders party thereto, which provides for a $35.0 million revolving credit facility that matures on April 30, 2026. The 2023 Credit Facility includes a sub-facility that provides for the issuance of letters of credit in an amount of up to $15.0 million at any time outstanding. Availability of the 2023 Credit Facility is based upon a borrowing base formula and periodic borrowing base certifications valuing certain of our accounts receivable and inventory as reduced by certain reserves. The 2023 Credit Facility includes an uncommitted accordion feature that allows for increases in the revolving commitment to as much as an additional $35.0 million, for up to $70.0 million in potential revolving commitment. The 2023 Credit Facility is subject to customary fees for loan facilities of this type, including a commitment fee based on the average daily undrawn portion of the 2023 Credit Facility. We recognize the commitment fee as incurred in interest and other income (expense), net in the condensed consolidated statements of comprehensive income (loss). For the three and six months ended June 30, 2025, the commitment fee incurred was immaterial. As of June 30, 2025, there were $1.6 million of outstanding letters of

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credit and $31.3 million available to be drawn upon. As of June 30, 2025, there was no outstanding balance under the 2023 Credit Facility.

The interest rate applicable to the 2023 Credit Facility is, at our option, either (a) the Adjusted Term SOFR rate (subject to a 0.00% floor), plus a margin ranging from 1.50% to 2.25% or (b) the CB floating rate, (i) plus a margin of 0.25% or (ii) minus a margin ranging from 0.25% to 0.50%. The margin is based upon our fixed charge coverage ratio. The CB floating rate is the higher of (a) the Wall Street Journal prime rate and (b) 2.50%.

The 2023 Credit Facility will terminate and borrowings thereunder, if any, would be due in full on April 30, 2026. Debt under the 2023 Credit Facility is guaranteed by substantially all of our material domestic subsidiaries and is secured by substantially all of our and such subsidiaries' assets.

The 2023 Credit Facility contains covenants that restrict, among other things, our ability to sell assets, make investments and acquisitions, grant liens, change our lines of business, pay dividends and make certain other restricted payments. We are subject to certain affirmative and negative covenants including the requirement that we maintain a minimum total fixed charge coverage ratio during the periods set forth in the 2023 Credit Facility. Failure to do so, unless waived by the lenders under the 2023 Credit Facility pursuant to its terms, as amended, would result in an event of default under the 2023 Credit Facility. As of June 30, 2025, we are in compliance with all covenants under the 2023 Credit Facility.

Refer to Note 5 "Credit Facilities" included in the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information on the 2023 Credit Facility.

***Cash Flows***

The following table summarizes our cash flows for the periods presented:

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| | | |
|:---|:---|:---|
| | **For the six months ended June 30,** | **For the six months ended June 30,** |
| *(In thousands)* | **2025** | **2024** |
| Net cash (used in) provided by operating activities | $(3683) | $3281 |
| Net cash used in investing activities | $(143) | $(91) |
| Net cash provided by financing activities | $468 | $576 |

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***Operating Activities***

Our largest source of operating cash is from the sales of our products to our consumers and customers. Our primary uses of cash from operating activities are for cost of revenue, selling, general and administrative expenses, marketing expenses and research and development expenses. We have in the three and six months ended June 30, 2025 and in the past generated negative cash flows from operating activities and have in the past supplemented working capital requirements through net proceeds from the sale and maturity of short-term investments.

Net cash used in operating activities of $3.7 million for the six months ended June 30, 2025 was primarily due to a net decrease in cash related to changes in operating assets and liabilities of $22.9 million, partially offset by non-cash adjustments of $12.1 million and net income of $7.1 million. Non-cash adjustments for accounts receivable reserves, inventory reserves and utilization of marketing credits are included in "other" in the accompanying condensed consolidated statements of cash flows. Cash used in operating activities primarily consisted of a $11.4 million increase in inventory, a $6.5 million decrease in accounts payable and accrued expenses due to timing of payments, a $4.2 million use of cash due to operating lease obligations, and a $1.6 million increase in accounts receivable, partially offset by a $1.0 million decrease in prepaid expenses and other assets. Non-cash adjustments primarily consisted of stock-based compensation of $5.1 million, amortization of operating Right-of-Use ("ROU") assets of $3.3 million, and depreciation and amortization of $1.5 million.

Net cash provided by operating activities of $3.3 million for the six months ended June 30, 2024 was primarily due to non-cash adjustments of $18.4 million, partially offset by a net loss of $5.5 million and a net decrease in cash related to changes in operating assets and liabilities of $9.7 million. Non-cash adjustments primarily consisted of stock-based compensation of $11.4 million, amortization of operating ROU assets of $3.2 million, utilization of marketing credits of $1.5 million and depreciation and amortization of $1.4 million. Cash used in operating activities primarily consisted of a $4.0 million use of cash due to operating lease obligations and a $3.6 million decrease in accounts payable and accrued expenses.

***Investing Activities***

Our primary use of investing cash is property and equipment.

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Net cash used in investing activities of $0.1 million for the six months ended June 30, 2025 was due to purchases of property and equipment.

Net cash used in investing activities of $0.1 million for the six months ended June 30, 2024 was due to purchases of property and equipment.

***Financing Activities***

Our financing activities primarily consisted of proceeds from sales of securities, proceeds from stock option award exercises and principal payments of financing lease obligations.

Net cash provided by financing activities of $0.5 million for the six months ended June 30, 2025 consisted primarily of $0.4 million of proceeds from stock option award exercises.

Net cash provided by financing activities of $0.6 million for the six months ended June 30, 2024 consisted primarily of $0.5 million of proceeds from stock option award exercises.

**Dividends**

We do not anticipate declaring or paying any cash dividends in the foreseeable future. Any future determination regarding the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, operating results, contractual restrictions (including any restrictions in our then-existing debt arrangements), capital requirements, business prospects and other factors our board of directors may deem relevant. The 2023 Credit Facility contains restrictions on our ability to pay dividends.

**Non-GAAP Financial Measure** 

We prepare and present our condensed consolidated financial statements in accordance with GAAP. However, management believes that adjusted EBITDA, a non-GAAP financial measure, provides investors with additional useful information in evaluating our performance.

We calculate adjusted EBITDA as net income (loss), adjusted to exclude: (1) interest and other (income) expense, net; (2) income tax provision; (3) depreciation and amortization; (4) stock-based compensation expense, including payroll tax; (5) litigation and settlement fees associated with certain non-ordinary course securities litigation claims; and (6) executive officer transition expenses.

Adjusted EBITDA is a financial measure that is not required by, or presented in accordance with GAAP. We believe that adjusted EBITDA, when taken together with our financial results presented in accordance with GAAP, provides meaningful supplemental information regarding our operating performance and facilitates internal comparisons of our historical operating performance on a more consistent basis by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of adjusted EBITDA is helpful to our investors as it is a measure used by management in assessing the health of our business, determining incentive compensation and evaluating our operating performance, as well as for internal planning and forecasting purposes.

Adjusted EBITDA is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Some of the limitations of adjusted EBITDA include that (1) it does not reflect capital commitments to be paid in the future; (2) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and adjusted EBITDA does not reflect these capital expenditures; (3) it does not consider the impact of stock-based compensation expense; (4) it does not reflect other non-operating expenses, including interest expense; (5) it does not reflect tax payments that may represent a reduction in cash available to us; and (6) it does not include certain non-ordinary cash expenses that we do not believe are representative of our business on a steady-state basis, such as executive officer transition expenses. In addition, our use of adjusted EBITDA may not be comparable to similarly titled measures of other companies because they may not calculate adjusted EBITDA in the same manner, limiting its usefulness as a comparative measure. Because of these limitations, when evaluating our performance, you should consider adjusted EBITDA alongside other financial measures, including our revenue, net income (loss) and other results stated in accordance with GAAP.

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The following table presents a reconciliation of net income (loss), the most directly comparable financial measure stated in accordance with GAAP, to adjusted EBITDA, for each of the periods presented:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended June 30,** | **For the three months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** |
| *(In thousands)* | **2025** | **2024** | **2025** | **2024** |
| **Reconciliation of Net Income (Loss) to Adjusted EBITDA** |  |  |  |  |
| &nbsp;&nbsp;Net income (loss) | $3870 | $(4077) | $7123 | $(5479) |
| &nbsp;&nbsp;Interest and other (income) expense, net | (1026) | 19 | (1812) | 82 |
| &nbsp;&nbsp;Income tax provision | 44 | 13 | 84 | 38 |
| &nbsp;&nbsp;Depreciation and amortization | 741 | 709 | 1458 | 1426 |
| &nbsp;&nbsp;Stock-based compensation | 2716 | 8905 | 5128 | 11428 |
| &nbsp;&nbsp;Securities litigation expense | 122 | 1268 | 1157 | 1670 |
| &nbsp;&nbsp;Executive officer transition expense<sup>(1)</sup> | 1066 | 700 | 1066 | 858 |
| &nbsp;&nbsp;Payroll tax expense related to stock-based compensation | 84 | 58 | 341 | 216 |
| Adjusted EBITDA | $7617 | $7595 | $14545 | $10239 |

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__________________

(1) For the three and six months ended June 30, 2025, this includes separation, bonus and recruiting costs related to our Chief Financial Officer transition. For the three and six months ended June 30, 2024, this includes sign-on bonus and relocation costs related to the appointment of our Chief Executive Officer and separation costs related to the termination of our founder and former Chief Creative Officer.

**Material Cash Requirements**

As of June 30, 2025, there were no changes to our material cash requirements from those described under "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report.

**Critical Accounting Policies and Estimates**

Our condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q are prepared in accordance with GAAP. The preparation of condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.

Our critical accounting estimates are described under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates" in our Annual Report and the notes to the audited consolidated financial statements appearing in our Annual Report. During the three and six months ended June 30, 2025, there were no material changes to our critical accounting estimates from those discussed in our Annual Report.

**Recent Accounting Pronouncements**

Refer to Note 2, "Summary of Significant Accounting Policies" to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for a discussion of recently issued accounting pronouncements.

**Emerging Growth Company Status** 

In April 2012, the JOBS Act was enacted. Section 107(b) of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the extended transition period to comply with new or revised accounting standards and to adopt certain of the reduced disclosure requirements available to emerging growth companies. As a result of the accounting standards election, we are not subject to the same implementation timing for new or revised accounting standards as other public companies that are not emerging growth companies which may make comparison of our financials to those of other public companies more difficult.

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**Item 3. Quantitative and Qualitative Disclosures about Market Risk**

Under SEC rules and regulations, as a smaller reporting company, we are not required to provide the information required by this item.

**Item 4. Controls and Procedures.** 

**Evaluation of Disclosure Controls and Procedures**

We maintain "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of the period ended June 30, 2025, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective at a reasonable assurance level.

**Changes in Internal Control over Financial Reporting** 

There was no change in the Company's internal control over financial reporting that occurred during the quarter ended June 30, 2025 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

**Limitations on Effectiveness of Controls and Procedures**

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Our management, including our principal executive officer and principal financial officer, believe that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud.

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**PART II—OTHER INFORMATION**

**Item 1. Legal Proceedings.**

The information contained under the heading "Litigation" in Note 7 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q is incorporated by reference into this Item.

**Item 1A. Risk Factors.** 

**RISK FACTOR SUMMARY**

*Our business is subject to numerous risks. The following summary highlights some of the risks you should consider with respect to our business and prospects. You should carefully consider the risks and uncertainties described in our Annual Report, together with all of the other information in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes as disclosed in our Annual Report. The risks and uncertainties described in our Annual Report and in this Quarterly Report on Form 10-Q are not the only ones we face. Additional risk and uncertainties that we are unaware of or that we deem immaterial may also become important factors that adversely affect our business. The realization of any of these risks and uncertainties could have a material adverse effect on our reputation, business, financial condition, results of operations, growth and future prospects as well as our ability to accomplish our strategic objectives. In that event, the market price of our common stock could decline and you could lose part or all of your investment.*

Investing in our common stock involves substantial risks. Some of the more significant risks include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our past growth may not be indicative of our future growth and we may not be able to effectively manage our future growth or evaluate our future prospects. If we fail to effectively manage our future growth or evaluate our future prospects, our business could be adversely affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our quarterly operating results may fluctuate, which could cause our stock price to decline.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our future success depends, in part, on our ability to achieve our long-term strategy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Consolidation of retail customers, the loss of a significant retail or third-party ecommerce customer or a significant change in such customers' historical purchasing patterns has in the past and could in the future negatively impact our sales and ability to achieve or maintain profitability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• International trade disputes and the U.S. government's trade policy, including recently enacted tariffs and potential new tariffs, could adversely affect our business, financial condition, results of operations and prospects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Overall macroeconomic trends, including due to pandemics or disease outbreaks, have had and may continue to have an adverse effect on our business, financial condition, results of operations and prospects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If we fail to cost-effectively acquire new consumers or retain our existing consumers, our business could be adversely affected. Our sales and profit are dependent upon our ability to expand our existing consumer relationships and acquire new consumers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may not be able to compete successfully in our highly competitive market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our strategic initiatives, including as part of the Transformation Initiative, to reduce our costs could have long-term adverse effects on our business, financial condition, results of operations and prospects, could result in total costs and expenses that are greater than expected, and we may not realize the operational or financial benefits from such actions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We must expend resources to maintain consumer awareness of our brand, build brand loyalty and generate interest in our products. Our marketing strategies and channels will evolve and shifts in our marketing strategies and efforts may or may not be successful.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our brand and reputation may be diminished due to real or perceived quality, safety, efficacy or environmental impact issues with our products, which could have an adverse effect on our business, financial condition, results of operations and prospects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our ability to maintain our competitive position is largely dependent on the services of our senior management and other key personnel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We have a history of net losses and we may not be able to achieve or maintain profitability in the future.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our business may be adversely affected if we are unable to provide our consumers with a technology platform that is able to respond and adapt to rapid changes in technology.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A disruption in our operations could have an adverse effect on our business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our business, including our costs and supply chain, is subject to risks associated with sourcing, manufacturing, warehousing, distribution and logistics, and the loss of any of our key suppliers or logistical service providers could negatively impact our business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We rely on third-party suppliers, manufacturers, retail and ecommerce customers and other vendors, and they may not continue to produce products or provide services that are consistent with our standards or applicable regulatory requirements, which could harm our brand, cause consumer dissatisfaction, and require us to find alternative suppliers of our products or services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Health and safety incidents or advertising inaccuracies or product mislabeling may have an adverse effect on our business by exposing us to lawsuits, product recalls or regulatory enforcement actions, increasing our operating costs and reducing demand for our product offerings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increasing scrutiny and evolving expectations from stakeholders with respect to our ESG practices, performance, commitments and disclosures may impact our reputation, increase our costs and impact our access to capital.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We are increasingly dependent on information technology and our ability to process data in order to operate and sell our products, and if we (or our third parties) are unable to protect against software and hardware vulnerabilities, service interruptions, data corruption, cyber-based attacks, ransomware or security breaches, or if we fail to comply with our commitments and assurances regarding the privacy and security of such data, we could experience adverse consequences, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions to our business operations; interruptions in our ability to provide our goods and services exposure to liability; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse consequences.

**RISK FACTORS**

*Other than the risk factors set forth below, there have been no material changes to the risk factors set forth in the section titled* "*Risk Factors*" *included in our Annual Report.* 

***International trade disputes and the U.S. government's trade policy, including recently enacted tariffs and potential new tariffs could adversely affect our business, financial condition, results of operations and prospects.***

International trade disputes or changes in government priorities could result in tariffs and other protectionist measures that could adversely affect our business. Tariffs could increase the cost of our products and the components and raw materials that go into making them. These increased costs could adversely impact the gross margin that we earn on our products. Countries may also adopt other protectionist measures that could limit our ability to offer our products. The recent announcements of substantial new tariffs and other restrictive trade policies have created a dynamic and unpredictable trade landscape, which could adversely impact our business.

The U.S. government has adopted, and indicated its intent to continue to adopt, a new approach to trade policy, and in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements. It has also initiated tariffs on certain foreign goods and has raised the possibility of imposing significant, additional tariff increases or expanding the tariffs to capture other types of goods. Although the tariffs that have been initiated as of June 30, 2025 have not had a material impact on our operating results, to the extent that significant additional tariffs are imposed including the new tariffs being imposed under the new presidential administration they could have a material impact on our operating results. In April 2025, the U.S. government announced a baseline tariff of 10% on products from all countries and an additional individualized reciprocal tariff on the countries with which the United States has the largest trade deficits, including an additional tariff of 145% on certain goods imported from China, and a 25% tariff on certain goods imported from Mexico and Canada. In May 2025, the U.S. government and China agreed to roll back the tariff rate of 145% on certain goods imported from China to 30% for a period of 90 days (the "May 2025 Agreement"). Certain products, such as our baby wipes, are imported from China, our diapers are imported from Mexico and certain other components of our products are sourced from other countries and could be subject to the new tariffs. The imposition of tariffs, including the April 2025 tariffs, even when reduced by subsequent agreements, including the May 2025 Agreement, and certain tariffs in the past, have led costs on products from China to increase, including our wipes products and certain product components, and other new tariffs imposed by the United States could cause costs to increase further, which could lead to price increases on these products, which may not be absorbed by consumers or may lead to decreased demand; or any such tariffs could require a shift in manufacturing location, which could have an adverse effect on results of operations and could introduce uncertainty, including on product quality, with a new manufacturer. Our manufacturers, suppliers and distribution channels are also affected by the current trade environment, and we may experience supply chain disruptions as a result of increased costs and uncertainty, as well as risks to the long-term viability of key vendors, which may impact our ability to meet customer demand or manage inventory efficiently. Tariff and other trade-related cost pressures and supply chain disruptions may lead to reputational harm if we are unable to deliver products on expected timelines or if any price increases are poorly received by our consumers. Any attempt to mitigate the adverse effects of these tariffs may not be successful.

We cannot predict the extent to which the United States or other countries will impose quotas, duties, tariffs, taxes or other similar restrictions upon the import or export of our products in the future, nor can we predict future trade policy or the terms of any renegotiated trade agreements and their impact on our business. The adoption and expansion of trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs or trade agreements or policies may exacerbate unfavorable macroeconomic conditions including inflationary pressures, foreign exchange volatility, financial market instability, and economic recessions or downturns, which may also adversely impact demand for our products, our costs, our consumers, our suppliers, and limit our access to capital, which in turn could have an adverse effect on our business, financial condition, results of operations and prospects. Ongoing tariff, trade restrictions and macroeconomic uncertainty also may contribute to volatility in the price of our common stock.

While we continue to monitor trade developments, the ultimate impact of these risks remains uncertain and any prolonged economic downturn, escalation in trade tensions, or deterioration in international perception of U.S.-based companies could materially and adversely affect our business, results of operations, financial condition and prospects. In addition, tariffs and other trade developments have and may continue to heighten the risks related to the other risk factors described in the section titled "Risk Factors" included in our Annual Report.

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***We rely on third-party suppliers, manufacturers, retail and ecommerce customers and other vendors, and they may not continue to produce products or provide services that are consistent with our standards or applicable regulatory requirements, which could harm our brand, cause consumer dissatisfaction, and require us to find alternative suppliers of our products or services.***

We do not own or operate any manufacturing facilities. We use multiple third-party suppliers and manufacturers based primarily in the United States, China and Mexico and other countries to a lesser extent, to source, manufacture and partner with us for the innovation of all of our products, including product components, under our owned brand. We engage many of our third-party suppliers and manufacturers on a purchase order basis and in some cases are not party to long-term contracts with them. The ability and willingness of these third parties to supply, manufacture and to partner in innovation of our products may be affected by raw material availability and prices, competing orders placed by other companies and the demands of those companies. Our operating results have been negatively impacted by increases in the costs of manufacturing our products, and we have no guarantees that costs will not continue to rise. For example, some of our contracts with third-party manufacturers have clauses that trigger good faith renegotiation of purchase costs in the case of significant raw material cost escalation. In 2021, we were informed by two third-party manufacturers that those hurdles had been met. In addition, in 2022, we received requests from the same two third-party manufacturers to renegotiate purchase costs due to continued increases in raw material costs. As a result, we negotiated and agreed to higher purchase prices, which negatively impacted our cost of revenue in 2022 and 2023. In 2025, we have agreed to increased purchase costs from our diaper manufacturer and received requests to renegotiate purchase costs from other third-party manufacturers. As a result, we expect those increased purchase costs to negatively impact our cost of revenue in 2025. If we experience significant increases in demand, or need to replace a significant number of existing suppliers or manufacturers, there can be no assurance that additional supply and manufacturing capacity will be available when required on terms that are acceptable to us, or at all, or that any supplier or manufacturer will allocate sufficient capacity to us in order to meet our requirements. In addition, if we experience significant decreases in demand, our third-party manufacturers may increase product purchase costs. Furthermore, our reliance on suppliers and manufacturers outside of the United States, the number of third parties with whom we transact and the number of jurisdictions to which we sell complicates our efforts to comply with customs duties and excise taxes; any failure to comply could adversely affect our business.

In addition, quality control problems, such as the use of materials and delivery of products that do not meet our quality control standards and specifications or comply with applicable laws or regulations, could harm our brand and business or cause consumer dissatisfaction. For example, as disinfecting and sanitization products faced supply chain challenges during the COVID-19 pandemic, decelerating market demand and aging and slower turning inventory, we had received some product quality complaints from customers and consumers that resulted in additional refunds, returns, write-offs and remediation costs. Remediation costs would be significant, including the cost to rework a product to be in sellable condition or the cost to destroy a product that cannot be remediated, and while immaterial as of June 30, 2025, they could have an adverse effect on our business, financial condition and results of operations. Quality control problems could result in regulatory action, such as restrictions on importation, products of inferior quality or product stock outages or shortages, harming our sales and creating inventory write-downs for unusable products.

We have also outsourced portions of our fulfillment process, as well as certain technology-related functions, to third-party service providers. Specifically, we rely on third parties in a number of foreign countries and territories, we are dependent on third-party vendors for credit card processing, and we use third-party hosting and networking providers to host our sites. The failure of one or more of these entities to provide the expected services on a timely basis, or at all, or at the prices we expect, or the costs and disruption incurred in changing these outsourced functions to being performed under our management and direct control or that of a third party, could have an adverse effect on our business, financial condition, results of operations and prospects. We are not party to long-term contracts with some of our retail and ecommerce customers, and upon expiration of these existing agreements, we may not be able to renegotiate the terms on a commercially reasonable basis, or at all.

Further, our third-party manufacturers, suppliers and retail and ecommerce customers may:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• have economic or business interests or goals that are inconsistent with ours;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• take actions contrary to our instructions, requests, policies or objectives;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• be unable or unwilling to fulfill their obligations under relevant purchase orders or manufacturing or supply agreements, including obligations to meet our production deadlines, quality standards, pricing guidelines and product specifications, and to comply with applicable regulations, including those regarding the safety and quality of products;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• have financial difficulties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• encounter raw material or labor shortages;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• encounter increases in raw material or labor costs which may affect our procurement costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• encounter difficulties with proper payment of custom duties or excise taxes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• disclose our confidential information or intellectual property to competitors or third parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• engage in activities or employ practices that may harm our reputation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• work with, be acquired by, or come under control of, our competitors.

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***We may be unable to accurately forecast revenue, gross margin or operating expenses and appropriately plan our expenses in the future.***

Revenue and results of operations are difficult to forecast because they generally depend on the volume, timing and type of orders we receive across our various channels, all of which are uncertain. Forecasts have been and may continue to be particularly challenging in the current macroeconomic environment. We base our expense levels and investment plans on our estimates of revenue and gross margin. We cannot be sure prior growth rates and trends are meaningful predictors of future growth. For example, in the third quarter of 2022, some of our customers reduced inventory on hand and changed their fulfillment schedules, which negatively impacted our fulfillment operations in 2022. Furthermore, during 2024, we experienced distribution losses with two of our largest retail customers on certain diaper SKUs mainly related to these retailers' footprint changes for certain product categories overall and a shift to more exclusive non-gendered prints, which has impacted our revenue in 2025 for the first and second quarter and we expect will negatively impact our diaper revenue in the future. If our assumptions prove to be wrong, we may generate lower revenue or gross margin than anticipated or may spend more than we anticipate acquiring and retaining consumers either of which could have an adverse effect on our business, financial condition, results of operations and prospects.

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.** 

None.

**Item 3. Defaults Upon Senior Securities.**

None.

**Item 4. Mine Safety Disclosures.**

Not applicable.

**Item 5. Other Information.**

*Rule 10b5-1 Trading Arrangements and Non-Rule 10b5-1 Trading Arrangements*

The table below shows the contracts, instructions or written plans adopted or terminated during the quarter ended June 30, 2025 providing for the purchase and/or sale of the Company's securities by the Company's directors and officers (as defined in Rule 16a-1(f) under the Exchange Act):

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | | | | **Type of Trading Arrangement** | **Type of Trading Arrangement** | | |
|<br>**Name** |<br>**Title** |<br>**Action** |<br>**Date** | **Rule 10b5-1**<sup>(1)</sup> | **Non-Rule 10b5-1**<sup>(2)</sup> |<br>**Total Shares of Common Stock to be Sold**<sup>(3)</sup> |<br>**Expiration Date**<sup>(4)</sup> |
| Kate Barton | Chief Growth Officer | Adopt | 5/12/2025 | x |  | Up to 55,671 | 5/29/2026 |

---

(1) Contract, instruction or written plan intended to satisfy the affirmative defense conditions of Rule10b5-1(c) under the Exchange Act.

(2) Non-Rule Rule 10b5-1 trading arrangement as defined in Item 408(c) of Regulation S-K under the Exchange Act.

(3) The total shares to be sold cannot be determined at the date of this Quarterly Report as the planned sale amount for such officer is equal to a designated percentage of the net number of shares after a portion of the shares have been sold to cover withholding taxes from RSU vesting. The amount listed for such officer reflects the maximum number of shares available to be sold, which is the net number of shares after taxes, multiplied by the designated percentages set forth in such officer's respective 10b5-1 trading plan.

(4) Each Plan terminates on the earlier of: (i) the expiration date listed in the table above; (ii) the first date on which all trades set forth in the Plan have been executed; or (iii) such date the Plan is otherwise terminated according to its terms.

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During the three months ended June 30, 2025, Etienne von Kunssberg, our SVP, Supply Chain entered into a sell-to-cover arrangement adopted pursuant to Rule 10b5-1 on June 16, 2025. The sell-to-cover arrangements adopted pursuant to Rule 10b5-1 authorized the pre-arranged sale of shares to satisfy tax withholding obligations of the Company arising exclusively from the vesting of time-vesting or performance-vesting restricted stock units and the related issuance of shares of Common Stock. The amount of shares of Common Stock to be sold to satisfy the Company's tax withholding obligations under this arrangement is dependent on future events which cannot be known at this time, including the future trading price of Company shares. The expiration date relating to the arrangement is dependent on future events which cannot be known at this time, including the final vest date of the applicable time-vesting or performance-vesting restricted stock units and the officer's termination of service.

------

**Item 6. Exhibits.** 

**EXHIBIT INDEX** 

---

| | |
|:---|:---|
| **Exhibit Number** | **Exhibit Description** |
| <u>[3.1](https://www.sec.gov/Archives/edgar/data/0001530979/000119312521157761/d488865dex31.htm)</u> | Amended and Restated Articles of Incorporation, as currently in effect (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K (File No. 001-40378), filed with the SEC on May 11, 2021). |
| <u>[3.2](https://www.sec.gov/Archives/edgar/data/1530979/000153097925000024/thehonestcompanyinc-arby.htm)</u> | Amended and Restated Bylaws, as currently in effect (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K (File No. 001-40378), filed with the SEC on March 12, 2025). |
| <u>[10.1](https://www.sec.gov/Archives/edgar/data/1530979/000153097925000047/exhibit101-executiveemploy.htm)</u> | Employment Agreement, dated April 17, 2025, by and between the Company and Curtiss Bruce (incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q (File No. 001-40378), filed with the SEC on May 7, 2025). |
| <u>[10.2](honestcoq2-25ex102xdlorett.htm)</u> | Retirement Agreement and General Release of Claims, dated June 16, 2025, by and between the Company and Dave Loretta. |
| <u>[31.1](honestcoq2-25exhibit311.htm)</u> | Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| <u>[31.2](honestcoq2-25exhibit312.htm)</u> | Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| <u>[32.1](honestcoq2-25exhibit321.htm)</u>\* | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  |
| <u>[32.2](honestcoq2-25exhibit322.htm)</u>\* | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| 101.INS <br>101.SCH | Inline XBRL Instance Document —the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. <br>Inline XBRL Taxonomy Extension Schema Document |
| 104 | Cover page formatted as inline XBRL and contained in Exhibit 101 |

---

\* Furnished herewith and not deemed to be "filed" for purposes of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference into any filing under the Securities Act, or the Exchange Act (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

------

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
| | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Honest Company, Inc. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Honest Company, Inc. |
| Date: August 6, 2025 | By: | /s/ Carla Vernón  |
|  |  | **Carla Vernón** <br>**Chief Executive Officer and Director** |
|  |  | *(Principal Executive Officer)* |
| Date: August 6, 2025 | By: | /s/ Curtiss Bruce |
|  |  | **Curtiss Bruce**<br>**Executive Vice President, Chief Financial Officer** |
|  |  | *(Principal Financial Officer and <br>Accounting Officer)* |

---

## Exhibit 10.2

**Exhibit 10.2**

**RETIREMENT AGREEMENT** 

**<u>AND GENERAL RELEASE OF CLAIMS</u>**

**THIS RETIREMENT AGREEMENT AND GENERAL RELEASE OF CLAIMS** ("Agreement") is entered into by and between The Honest Company, Inc. (the "Company"), and Dave Loretta ("Employee," "you," or "your") (together the "Parties" or individually a "Party"), in consideration for and as a condition to the Company's agreement to provide you with certain Separation Benefits (defined below) to which you are not otherwise entitled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Separation From Employment and Final Pay</u>. Your employment with the Company will terminate as a result of your voluntary retirement, effective on June 16, 2025 ("Separation Date"). Your employment will end on the Separation Date regardless of whether you sign this Agreement or agree to the following terms and conditions. On the Separation Date (or by no later than the timeframe permitted by applicable law), and independent of this Agreement, the Company will provide you with a final paycheck that will fully compensate you for all wages, vacation, and other compensation earned and payable to you through the Separation Date, less applicable taxes and withholdings. The Separation Benefits described in Section 3 below are separate from and in addition to your final pay. You understand that, except as otherwise provided in this Agreement, you are not entitled to anything further from the Company, including reinstatement by the Company, or any compensation or benefits of any kind, for any reason, after the Separation Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Benefits Termination.</u> Your eligibility for employee benefits as an employee of the Company will terminate on June 30, 2025. You will be separately notified of your right to continue your healthcare coverage under COBRA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Separation Benefits</u>. In consideration for entering into this Agreement, and provided that you: (i) remain in compliance with all Company policies; your Employment Agreement dated August 31, 2023 ("Employment Agreement"); and your Confidential Information and Invention Assignment Agreement ("CIIAA"), all through the Separation Date (and after, if applicable), (ii) deliver to the Company all Company property, pursuant to Section 10, by no later than thirty (30) days following the Separation Date, (iii) sign and return the executed copy of this Agreement to the Company on or before the expiration of the Consideration Period, (iv) fully comply with the terms of this Agreement, and (v) do not revoke this Agreement pursuant to Section 6 below, the Company will pay or extend to you, as applicable, the following (collectively referred to as the "Separation Benefits"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.the equivalent of twelve (12) months (the "Severance Period") of your base salary in effect as of the Separation Date (i.e., the gross amount of $40,812.42 per month), subject to standard payroll deductions and withholdings, payable in monthly installments as a continuation on the Company's regular payroll, beginning no later than the first regularly-scheduled payroll date following the thirtieth (30th) day after your Separation Date, provided this Agreement has become effective;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.If you timely elect continued coverage under COBRA, the Company will pay for the COBRA premiums to continue your health insurance coverage (including coverage

------

for eligible dependents, if applicable) ("COBRA Premiums") through the period (the "COBRA Premium Period") starting on the Separation Date and ending on the earliest to occur of: (i) the twelve (12) month anniversary of the Separation Date; (ii) the date you become eligible for group health insurance coverage through a new employer; or (iii) the date you cease to be eligible for COBRA continuation coverage for any reason. You must timely pay your premiums, and then provide the Company with proof of same to obtain reimbursement for your COBRA premiums under this section. In the event you become covered under another employer's group health plan or otherwise cease to be eligible for COBRA during the COBRA Premium Period, you must immediately notify the Company of such event by email to the Legal Department (<u>legal@thehonestcompany.com</u>). Notwithstanding the foregoing, if the Company determines, in its sole discretion, that it cannot pay the COBRA Premiums without a substantial risk of violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company instead shall pay you, on the first day of each calendar month, a fully taxable cash payment equal to the applicable COBRA premiums for that month for the remainder of the COBRA Premium Period, which you may (but are not obligated to) use toward the cost of COBRA premiums; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.you will remain eligible to receive an annual bonus for the 2025 calendar year (notwithstanding your termination of employment prior to the payment date of the bonus), prorated based on the number of days you were employed by the Company in the 2025 calendar year and determined by the Board and/or the Committee in its discretion based on the achievement of the applicable performance goals for the 2025 calendar year, to be paid at the same time that annual bonuses for the 2025 calendar year are paid to other Company executives (but in any event no later than March 15, 2026).

You acknowledge that the Company has no duty or obligation (including pursuant to the Employment Agreement) to provide you the Separation Benefits absent this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Equity Interests</u>. Your entitlement to outstanding equity awards, if any, shall be governed by the terms of the stock plan governing such options and the documents by which such options were granted to you, along with any amendments thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.<u>General Release</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.In consideration of the Separation Benefits set forth in Section 3 above, you on behalf of yourself and your heirs, spouse, executor, assigns, administrators, representatives, and agents, hereby release and forever discharge the Company and each of its respective past, present and future employees, officers, directors, members, agents, trustees, administrators, representatives, owners, shareholders, partners, insurers, fiduciaries, attorneys, subsidiaries, parent companies, affiliates, related entities, assigns, predecessors and successors in interest, as well as each of their past, present and future employees, officers, directors, members, agents, trustees, administrators, representatives, owners, shareholders, partners, insurers, fiduciaries, attorneys, subsidiaries, parent companies, affiliates, related entities, assigns, predecessors and successors in interest, jointly and severally, (referred to collectively hereafter as the "Releasees"), from any and all liabilities, claims, causes of action, charges, complaints, obligations, costs, losses, damages, injuries, penalties, interest, attorneys' fees, and other legal

------

responsibilities, of any form whatsoever, whether known or unknown, unforeseen, unanticipated, unsuspected or latent (referred to collectively hereafter as a "Claim" or "Claims"), of whatever kind and nature, whether now known or unknown, which you have at any time owned or held up to and including the date you sign this Agreement including, and without limiting the generality of the foregoing, any and all Claims arising out of, connected with, or relating to: (a) your employment or termination of employment with the Company; (b) any act or omission by or on the part of any of the Releasees occurring from the beginning of time up through and including your execution of this Agreement; (c) any Claim for violation of any federal, state or local law or regulation prohibiting discrimination, failure to prevent discrimination, harassment or retaliation of any kind; (d) Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Americans with Disabilities Act of 1990, as amended; the Genetic Information and Discrimination Act; the Rehabilitation Act of 1973, as amended; the Age Discrimination in Employment Act of 1967 ("ADEA"), as amended by the Older Workers' Benefit Protection Act of 1990 ("OWBPA"); the Rehabilitation Act of 1973, as amended; the National Labor Relations Act, as amended; the Labor-Management Relations Act, as amended; the Family and Medical Leave Act; the Employee Retirement Income Security Act; the Lily Ledbetter Fair Pay Act; the Pregnancy Discrimination Act; the Occupational Safety and Health Act; the Federal Worker Adjustment and Retraining Notification Act; the Fair Labor Standards Act (including the Equal Pay Act) or the Consolidated Omnibus Budget Reconciliation Act (COBRA), as amended; the Sarbanes-Oxley Act of 2002; the California Worker Adjustment and Retraining Notification Act; the California Business & Professions Code; the California Family Rights Act; the California Labor Code; the California Industrial Welfare Commission Wage Orders; the California Fair Employment and Housing Act; the California and United States Constitutions; and any local ordinance or federal or state statute, regulation or constitution; and (e) any Claim for attorneys' fees, penalties, interest, costs or expenses. If any claim is not subject to release, to the extent permitted by law, you waive any right or ability to be a class or collective action representative or to otherwise participate or recover any damages, injunctive, declaratory, monetary, or other relief, in any putative or certified class, collective or multi-party action or proceeding based on such a claim in which the Company or any of the other Released Parties is a party. You represent that you are not an "aggrieved employee" for any purpose including under the California Private Attorneys' General Act ("PAGA"), and therefore the Company is not liable for any penalties pursuant to PAGA for any conduct arising during or out of your employment with the Company. **You acknowledge that you have been advised, as required by California Government Code Section 12964.5(b)(4), that you have the right to consult an attorney regarding this Agreement and that you were given a reasonable time period of not less than five (5) business days in which to do so.** You further acknowledge and agree that, in the event you sign this Agreement prior to the end of the reasonable time period provided by the Company, your decision to accept such shortening of time is knowing and voluntary and is not induced by the Company through fraud, misrepresentation, or a threat to withdraw or alter the offer prior to the expiration of the reasonable time period, or by providing different terms to employees who sign such an agreement prior to the expiration of the time period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.The General Release in Section 5(a) of this Agreement is intended to be a full and final release covering all suspected, unknown, undisclosed and unanticipated Claims which may have arisen, or may arise, from any act or omission prior to the date that you sign this

------

Agreement, and which arise out of or are related, directly or indirectly, to the dealings between the Parties to this Agreement, or any matters described above. If you later discover facts different from or in addition to those facts you currently know or believe to be true, this Agreement, the waivers and releases will nevertheless remain effective in all respects. You and on behalf of anyone or any entity claiming through you, waive any and all rights or benefits which you may now have, or in the future may have, under the terms of Cal. Civ. Code § 1542 which provides as follows:

**A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.**

Notwithstanding the provisions of § 1542, and for the purpose of implementing a full and complete release and discharge, you expressly acknowledge that (i) this Agreement is intended to and does include in its effect, without limitation, all Claims you do not know or suspect to exist in your favor against any of the Releasees, up to and including the date you sign this Agreement, and (ii) this Agreement expressly contemplates the extinguishment of such Claims.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.<u>Older</u> <u>Workers' Benefit Protection Act Disclosures and Consideration/ Revocation Periods.</u> This Agreement constitutes a knowing and voluntary waiver of any and all rights or Claims that you have or may have under the Federal Age Discrimination in Employment Act, as amended by the OWBPA. You agree and acknowledge that this Section and this Agreement are written in a manner to be understood by you. You are hereby advised in writing to consult with an attorney of your choosing before signing this Agreement. You may take up to twenty-one (21) days to review and consider this Agreement ("Consideration Period"), after which time this Agreement to provide you the Separation Benefits will expire. The Parties agree that modification of this Agreement, whether material or immaterial, shall not restart the running of the Consideration Period. If you decide not to use the full Consideration Period, you knowingly and voluntarily waive any claims that you were not given or did not use the full Consideration Period before signing this Agreement and acknowledge that you have signed this Agreement knowingly and voluntarily. You may revoke this Agreement at any time within the 7-day period following the date you sign this Agreement ("Revocation Period") by providing written notice of revocation via email to the Legal Department (<u>legal@thehonestcompany.com</u>), so that such written notice is received before the Revocation Period expires. Subject also to Section 3 of this Agreement, the Company's obligation to provide any payment under this Agreement does not become final and binding until after the expiration of the Revocation Period and only if you have not revoked this Agreement during such time period. If you exercise your right to revoke the Agreement during the Revocation Period, the Company reserves the right to treat the Agreement as void, in whole or in part, at its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.<u>Your Protected Rights; Non-Interference</u>. Notwithstanding the above, the matters released in Section 5 do not include: (i) any rights to receive the Separation Benefits; (ii) any

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claim for vested and accrued benefits under any benefit plan governed by the Employment Retirement income Security Act of 1974, as amended; (iii) any claim for unemployment or state disability insurance benefits or worker compensation benefits; (iv) any claim of breach of the terms of this Agreement; or (v) any other claims that cannot lawfully be released as a matter of law or public policy. Additionally, nothing in this Agreement restricts or prevents you from disclosing or discussing allegations of discrimination, harassment, retaliation, wage and hour violations, or sexual assault, or conduct that is recognized as against a clear mandate of public policy or disclosing or discussing the settlement of such a claim or waives your right to file a charge, cooperate or participate in an investigation or proceeding conducted by an administrative or regulatory agency, such as the Equal Employment Opportunity Commission ("EEOC"); to bring a suit to challenge the validity of this Agreement as it applies to the claims seeking to enforce the ADEA; to file an unfair labor practice charge under the National Labor Relations Act; to make disclosures that are required by law; or to testify truthfully, when required or requested to attend the proceeding pursuant to a court order, subpoena, or written request from an administrative agency or the legislature. However, to the maximum extent permitted by applicable law, the consideration provided to you in this Agreement shall be the sole relief provided to you by the Releasees for the matters released in Section 5 and you agree to waive any monetary or other personal relief against the Releasees in connection with any such claim, charge, or proceeding. Nothing in this Agreement shall be interpreted to prohibit or prevent you from receiving a bounty or similar award for providing information to a government agency (such as the U.S. Securities and Exchange Commission) or filing or participating in any whistleblower complaint filed with the U.S. Securities and Exchange Commission.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.<u>Covenant Not to Sue; Representations</u>. You acknowledge and agree that you have not and will not directly or indirectly institute or assist in any legal action against the Releasees based upon, arising out of, or related to any Claims released herein. You further acknowledge and agree that (a) you have not sustained any workplace injury of any kind during your employment with the Company, and accordingly, you do not intend to file any claim for or seek any workers' compensation benefits; (b) you are aware of no facts or evidence that would give rise to any governmental action against any of the Releasees; and (c) you have not made any claims or allegations to the Company related to discrimination, harassment, retaliation, wage and hour violations, or sexual assault, and that none of the payments set forth in this Agreement are related to alleged discrimination, harassment, retaliation, wage and hour violations, or sexual assault. You agree that except for the Separation Benefits, you have been paid all wages and other compensation that you have earned or become entitled to during your employment with the Company, including but not limited to, all wages, salary, bonuses and commissions, vacation and paid time off, and reimbursable expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.<u>Confidentiality and Non-Disparagement</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.You agree that the terms and conditions of this Agreement are confidential, including, but not limited to, the amounts paid to you under this Agreement. You will not disclose or publicize the existence of this Agreement or any of its terms to any person, or in any manner, except to your spouse, legal counsel, or accounting advisors and then only after securing the agreement of each such individual to maintain the confidentiality of this Agreement.

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Notwithstanding, this Agreement does not prohibit or restrict you from initiating communications directly with, or responding to any inquiry from, or providing testimony before, any self-regulatory organization or state or federal regulatory authority, regarding this Agreement or its underlying facts or circumstances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.You further acknowledge that, during the term of your employment by the Company, you have had access to and possession of Confidential Information (defined below), and that following the Separation Date, you must continue to comply with the terms of the CIIAA. For the purposes of this Agreement, "<u>Confidential Information</u>" shall have the meaning ascribed to such term in the CIIAA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.In addition, you agree that, at all times following the Separation Date you will not make any voluntary statements, written or oral, or cause or encourage others to make any such statements that defame, disparage or in any way criticize the personal and/or business reputations, practices or conduct of the Releasees. The Company shall direct its current officers not to make any voluntary statements, written or oral, or cause or encourage others to make any such statements that defame, disparage or in any way criticize your personal and/or business reputations, practices or conduct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Notwithstanding any of the foregoing, nothing in this Agreement prevents any person from (i) disclosing either (x) the underlying facts or circumstances regarding conduct that they reasonably believe to be illegal discrimination, harassment, retaliation, a wage and hour violation, or sexual assault, or that is recognized as against a clear mandate of public policy or (y) the existence of a settlement involving such conduct; (ii) testifying truthfully in any legal proceeding, including, but not limited to, responding to any inquiries made by the EEOC or any government agency; or (iii) engaging in activity protected by the National Labor Relations Act, including the right to discuss terms and conditions of employment with current or former co-workers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Surrender and Return of Company Property</u>. As a condition of your receipt of the Separation Benefits, you represent and warrant that proprietary items will be returned to an authorized officer of the Company, including but not limited to, any computer hardware or software, credit cards, key cards, cellular phones, any books or manuals issued by the Company and any other Confidential Information (including, without limitation, all copies or reproductions of such documents or materials, computer disks, backup copies, and other forms of electronic storage media) within thirty (30) days of the Separation Date, and that you will not retain any copies thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.<u>Cooperation Agreement</u>. You agree to cooperate fully with the Company in connection with any and all pending or future litigation or administrative claims, investigations, or proceedings involving the Company, including without limitation your meeting with the Company's counsel and/or advisors at reasonable times, upon their request, and providing written statements or live testimony (in court or at depositions) that is truthful, and complete in accordance with information known to you. To the extent any obligations under this Section require you to travel and/or incur expenses, the Company agrees to pay for any and all such

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travel and/or expenses, with such travel and/or expenses to be pre-approved by the Company before they are incurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.<u>Tax Matters</u>. This Agreement is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended ("Section 409A"), including the exceptions thereto, and shall be construed and administered in accordance with such intent. Notwithstanding any other provision of this Agreement, payments provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service, as a short-term deferral, or as a settlement payment pursuant to a bona fide legal dispute shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, any installment payments provided under this Agreement shall each be treated as a separate payment. To the extent required under Section 409A, any payments to be made under this Agreement in connection with a termination of employment shall only be made if such termination constitutes a "separation from service" under Section 409A. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest, or other expenses that may be incurred by you on account of non-compliance with Section 409A. You acknowledge that any and all federal, state, or local tax liability that may be due or become due because of the Separation Benefits are your sole responsibility, and you further agree to hold the Company harmless and indemnify it for any and all liabilities, penalties, interest, costs, attorneys' fees and expenses relating to any tax or contribution that may be incurred or demanded as a result of your receipt of the Separation Benefits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.<u>Severability</u>. If any provision of this Agreement is held to be void, null or unenforceable, the remaining portions will remain in full force and effect. To the extent any provision of the general release of claims is deemed to be invalid or unenforceable, the Parties agree to enter into a full and general release of all claims by you that is not invalid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.<u>Governing Law; Dispute Resolution</u>. This Agreement shall be deemed to have been executed and delivered within the State of California, and the rights and obligations of the parties hereunder shall be construed and enforced in accordance with, and governed by, the laws of the State of California, without regard to principles of conflict of laws. Any and all disputes arising out of or in connection with this Agreement, or the breach thereof, shall be construed, arbitrated and finally resolved by and in accordance with Section 11 of the Employment Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.<u>No Admission</u>. Neither this Agreement nor the furnishing of the consideration for this Agreement will be deemed or construed as an admission of liability or wrongdoing on the part of the Releasees, nor will it be admissible as evidence in any proceeding other than for the enforcement of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.<u>Execution; Counterparts</u>. You shall not execute this Agreement before the Separation Date, and the Company has no obligation to countersign this Agreement you execute this Agreement before the Separation Date. This Agreement may be executed in counterparts,

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and each counterpart, when executed, shall have the efficacy of a signed original. Photographic or facsimile copies of such signed counterparts may be used in lieu of the originals for any purpose.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.<u>Acknowledgment</u>. You acknowledge that you have read this Agreement, fully understand the contents of this Agreement, freely, voluntarily and without coercion enter into this Agreement, and are signing it with full knowledge that it is intended, to the maximum extent permitted by law, as a complete release and waiver of any and all claims you may have against the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.<u>Entire Agreement</u>. This Agreement contains all of the terms, conditions, promises, representations and understandings between the Parties, and supersedes any previous written or oral agreements between the Parties, except that any provisions of the CIIAA, your previous indemnification agreement with the Company, and the Employment Agreement that survive the termination of your employment will remain in full force and effect. This Agreement cannot be modified except by a writing signed by you and an authorized officer of the Company. The Company's failure to insist upon your strict adherence to any term or obligation of this Agreement shall neither be considered a waiver nor deprive the Company of the right to thereafter expect or insist upon strict adherence to that term or obligation, or any other term or obligation, of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.<u>Effective Date</u>. This Agreement shall not become effective until 12:01 a.m. on the 8<sup>th</sup> day after you sign and date this Agreement and do not revoke it (referred to hereafter as the "Effective Date").

**YOU ACKNOWLEDGE AND UNDERSTAND THAT THIS AGREEMENT INCLUDES A RELEASE OF ALL CLAIMS. YOU ACKNOWLEDGE THAT YOU HAVE READ THIS AGREEMENT CAREFULLY, UNDERSTAND ALL OF ITS TERMS AND AGREE TO THOSE TERMS KNOWINGLY, VOLUNTARILY, AND WITHOUT DURESS. YOU ARE ADVISED TO CONSULT WITH COUNSEL ABOUT THE TERMS AND LEGAL EFFECT OF THIS AGREEMENT.** 

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| | |
|:---|:---|
| | **EMPLOYEE** |
| Dated: 6/16/2025 | /s/ Dave Loretta |
|  | Dave Loretta |
|  | **THE HONEST COMPANY, INC.** |
| Dated: 6/16/2025 | By: /s/ Brendan Sheehey |
|  | Title: General Counsel & Corporate Secretary |

---

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION**

I, Carla Vernón, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.I have reviewed this quarterly report on Form 10-Q of The Honest Company, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: August 6, 2025 | By: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/ Carla Vernón |
|  |  | Carla Vernón |
|  |  | Chief Executive Officer and Director |
|  |  | *(Principal Executive Officer)* |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION**

I, Curtiss Bruce, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.I have reviewed this quarterly report on Form 10-Q of The Honest Company, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: August 6, 2025 | By: | /s/ Curtiss Bruce |
|  |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Curtiss Bruce<br>Executive Vice President, Chief Financial Officer |
|  |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(Principal Financial Officer and Accounting Officer)* |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report on Form 10-Q of The Honest Company, Inc. (the "Company") for the period ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Carla Vernón, Chief Executive Officer of the Company, certify, pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") and 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: August 6, 2025 | By: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/ Carla Vernón |
|  |  | Carla Vernón |
|  |  | Chief Executive Officer and Director |
|  |  | *(Principal Executive Officer)* |

---

This certification shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of Section 18 of the Exchange Act. Such certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report on Form 10-Q of The Honest Company, Inc. (the "Company") for the period ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Curtiss Bruce, Chief Financial Officer of the Company, certify, pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") and 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: August 6, 2025 | By: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/ Curtiss Bruce |
|  |  | &nbsp;&nbsp;&nbsp;Curtiss Bruce<br>Executive Vice President, Chief Financial Officer |
|  |  | *(Principal Financial Officer and Accounting Officer)* |

---

This certification shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of Section 18 of the Exchange Act. Such certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

<br>