# EDGAR Filing Document

**Accession Number:** 0001530979
**File Stem:** 0001628280-25-049530
**Filing Date:** 2025-11
**Character Count:** 41795
**Document Hash:** 48e0b930de4c0f0339abb3013615b967
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001628280-25-049530.hdr.sgml**: 20251105

**ACCESSION NUMBER**: 0001628280-25-049530

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20251030

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Cost Associated with Exit or Disposal Activities

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20251105

**DATE AS OF CHANGE**: 20251105

**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:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-40378
- **FILM NUMBER:** 251453928

**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-20251030

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549** 

**FORM 8-K** 

**CURRENT REPORT** 

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934** 

**Date of Report (Date of earliest event reported): October 30, 2025**

![company logo.jpg](hnst-20251030_g1.jpg)

**The Honest Company, Inc.** 

(Exact Name of Registrant as Specified in Its Charter)

---

| | | |
|:---|:---|:---|
| **Delaware** | **001-40378** | **90-0750205** |
| (State or Other Jurisdiction<br>of Incorporation) | (Commission File Number) | (IRS Employer<br>Identification No.) |
| **12130 Millennium Drive, #500**<br>**Los Angeles, CA** | | **90094** |
| (Address of Principal Executive Offices) | | (Zip Code) |

---

**(888) 862-8818**

(Registrant's Telephone Number, Including Area Code)

**Not Applicable** 

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

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

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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. ☐

------

**Item 2.02 Results of Operations and Financial Condition.**

On November 5, 2025, The Honest Company, Inc. (the "Company") issued a press release announcing its financial results for the third quarter ended September 30, 2025. A copy of the press release is furnished as Exhibit 99.1 and incorporated herein by reference.

The information provided in this Item 2.02 of this Form 8-K, including Exhibit 99.1 hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as expressly set forth by specific reference in such filing.

**Item 2.05 Costs Associated with Exit or Disposal Activities.** 

On November 5, 2025, the Company announced the launch of its Transformation 2.0: Powering Honest Growth ("Powering Honest Growth"), which was approved by the Company's Board of Directors on October 30, 2025, which builds upon the Company's original Transformation Pillars of Brand Maximization, Margin Enhancement and Operating Discipline. Powering Honest Growth is aimed at improving simplicity, focus and profitability, which includes exiting certain lower margin, non-strategic categories and channels, including exiting Honest.com fulfillment and apparel, as well as exiting retail and online stores in Canada, optimizing the Company's cost structure by rightsizing selling, general and administrative expenses and implementing supply chain efficiencies.

Powering Honest Growth is projected to result in the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Costs associated with Powering Honest Growth, including restructuring costs, are expected to be approximately $25.0 million to $35.0 million to be recognized through the first quarter of 2027, with no expense incurred during the three months ended September 30, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Restructuring costs related to exiting the Company's lower margin, non-strategic portfolios are expected to be approximately $15.0 million to $25.0 million and include employee-related costs, contract terminations, and other associated exit costs, including asset-related costs and expenses associated with optimizing the cost structure and supply chain, and will be reflected in restructuring on the condensed consolidated statements of comprehensive income (loss).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Powering Honest Growth is expected to result in annualized benefits in the range of $8.0 million to $15.0 million, and the Company expects to begin seeing benefits in 2026. These benefits include reduction in costs of revenue and reduction in operating expenses, offset by a decrease in revenue related to the exit of lower margin portfolios.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The cash impact of costs related to Powering Honest Growth is expected to be in the range of $15.0 million to $20.0 million for the full year 2026, with an immaterial amount expected to be paid during the three months ended December 31, 2025 and the remainder throughout 2026.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company expects the restructuring element of Powering Honest Growth to be substantially completed by December 31, 2026.

*The Company may incur other charges or cash expenditures not currently contemplated that may occur as a result of or in connection with Powering Honest Growth.* 

**Forward Looking Statements** 

This Current Report on Form 8-K contains forward-looking statements within the meaning of the federal securities laws including, without limitation, statements regarding the intended effect of Powering Honest Growth and the Company's expectations regarding the estimated costs, benefit, timing of such costs and benefit and timing of completion of Powering Honest Growth. All statements other than statements of historical fact could be deemed forward looking. These statements involve substantial risks and uncertainties that may cause the Company's actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements, including risks and uncertainties related to the Company's ability to forecast its future operating results and restructuring expenses, and ability to implement Powering Honest Growth within the expected timeframe. Further information on these and other factors that could cause the Company's financial results, performance, and achievements to differ materially from any results, performance, or achievements anticipated, expressed, or implied by these forward-looking statements is included in filings the Company makes with the Securities and Exchange Commission from time to time, including in the section titled "Risk Factors" in the Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission ("SEC") on February 26, 2025 and in the Company's Quarterly Reports on Form 10-Q and our future reports that we may file with the SEC from time to time. These documents are available on the SEC Filings section of the Investor Relations section of the Company's website at: https://investors.honest.com. Any forward-looking statements contained in this Current Report on Form 8-K are based on assumptions that the Company believes to be reasonable as of the date of this report. The Company undertakes no obligation to update any forward-looking statements made in this Current Report on Form 8-K to reflect events or circumstances after the date hereof or to reflect new information or the occurrence of unanticipated events, except as required by law.

------

**Item 9.01 Financial Statements and Exhibits.**

(d) Exhibits.

---

| | |
|:---|:---|
| **Exhibit**<br>**Number** | **Description** |
| <u>[99.1](honestcoq3-25exhibit991.htm)</u> | Earnings Press Release, dated November 5, 2025 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

------

**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.

---

| | | | |
|:---|:---|:---|:---|
| | | **The Honest Company, Inc.** | **The Honest Company, Inc.** |
| Date: | November 5, 2025 | By: | /s/ Curtiss Bruce |
|  |  |  | Name: Curtiss Bruce |
|  |  |  | Title: Executive Vice President, Chief Financial Officer |

---

## Exhibit 99.1

**Exhibit 99.1**

**The Honest Company Reports Third Quarter 2025 Results and Transformation 2.0: Powering Honest Growth** 

**Achieves Quarterly Revenue of $93 Million and Delivers Positive Net Income of $1 Million** 

**Announces Launch of Transformation 2.0: Powering Honest Growth, Simplifying Business Model to**

**Focus on Strategic Growth Areas and Exit Certain Lower Margin, Non-Strategic Categories and Channels**

**Updates Full Year 2025 Revenue and Adjusted EBITDA Outlook**

**LOS ANGELES, Calif. – November 5, 2025** – The Honest Company (NASDAQ: HNST), a personal care company dedicated to creating cleanly-formulated and sustainably-designed products, today reported financial results for the three and nine months ended September 30, 2025.

**Third Quarter 2025 Financial Highlights Compared to Prior Year Period:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**•** Revenue of $93 million decreased 6.7%; Organic Revenue<sup>(1)</sup> of $73 million decreased by 4.7%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Gross margin of 37.3% decreased 140 basis points

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Net income of approximately $1 million increased 3.6%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adjusted EBITDA<sup>(2)</sup> of $4 million decreased by $4 million, eighth consecutive quarter of positive Adjusted EBITDA

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Cash and cash equivalents of $71 million increased by $18 million

"While third quarter revenue was softer than anticipated, our team's disciplined execution delivered profitability improvement resulting in positive net income. In response to a challenging macroeconomic environment, our teams are acting decisively to strengthen performance across our portfolio. Our strategy remains focused on building a stronger and more scaled Honest brand, advancing operational efficiency and strengthening financial profitability," said Chief Executive Officer, Carla Vernón. "Today, we are announcing the launch of Transformation 2.0: Powering Honest Growth, a comprehensive two-part program that drives greater focus on our most strategic and profitable categories by exiting certain lower margin, non-strategic categories and channels while also optimizing our cost structure. We believe these actions will reduce complexity, drive sharper focus on our core product categories and strengthen our profitability. Through these actions, along with continued strong execution by our team and the enduring strength of the Honest brand, I remain confident in our ability to deliver beloved consumer products to our community and create long-term value for our shareholders."

**Transformation 2.0: Powering Honest Growth**

On November 5, 2025, the Company announced the launch of its Transformation 2.0: Powering Honest Growth (the "Powering Honest Growth"), which was approved by the Company's Board of Directors on October 30, 2025, which builds upon the Company's original Transformation Pillars of Brand Maximization, Margin Enhancement and Operating Discipline. Powering Honest Growth is aimed at improving simplicity, focus and profitability, which includes exiting certain lower margin, non-strategic categories and channels, including exiting Honest.com fulfillment and apparel, as well as exiting retail and online stores in Canada, optimizing the Company's cost structure by rightsizing selling, general and administrative expenses and implementing supply chain efficiencies.

The revenue for product categories or channels we are exiting accounted for 22% and 21%, respectively, of revenue for the three and nine months ended September 30, 2025. Refer to the Reconciliation of Revenue to Organic Revenue table below for additional information.

**Third Quarter Results**

***(All comparisons are versus the third quarter of 2024)***

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **For the three months ended September 30,** | **For the three months ended September 30,** | **For the three months ended September 30,** | **For the three months ended September 30,** | **For the three months ended September 30,** | **For the three months ended September 30,** |
| | **2025** | | **2024** | | **Change** | |
| *(In thousands, except percentages)* | *(In thousands, except percentages)* |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue | $92571 |  | $99237 |  | (6.7) | % |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Organic Revenue<sup>(1)</sup> | $72577 |  | $76146 |  | (4.7) | % |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross margin | 37.3 | % | 38.7 | % | (140) | bps |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating expenses | $34176 |  | $38339 |  | $(4163) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income | $758 |  | $165 |  | $593 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjusted EBITDA<sup>(2)</sup> | $3523 |  | $7079 |  | $(3556) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income margin | 0.8 | % | 0.2 | % | 60 | bps |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjusted EBITDA margin<sup>(2)</sup> | 3.8 | % | 7.1 | % | (330) | bps |

---

------

**Revenue** decreased 6.7% to $93 million compared to $99 million, driven by a decrease in retail revenue and Honest.com revenue, as we transition away from Honest.com as a fulfillment channel. The decrease in retail revenue was driven by a decrease in diaper revenue and baby apparel revenue, partially offset by an increase in wipes revenue.

**Organic Revenue**<sup>(1)</sup> decreased 4.7% to $73 million compared to $76 million. This represents the Company's net revenue excluding sales of Honest.com as a fulfillment center, apparel and Canada sales.

Tracked channel consumption<sup>(3)</sup> for the Company grew 2%, compared to the comparative categories, which were up 3% in the same period. Consumption<sup>(4)</sup> for the Company's products at the Company's largest customer increased 16%.

______________

(1) See the reconciliation of Organic Revenue, a non-GAAP financial measure to net revenue in the table under "Use of Non-GAAP Financial Measures" below in this press release.

(2) See the reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin, non-GAAP financial measures, to net income (loss) and net income (loss) margin in the table under "Use of Non-GAAP Financial Measures" below in this press release.

(3) According to Circana, Inc. MULO+ tracked channel consumption data. Reflects consumption for diapers, wipes, cosmetics, and baby and adult personal care for the latest 13 weeks ended October 5, 2025.

(4) According to Fuelcomm, Inc. ("Stackline") consumption data for the latest 13 weeks ended October 5, 2025.

**Gross margin** decreased 140 basis points to 37.3% compared to 38.7%. This decrease was primarily driven by a decline in sales volume and an increase in tariff costs, partially offset by a decrease in trade spend and favorable product mix.

**Operating expenses** decreased $4 million to $34 million compared to $38 million. Operating expenses as a percentage of revenue decreased 170 basis points. The improvement in operating expenses compared to prior year was primarily driven by a decrease in selling, general & administrative expenses, partially offset by an increase in marketing expenses.

**Net income** increased approximately $0.6 million to $0.8 million compared to net income of $0.2 million. This represents the Company's third consecutive quarter of positive net income.

**Adjusted EBITDA**<sup>(1)</sup> was $4 million compared to $7 million. This represents the Company's eighth consecutive quarter of positive Adjusted EBITDA.

_______________

(1) See the reconciliation of Adjusted EBITDA, non-GAAP financial measure, to net income (loss) in the table under "Use of Non-GAAP Financial Measures" below in this press release.

**Balance Sheet and Cash Flow** 

The Company ended the third quarter of 2025 with $71 million in cash and cash equivalents, an increase of $18 million compared to the third quarter of 2024. The Company had no debt on its balance sheet as of September 30, 2025.

Net cash used in operating activities was $4 million for the nine months ended September 30, 2025, compared to net cash provided by operating activities of $18 million in the prior year period.

------

**Updated Full Year 2025 Outlook** 

The Company is updating its financial outlook for the full fiscal year 2025 for revenue and Adjusted EBITDA in the table below. Our updated full year revenue outlook is now in the range of -3% to flat due to potential risks to revenue related to the wind down of strategic exits, declines in diaper revenue during the year and anticipated in the fourth quarter, and uncertainty in a dynamic macroeconomic environment. Our updated Adjusted EBITDA<sup>(2)</sup> outlook is now in the range of $21 to $23 million due to lower revenue than previously expected.

We are also providing an outlook for full year 2025 Organic Revenue<sup>(1)</sup> to reflect Organic Revenue growth of 4-6%, which excludes revenue from categories and channels we are exiting as part of Powering Honest Growth.

---

| | | |
|:---|:---|:---|
| **Full Year 2025** | **Full Year 2025** | **Full Year 2025** |
| | **Updated Outlook** | **Prior Outlook** |
| **Revenue** | -3% to flat | 4% to 6% |
| **Organic Revenue** <sup>(1)</sup> | 4% to 6% | N/A |
| **Adjusted EBITDA**<sup>(2)</sup> | $21 to $23 million | $27 to $30 million |

---

Our financial outlook reflects assumptions, including current tariff levels, which are subject to change given the macroeconomic environment. Please see our investor slides updated on our website at <u>https://investors.honest.com</u> for more information.

____________

(1) See the reconciliation of our outlook of 2025 Organic Revenue, a non-GAAP financial measure, to our outlook of 2025 revenue in the table under "Use of Non-GAAP Financial Measures" below in this press release. Represents the current outlook excluding (1) product revenue from our apparel line; (2) revenue from our Honest.com website as a fulfillment center; and (3) revenue from sales to Canadian retailers or channels.

(2) We do not provide guidance for the most directly comparable GAAP measure, net income (loss), and similarly cannot provide a reconciliation between our Adjusted EBITDA outlook and net income (loss) without unreasonable effort due to the unavailability of reliable estimates for certain components of net income (loss), including interest and other (income) expense, net, and the respective reconciliations. These items are not within our control and may vary greatly between periods and could significantly impact our financial results calculated in accordance with GAAP.

**Webcast and Conference Call Information**

A webcast and conference call to discuss third quarter 2025 results is scheduled for today, November 5, 2025, at 1:45 p.m. Pacific time/4:45 p.m. Eastern time. Those interested in participating in the conference call by phone, please go to this link https://register-conf.media-server.com/register/BI14bdf63d03ea42caa393b06b9f22f919 and you will be provided with dial in details. A live webcast of the conference call will be available online at: <u>https://investors.honest.com</u>. A replay of the webcast will be available on the Company's website for one year.

**Forward-Looking Statements** 

This press release and earnings call referencing this press release contain forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this press release are forward-looking statements. Such statements may address the Company's expectations regarding revenue, profit margin or other future financial performance and liquidity, other performance measures and cost savings, strategic initiatives and future operations or operating results. 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. These forward-looking statements include, but are not limited to, statements concerning our expectations regarding future results of operations and financial condition, including our revenue, Adjusted EBITDA and Organic Revenue outlook for 2025; our ability to continue to benefit from our Transformation Pillars of Brand Maximization, Margin Enhancement, and Operating Discipline; our ability to successfully implement, execute, and derive benefits from Powering Honest Growth program (as defined above); our expectations under and execution of our long-term financial algorithm and growth strategy; our ability to scale across our categories and grow the Honest Brand; our ability to navigate and manage the impact of evolving macroeconomic conditions and consumer demand or behaviors; our expectations on the impact of tariffs on our business; our ability to achieve or sustain profitability and continue generating positive cash flow; strength of the Honest brand; and our tariff mitigation strategy, our pricing, marketing, and distribution strategies, plans and objectives of management for future operations.

------

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this press release and the earnings call referencing this press release primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results.

The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled "Risk Factors" in the Annual Report, on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on February 26, 2025, our Quarterly Reports on Form 10-Q and subsequent filings with the Securities and Exchange Commission. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this press release or the earnings call referencing this press release. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that contain "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this press release. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this press release and the earnings call referencing this press release relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.

**About The Honest Company** 

The Honest Company (NASDAQ: HNST) 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. Founded 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. For more information about the Honest Standard and the Company, please visit www.honest.com.

**Investor Contacts:** 

Elizabeth Bouquard

ebouquard@thehonestcompany.com

**Investor Inquiries:**

investors@thehonestcompany.com

**Media Contact:** 

Brenna Israel Mast

bisrael@thehonestcompany.com

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**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 September 30,** | **For the three months ended September 30,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Revenue | $92571 | $99237 | $283280 | $278503 |
| Cost of revenue | 58082 | 60841 | 173369 | 172613 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 34489 | 38396 | 109911 | 105890 |
| Operating expenses |  |  |  |  |
| &nbsp;&nbsp;Selling, general and administrative | 17679 | 23427 | 59072 | 72277 |
| &nbsp;&nbsp;Marketing | 14796 | 13170 | 39617 | 33778 |
| &nbsp;&nbsp;Research and development | 1701 | 1742 | 5514 | 5137 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 34176 | 38339 | 104203 | 111192 |
| Operating income (loss) | 313 | 57 | 5708 | (5302) |
| Interest and other income (expense), net | 555 | 127 | 2370 | 44 |
| Income (loss) before provision for income taxes | 868 | 184 | 8078 | (5258) |
| Income tax provision | 110 | 19 | 195 | 56 |
| Net income (loss) | $758 | $165 | $7883 | $(5314) |
| Net income (loss) per share attributable to common stockholders: |  |  |  |  |
| &nbsp;&nbsp;Basic | $0.01 | $0.00 | $0.07 | $(0.05) |
| &nbsp;&nbsp;Diluted | $0.01 | $0.00 | $0.07 | $(0.05) |
| Weighted-average shares used in computing net income (loss) per share attributable to common stockholders: |  |  |  |  |
| &nbsp;&nbsp;Basic | 111839451 | 100690486 | 110802832 | 98688196 |
| &nbsp;&nbsp;Diluted | 113709908 | 104588417 | 114115977 | 98688196 |
| &nbsp;&nbsp;&nbsp;&nbsp;Comprehensive income (loss) | $758 | $165 | $7883 | $(5314) |

---

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**The Honest Company, Inc.**

**Condensed Consolidated Balance Sheets**

*(Unaudited)*

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

---

| | | |
|:---|:---|:---|
| | **September 30, 2025** | **September 30, 2024** |
| **Assets** | | |
| Current assets |  |  |
| &nbsp;&nbsp;Cash and cash equivalents | $71453 | $53441 |
| &nbsp;&nbsp;Accounts receivable, net | 43253 | 36176 |
| &nbsp;&nbsp;Inventories | 93853 | 74720 |
| &nbsp;&nbsp;Prepaid expenses and other current assets | 7599 | 8965 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 216158 | 173302 |
| Operating lease right-of-use asset | 12281 | 11781 |
| Property and equipment, net | 9331 | 18868 |
| Goodwill | 2230 | 2230 |
| Intangible assets, net | 181 | 253 |
| Other assets | 1358 | 2769 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets | $241539 | $209203 |
| **Liabilities and Stockholders' Equity** |  |  |
| Current liabilities |  |  |
| &nbsp;&nbsp;Accounts payable | $17717 | $24353 |
| &nbsp;&nbsp;Accrued expenses | 26231 | 33972 |
| &nbsp;&nbsp;Deferred revenue | 925 | 1650 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 44873 | 59975 |
| Long term liabilities |  |  |
| &nbsp;&nbsp;Operating lease liabilities, net of current portion | 6481 | 15360 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 51354 | 75335 |
| Commitments and contingencies |  |  |
| Stockholders' equity |  |  |
| &nbsp;&nbsp;Preferred stock, $0.0001 par value, 20,000,000 shares authorized at September 30, 2025 and 2024, none issued or outstanding as of September 30, 2025 and 2024 |  |  |
| &nbsp;&nbsp;Common stock, $0.0001 par value, 1,000,000,000 shares authorized at September 30, 2025 and 2024; 112,123,757 and 101,203,839 shares issued and outstanding as of September 30, 2025 and 2024 | 11 | 10 |
| &nbsp;&nbsp;Additional paid-in capital | 667484 | 618241 |
| &nbsp;&nbsp;Accumulated deficit | (477310) | (484383) |
| &nbsp;&nbsp;Accumulated other comprehensive loss |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 190185 | 133868 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $241539 | $209203 |

---

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**The Honest Company, Inc.**

**Condensed Consolidated Statements of Cash Flows** 

*(Unaudited)*

*(in thousands)*

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| | | |
|:---|:---|:---|
| | **For the nine months ended September 30,** | **For the nine months ended September 30,** |
| | **2025** | **2024** |
| **Cash flows from operating activities** |  |  |
| Net income (loss) | $7883 | $(5314) |
| Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: |  |  |
| &nbsp;&nbsp;Depreciation and amortization | 2180 | 2132 |
| &nbsp;&nbsp;Stock-based compensation | 7526 | 13593 |
| &nbsp;&nbsp;Amortization of operating ROU assets | 4957 | 4815 |
| &nbsp;&nbsp;Other | 2679 | 3329 |
| &nbsp;&nbsp;Changes in assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | 437 | 6621 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventories | (10828) | (2691) |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 2747 | (1143) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable, accrued expenses and other long-term liabilities | (15102) | 3637 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | (288) | (561) |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities | (6378) | (6052) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) provided by operating activities | (4187) | 18366 |
| **Cash flows from investing activities** |  |  |
| &nbsp;&nbsp;Purchases of property and equipment | (263) | (184) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (263) | (184) |
| **Cash flows from financing activities** |  |  |
| &nbsp;&nbsp;Proceeds from exercise of stock options | 384 | 2364 |
| &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 | 2432 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net (decrease) increase in cash and cash equivalents | (3982) | 20614 |
| **Cash and cash equivalents** |  |  |
| Beginning of the period | 75435 | 32827 |
| End of the period | $71453 | $53441 |

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**The Honest Company, Inc.**

**Use of Non-GAAP Financial Measures** 

We prepare and present our condensed consolidated financial statements in accordance with GAAP. However, management believes that Adjusted EBITDA, Adjusted EBITDA margin and Organic Revenue, which are non-GAAP financial measures, provide 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. We calculate Adjusted EBITDA margin by dividing Adjusted EBITDA by revenue.

We calculate Organic Revenue as net revenue, adjusted to exclude (1) product revenue from our apparel line; (2) revenue from our Honest.com website as a fulfillment center; (3) revenue from sales to Canadian retailers or channels and (4) in certain periods, revenue from other acquisitions, divestitures, product and or channel exits.

Adjusted EBITDA, Adjusted EBITDA margin and Organic Revenue are financial measures that are not required by, or presented in accordance with GAAP. We believe that Adjusted EBITDA, Adjusted EBITDA margin and Organic Revenue, 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, Adjusted EBITDA margin and Organic Revenue are helpful to our investors as they are measures 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. Additionally, we believe Organic Revenue is helpful to our investors as it adjusts for revenue sources that we are exiting in connection with the Transformation Initiative 2.0.

Adjusted EBITDA and Adjusted EBITDA margin are presented for supplemental informational purposes only, have limitations as analytical tools and should not be considered in isolation or as substitutes for financial information presented in accordance with GAAP. Some of the limitations of Adjusted EBITDA and Adjusted EBITDA margin include that (1) they do 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 and Adjusted EBITDA margin do not reflect these capital expenditures; (3) they do not consider the impact of stock-based compensation expense; (4) they do not reflect other non-operating expenses, including interest expense; (5) they do not reflect tax payments that may represent a reduction in cash available to us; and (6) they do 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, Adjusted EBITDA margin and Organic Revenue may not be comparable to similarly titled measures of other companies because they may not calculate Adjusted EBITDA, Adjusted EBITDA margin and Organic Revenue in the same manner, limiting their usefulness as comparative measures. Because of these limitations, when evaluating our performance, you should consider Adjusted EBITDA, Adjusted EBITDA margin and Organic Revenue 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) and net income (loss) margin, the most directly comparable financial measures stated in accordance with GAAP, to Adjusted EBITDA and Adjusted EBITDA margin, for each of the periods presented:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended September 30,** | **For the three months ended September 30,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** |
| *(In thousands)* | **2025** | **2024** | **2025** | **2024** |
| **Reconciliation of Net Income (Loss) to Adjusted EBITDA** |  |  |  |  |
| &nbsp;&nbsp;Net income (loss) | $758 | $165 | $7883 | $(5314) |
| &nbsp;&nbsp;Interest and other (income) expense, net | (555) | (127) | (2370) | (44) |
| &nbsp;&nbsp;Income tax provision | 110 | 19 | 195 | 56 |
| &nbsp;&nbsp;Depreciation and amortization | 722 | 706 | 2180 | 2132 |
| &nbsp;&nbsp;Stock-based compensation | 2399 | 2166 | 7526 | 13593 |
| &nbsp;&nbsp;Securities litigation expense | 45 | 4089 | 1203 | 5759 |
| &nbsp;&nbsp;Executive officer transition expense<sup>(1)</sup> |  |  | 1066 | 858 |
| &nbsp;&nbsp;Payroll tax expense related to stock-based compensation | 44 | 61 | 385 | 277 |
| Adjusted EBITDA | $3523 | $7079 | $18068 | $17317 |
| Revenue | $92571 | $99237 | $283280 | $278503 |
| Net income (loss) margin | 0.8% | 0.2% | 2.8% | (1.9)% |
| Adjusted EBITDA margin | 3.8% | 7.1% | 6.4% | 6.2% |

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(1) For the nine months ended September 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. For the nine months ended September 30, 2025, this includes separation, bonus and recruiting costs related to our Chief Financial Officer transition.

The following table presents a reconciliation of revenue, the most directly comparable financial measure stated in accordance with GAAP, to Organic Revenue, for each of the periods presented:

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **For the three months ended September 30,** | **For the three months ended September 30,** | **For the three months ended September 30,** | **For the three months ended September 30,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** |
| *(In thousands)* | **2025** | **2025** | **2024** | **2024** | **2025** | **2025** | **2024** | **2024** |
| **Reconciliation of Revenue to Organic Revenue** | **Reconciliation of Revenue to Organic Revenue** | **Reconciliation of Revenue to Organic Revenue** | **Reconciliation of Revenue to Organic Revenue** |  |  |  |  |  |
| &nbsp;&nbsp;Revenue | $92571 |  | $99237 |  | $283280 |  | $278503 |  |
| &nbsp;&nbsp;Less revenue from: |  | %<sup>(1)</sup> |  | %<sup>(1)</sup> |  | %<sup>(1)</sup> |  | %<sup>(1)</sup> |
| &nbsp;&nbsp;&nbsp;&nbsp;Apparel | (10397) | (11)% | (11294) | (11)% | (28682) | (10)% | (29626) | (11)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Honest.com | (8845) | (10)% | (11512) | (12)% | (28979) | (10)% | (36985) | (13)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Canada | (752) | (1)% | (285) | —% | (1860) | (1)% | (1330) | —% |
| Organic Revenue | $72577 | (22)% | $76146 | (23)% | $223759 | (21)% | $210562 | (24)% |

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(1) Represents revenue as a percentage of total revenue.

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The following table presents a reconciliation of revenue, the most directly comparable financial measure stated in accordance with GAAP, to Organic Revenue, for the full year 2025:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Full Year 2025** | **Full Year 2025** | **Full Year 2025** | **Full Year 2025** |
| **Reconciliation of Revenue to Organic Revenue Outlook** | **<br>Low End of Outlook Range** | **<br>Low End of Outlook Range** | **<br>High End of Outlook Range** | **<br>High End of Outlook Range** |
| *(In millions, except percentages)* |  |  |  |  |
| &nbsp;&nbsp;Revenue | $367 | (3)% | $378 | 0% |
| &nbsp;&nbsp;Adjustments from: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Category and channel exits | (75) | 7% | (80) | 6% |
| Organic Revenue | $292 | 4% | $298 | 6% |

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