Loading...
•
Sep 30
Honest Co Q3 2025 Earnings Report
Honest Co Q3 2025 Earnings Report
Key Takeaways
The Honest Company reported third-quarter 2025 revenue of $93 million, a 6.7% decrease year-over-year, but achieved positive net income of $0.8 million, marking its third consecutive quarter of profitability. The company also announced 'Transformation 2.0: Powering Honest Growth' to streamline its business by exiting lower-margin categories and channels.
Revenue for Q3 2025 was $93 million, a 6.7% decrease compared to the prior year period.
Net income for Q3 2025 was $0.8 million, an increase of $0.6 million from the prior year, marking the third consecutive quarter of positive net income.
Adjusted EBITDA for Q3 2025 was $4 million, a decrease of $4 million from the prior year, but represents the eighth consecutive quarter of positive Adjusted EBITDA.
The company launched 'Transformation 2.0: Powering Honest Growth' to focus on strategic growth areas and exit certain lower-margin, non-strategic categories and channels, which accounted for 22% of Q3 2025 revenue.
Honest Co
Honest Co
Honest Co Revenue by Segment
Honest Co Revenue by Geographic Location
Revenue by Segment
Apparel Revenue
CapyFin.comRevenue by Geographic Location
Honest.com Revenue
CapyFin.comCanada Revenue
CapyFin.com Forward Guidance
The Honest Company updated its full-year 2025 financial outlook, anticipating revenue in the range of -3% to flat and Adjusted EBITDA between $21 million and $23 million. The company also provided an outlook for full-year 2025 Organic Revenue growth of 4-6%.
Positive Outlook
- Organic Revenue is projected to grow by 4-6% for the full year 2025, indicating growth in core strategic areas.
- The 'Transformation 2.0: Powering Honest Growth' program is expected to drive greater focus on strategic and profitable categories, reduce complexity, and strengthen profitability.
- The company aims to optimize its cost structure by rightsizing selling, general and administrative expenses and implementing supply chain efficiencies.
- Continued strong execution by the team and the enduring strength of the Honest brand are expected to deliver beloved consumer products and create long-term shareholder value.
- The company ended Q3 2025 with $71 million in cash and cash equivalents and no debt, providing financial flexibility.
Challenges Ahead
- Full-year 2025 revenue outlook was updated to a range of -3% to flat, a decrease from the prior outlook of 4% to 6%.
- The updated revenue outlook is due to potential risks related to the wind down of strategic exits, declines in diaper revenue, and uncertainty in a dynamic macroeconomic environment.
- Adjusted EBITDA outlook for full-year 2025 was lowered to $21-$23 million from the prior outlook of $27-$30 million, primarily due to lower expected revenue.
- The company is exiting certain lower margin, non-strategic categories and channels, including Honest.com fulfillment, apparel, and retail/online stores in Canada, which accounted for 22% of Q3 2025 revenue.
- The financial outlook reflects assumptions, including current tariff levels, which are subject to change given the macroeconomic environment.