The Honest Company reported fourth‑quarter 2025 revenue of $88.04 million, a 11.8% decline from the $100 million reported in Q4 2024. The company posted a GAAP loss of $0.21 per share, missing the consensus estimate of $0.02. The loss reflects a combination of lower diaper sales, the impact of strategic exits under the Powering Honest Growth initiative, and one‑time transformation charges.
Adjusted gross margin rose to 38.3% from 37.8% in the prior year, driven by a favorable product mix that increased the share of higher‑margin wipes and personal‑care items. Adjusted EBITDA fell to $3.8 million from $8.5 million in Q4 2024, largely due to the reduction in revenue and the cost of restructuring activities.
Diaper sales declined sharply, contributing to the revenue drop, while wipes and baby personal‑care categories grew, offsetting part of the loss. The company’s focus on core high‑margin products is a key element of the Powering Honest Growth strategy.
The company ended the quarter with $89.6 million in cash and no debt, giving it a strong liquidity position to fund ongoing transformation and future growth initiatives.
For full‑year 2025, the company expects revenue of $371.3 million, a 1.9% decline from the $378 million reported in 2024. Guidance for 2026 projects reported revenue to decline 16% to 18% to $306 million to $312 million, while organic revenue is expected to grow 4% to 6%. Adjusted gross margin is projected to be in the low 40% range and adjusted EBITDA between $20 million and $23 million, reflecting confidence in margin expansion as the company completes its strategic exits.
CEO Carla Vernon said the company is entering 2026 as a more focused and agile organization, emphasizing the importance of the Powering Honest Growth initiative in driving future profitability.
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