The Honest Company (HNST) Q4 2024 earnings summary

Executive summary

• Achieved record annual revenue of $378 million in 2024, up 10% year-over-year, and record gross margin of 38%.

• Delivered first full year of positive adjusted EBITDA as a public company, exceeding guidance.

• Q4 revenue reached $100 million, up 11% year-over-year, with strong performance in baby apparel and wipes.

• Net loss narrowed to $6 million for the year, a $33 million improvement over the prior year.

• Transformation Pillars—Brand Maximization, Margin Enhancement, and Operating Discipline—drove results.

Financial highlights

• Full-year 2024 revenue: $378 million (+10% YoY); Q4 revenue: $100 million (+11% YoY).

• Gross margin expanded 900 basis points to 38% for the year; Q4 gross margin was 39%, up 530 basis points.

• Adjusted EBITDA for 2024: $26 million (margin 6.8%), up from negative 3.3% in 2023.

• Ended year with $75 million in cash and zero debt; free cash flow of $1 million for 2024.

• Q4 net loss of $0.8 million vs. net income of $1.1 million last year; full-year net loss of $6.1 million vs. $39.2 million loss prior year.

Outlook and guidance

• 2025 revenue growth expected at 4%-6% year-over-year.

• Adjusted EBITDA guidance for 2025: $27 million-$30 million.

• Gross margin expected to remain in the 38%-39% range, with potential for further expansion.

• Q1 2025 revenue growth anticipated to be above full-year guidance due to easier comps.

• Outlook incorporates known tariffs related to product sourcing in China and Mexico.