Good afternoon, and thank you for standing by. Welcome to Grove Collaborative Holdings, Inc.'s Second Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. Hosting today's call are Grove's CEO, Jeff Yurcisin; and Interim CFO, Tom Siragusa. Some of the statements made today about future prospects, financial results, business strategies, industry trends and Grove's ability to successfully respond to business risks may be considered forward-looking, including statements relating to profitable growth leading to multiple expansion and market capitalization appreciation, plans to engage with shareholders and the subject of that engagement, continued sequential revenue growth in the second half of 2025, year-over-year revenue growth in the fourth quarter of 2025. The first quarter of 2025 being the lowest revenue quarter going forward, 2025 revenue declining approximately mid-single-digit to low double-digit percentage points year-over-year and adjusted EBITDA in the negative low single-digit millions to breakeven. Such statements are based on current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially, including those risks discussed in Grove's filings with the Securities and Exchange Commission. All of these statements are based on Grove's views today, and Grove assumes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. During today's call, Grove will discuss certain non-GAAP financial measures, which adjust GAAP results to eliminate the impact of certain items. You will find additional information regarding these non-GAAP financial measures and a reconciliation of these non- GAAP items to the most directly comparable GAAP financial measures in Grove's earnings release, which is also available on Grove's Investor Relations website. I would now like to turn the call over to Jeff Yurcisin to begin.

Thank you, operator. Good afternoon, everyone, and thank you for joining us today. I'd like to begin today by addressing the 13D filing by HumanCo with a letter to our Board of Directors. Grove's Board and leadership team value constructive engagement from all shareholders and appreciate HumanCo's continued support of our mission and long-term vision. We share HumanCo's view that Grove is significantly undervalued in the public markets and that our brand, platform and customer relationships represent strategic assets that would be extremely difficult to replicate. As folks who have followed the Grove story are aware, we've had a long and collaborative relationship with HumanCo. After evaluation of their letter, we have agreed to set up a working group to continue collaboration on identifying and pursuing avenues to unlock greater value through strategic and operational initiatives. The working group will be made up of Ross Berman and Jason Karp from HumanCo, and Stuart Landesberg, Larry Cheng and me from Grove's Board of Directors. And we will meet periodically to develop recommendations to the full Grove Board on opportunities to drive value creation for Grove stockholders. We look forward to this next chapter of collaboration with HumanCo to further our shared vision of building the leading marketplace for curated, clean, sustainable products. At Grove, we believe that DTC companies that will thrive in the future must have a clear differentiated value proposition from Amazon. Competitive moats and a defined unique customer segment that can be reached directly with an offering that resonates with them deeply. Today's consumer is navigating a fragmented landscape of choices with limited transparency and growing concerns around ingredient safety, product standards and environmental impact. Our mission is to make that journey easier by building a destination that consumers can trust to deliver products that align with their…

Thank you, Jeff, and welcome, everyone. This past quarter continued to test our operational resilience, but it also reaffirmed that the discipline we put in place is working. While we are still managing through near-term disruptions, we remain focused on execution and efficiency. Our ability to deliver positive cash flow, maintain healthy gross margins and improve sequential top line results reflects the progress we're making and the foundation we're building for long-term financial performance. I'll now go deeper on the second quarter. Starting at the top line. Revenue for the second quarter was $44 million, down 15.5% year- over-year, but up 1.1% or $0.5 million sequentially. The year-over-year decline was impacted by the effect of reduced advertising spend in 2024 and prior years, resulting in fewer new and repeat customers as well as the eCommerce platform migration. The sequential growth is due to an increase in total orders offset by lower net revenue per order. It is a modest step forward, but an important one as we work to rebuild our top line trajectory. Total orders for the quarter were 640,000, a decline of 12.6% year-over-year, but an increase of 3.4% compared to the first quarter. Active customers ended the quarter at 664,000, down 10.9% compared to the prior year and 2.2% compared to the first quarter. On a year-over-year basis, these declines are consistent with what we've shared previously. Reduced advertising in 2024 and prior periods continues to impact our active user base and orders. That said, we're encouraged by our modest sequential increase in orders. These results signal that our longer-term strategy is beginning to take hold. DTC net revenue per order was $65.22, down 3.7% versus last year. This decrease was driven by a temporary increase in low-value shipments and the removal of select customer fees, which…

Thank you, Tom. For the past several quarters, we've spoken candidly about the work required to transform growth. And while the path has taken longer than initially planned, our team remains deeply focused on building a stronger, more resilient business. With our revenue trough now expected to be behind us in Q1, we are encouraged by the steady improvements in the second quarter and expect to grow revenue sequentially in the back of the year, leading to slight year-over-year growth in the fourth quarter. As one of the earliest retailers solely focused on curating healthier, more sustainable products for every room in the home, Grove is uniquely positioned in a market that continues to move in our direction. Consumers are increasingly demanding safer ingredients, smarter packaging and more transparency. And we build our business to meet those demands while also serving conscientious consumers' needs. The opportunity ahead of us is significant, and our conviction in our mission, our model and our strategy has never been stronger. With that, we're happy to answer any questions you have. Operator, please open the line for questions.

[Operator Instructions] Our first question comes from Susan Anderson of Canaccord.

Nice job on the quarter. I guess maybe just to start out, if you could maybe give some color around just the lower revenue per order that you're seeing. I guess, are consumers maybe picking and choosing a little bit more and ordering a little bit less as they kind of cut back? Or do you think they're just kind of ordering more -- just not ordering as much all at once?

Great question, Susan. Thank you. At the core, a lot of this ties to our platform migration. We discussed it in our last call, and it continued to impact us through Q2. And towards the end of Q2, we found new ways to engage previous subscribers, particularly 2 different types of cohorts of subscribers. One, those subscribers that had a very long list of subscriptions. As we migrated to this new platform, we had to build something a little more specialized for them, and we feel confident in that experience going forward. The second area was actually for some of the customers who were only having a handful of subscriptions and sometimes shipping smaller orders. And so when you look at the weighted average, what energizes us going about where we're positioned and where we're going forward is we're seeing internal metrics showing the right type of improvement on that. And we know at the core, we have fixed the core customer experience. Again, the revenue drop in Q2 compared to our previous forecast was 100% driven by this platform migration and it impacted AOV in particular.

Okay. Great. And then you talked about increased marketing. I guess, have you been seeing returns on the current marketing that you're doing and really helping to drive sales, which gives you confidence to increase that marketing? And then I guess, as we look out the rest of the year and looking towards that fourth quarter and potentially seeing revenue up year-over-year, I guess, what do you think the drivers are to getting to that level of revenue?

Okay. I love it. I'm going to split this into 2 parts. In terms of the first part, I think I hope that for those investors who are listening, they have seen our very disciplined approach in the last 7, 8 quarters when it comes to marketing spend. And so as we increase our marketing spend year-over-year, inherent in that is we are seeing the right type of paybacks unlike what we have seen before. If we were contrasting our kind of paybacks from a pre-platform migration to post-platform migration, we have confidence that we've got a business that can scale because of some of the metrics that we are seeing when it comes to repeat rates and LTV, and LTV to CAC type of ratio. Secondly, you were like, Jeff, what about the back half of the year in Q4? What are the real drivers to that? In that question, I think there are a few elements. We've spoken in the past how we know that whenever these really large expenditures in marketing, you hit some asymptote about 8 quarters out where you are not lapping the heavy marketing spend. So some of this is just the natural trend that we're seeing in our cohorts. But on top of that is we've fundamentally built a different customer experience, one that isn't just on a new platform, but one that allows any customer to purchase, that has subscribe and save and has incentives for customers to build boxes. And so when you think about what the inputs were to do that at the core, it is about a great customer experience, which, by the way, we have a lot to improve on because this platform migration did have its hiccups, and we're still working rapidly to improve our mobile experience on the app and working rapidly to improve our experience with subscriptions in the cart. But given all of this, we still have been fundamentally changing the customer experience, by improving the selection, by keeping a very high bar, adding more SKUs and more categories, giving customers more reasons to shop, more reasons to come back and more reasons to add to their cart. So revenue is going to be driven because partly of our comps and also because of the change in the customer experience, which is leading to the right type of repeat rates, the accelerated marketing and the overall payback that we're seeing.

Okay. Great. That's really helpful. And then last one for me, maybe if you could talk about where you're at in terms of adding new categories to the site. I guess, do you think there's still opportunity to expand the offering into other areas? And then I don't know if you can give some color maybe on kind of what percent of sales are cleaning versus personal care versus other categories you're offering on the site?

That's great. We have not been disclosing the kind of category-by-category breakdown. However, I will just say that we have been moving away from cleaning. That was our foundation, and we are finding more and more customers interested in personal care, vitamins, minerals and supplements and clean beauty, all of these areas, we are seeing customers ask for us to curate high standard products and brands. Now again, we continue to see strong growth in VMS, but this remains our #1 strategic push this year. It is into human health and wellness. Now that may be a bamboo care way cutting board or it may be a clean beauty lotion and product or it could be vitamins, minerals and supplements, but we are pushing as aggressively as possible and putting all of our resources into building the right experience for customers who trust us when it comes to the environment and our strong position on plastic and microplastics, where we truly are the world leader and then using that as a way to give them similar options on the human health side.

Ladies and gentlemen, we have reached the end of the question-and-answer session. I will now hand over for closing comments.

Thank you very much for those of you who joined us, and hope you have a great evening, and we look forward to the second half of the year. Thank you.

Thank you, sir. Ladies and gentlemen, that concludes today's event. Thank you for attending, and you may now disconnect your lines.