Grove Collaborative Holdings, Inc. Emerging Growth Conference 97

Thank you very much. Appreciate the time, and to my audience, I promise the 10 minutes are going to be worth it. I want to walk through why D2C is not dead, why Amazon has a vulnerable front, and how a small cap like Grove can really matter in the lives of their customers. Let us jump in. First, of course, the non-GAAP forward-looking statements and non-GAAP measures. You guys have seen this, I imagine, on all the slides today. First, I want to tell you a little bit about myself. I came to Grove a little over three years ago knowing that it was a bit of a turnaround, but it was an opportunity that I felt like has a chance to be a billion-dollar business and a public company that could be a 5 to 10x type of improvement. Why do I believe that?

Because I have done this before. This is the third time I have replaced a founder. The first time was at Shopbop, a fashion marketplace. We took from $100 million to about $1 billion. The second was Zulily, which was a billion-dollar marketplace serving moms who were trying to stretch their wallet. What I loved about Grove, what made it unique. Now, remember, most investors think, "Hey, D2C is dead." I have heard that too many times. Here is why Grove has a real reason to thrive, to grow, and to exist. First, we have a real customer base, a true customer love, and we have acquired over 5 million customers since our very beginning. Second, I think we have a moat compared to Amazon, and this is why investors are scared from D2C, because Amazon is so dominant. I actually worked at Amazon for over a decade.

Andy Jassy was my first mentor, so I get why Amazon can thrive. For Grove, it is about trust and it is about curation, and that is a vulnerable flank from Amazon. Next, you have to have the economics. The reality is, it is really costly to try to ship small items in e-commerce in a consumables business. That is what we are able to do more efficiently than almost anyone in the space because we put so many items into a box. We estimate that our fulfillment costs are about half of that on a unit basis compared to Amazon. With that, let us jump in. This is why D2C fell out of favor. Amazon was superior to most, made speed and price table stakes, took margin out.

A lot of the FBA sellers are Chinese-based sellers that put their products at original manufacturers, like it is the factories who are then putting their products into Amazon's North American-based warehouses. That undercut a lot of U.S. brands, and then growth got really expensive with the rollout of the privacy changes in 2021 with Apple that made a lot of CACs and customer acquisition costs go up substantially. This is how and why we have made it through. First, it really is about trust. This survey was to 1,000 of our customers, 1,010, and we asked them: Who do you trust to curate and sell safe, healthy products? 94% of them strongly or just trusted Grove more than Amazon, and actually zero trusted Amazon. When you think about it in a customer's words, here it is.

I am actively trying to reduce how much I buy from Amazon, and Grove is one of those companies I would much rather support." This is a common theme that we see. I am bringing up Amazon, not just because I went there, but you have to have some sort of zigzag type of strategy, and we believe we have it, and it is based on trust and curation and a very high ingredient standard. When you work backwards from a customer, this is what families are asking. Is this safe for my kids? The reality is when you get into the data, 90% of Americans are really concerned about microplastics. 72% of parents rank safe ingredients as a critically important factor in buying products. The reality is, what we are seeing is plastic is, we have been told a lie about plastic for maybe a generation. It is not inherently recyclable.

It just breaks down into microplastics. Those microplastics increasingly are found in our bodies and our arteries and breast milk and blood in newborn babies, and about 0.5% of your brain and my brain is filled with plastic. It is kind of crazy. The reality is, what we have is the highest ingredient standard in the space. We ban over 2,000 ingredients. We make sure whether it is bisphenols or PFAS or phthalates, all banned. Our journey has gone from being the place that was really good for the planet, human and environmental health was always our focus, but we put an exclamation mark on the environmental health, to now putting the exclamation mark on the people, on your family. We are trying to enable you to have a healthier home for the people you love. This is why we believe that there is a real space to do that.

Trust is the differentiator and the foundation, and we have the economics to make it happen. How do we pull that off? Why do customers actually trust us? Because every product we sell is screened against these thousands of banned chemicals. It is kind of crazy the type of chemicals that we put into our bodies, and there is a movement, actually, it crosses political spectrum, MAHA on the right and also on the left, and it is homeschoolers, and it is those that are against vaccines. It is everyone in between. It is a mom who is just trying to figure out, how do I keep my home safe for my kids? Grove, from our point of view, has the highest ingredient standards of anyone we know in this space. Over 2,000 products banned. We screen, we re-screen, and with that, we have built this trust with customers.

Who is this customer base? We acquired 5 million customers over the years. Keep in mind, we were once a unicorn, then went public via SPAC. Now we've been in this small cap jail trying to figure out how to sustain profitability. We're there now. Take a look. The customer that we acquired is this phenomenal asset. Yes, we acquired over 5 million. The reality is we have hundreds of thousands that are active, that are on our site, in our app on a very regular basis. 72% have children at home. It is a great high-income demographic, and the reality is they are coming back to Grove and loyal to Grove. This goes back to the trust.

I once had a mentor say, "Hey, what retailers and brands need to do is matter in the lives of their customers." In that same survey of 1,010 customers, more than 9 out of 10 would be incredibly disappointed if Grove didn't exist. We're not a normal retailer. We have passionate customer love from a few that I believe that TAM will increase going forward. How did we get here? Why do we even have this chance? Why are we a small cap? Let's talk about it. Take a look at my board. Phenomenal leadership. We've got the founder of Seventh Generation, former CEO of Burt's Bees, founder of Volition Capital, who's on the board of GameStop. We've got one after another talented board members, and I built a good team. How are we doing this? What did we have to do?

In the 3 years before I joined, our EBITDA losses averaged around $100 million. Revenue peaked out a little bit less than $400 million. We had to turn it around. Take a look at where we are now. 3 straight quarters of positive adjusted EBITDA. We continue to reduce operating expenses. We are trying to prove that with sequential growth in 2026, it lays the groundwork for kind of expansion into the future, and this is why we're really energized. We're still sitting on $11 million in cash and have the ability to accelerate it. Look, I think we're positioned to be this store that wins on trust. Highest ingredient standards, a science board, a chief medical officer, and customers who have come to depend and trust us on doing the work for them. Reading the label so that they don't have to.

They just go to Grove and they're like, "Hey, what are the best kind of laundry detergent, soaps, bamboo toilet paper, rather than bleached wood paper on your butt?" All of those are the things that this customer cares about. We've got this Grove standard, which is visible on every product page. We've got this great Grove brand, both in our own brand that has great gross margins. We had Q2 sequential growth, positive adjusted EBITDA. Cash has been steady. You can look at this. Now the focus is on growth, and with this push to human health, you're going to be hearing this more and more, especially towards the end of the year and the beginning of 2027. With that, I'm open to any questions, but I'm excited to just introduce us to you. I hope that you make note.

I hope you start following us, and I hope you time these investments well, because we're excited about where we're going.