The Honest Company, Inc. · NASDAQ:HNST
The Honest — Investor Presentation (2025)
30 slides from The Honest's investor presentation, 2025
Slide 1: Investor Strategic Update 2025
Investor Strategic Update 2025
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains certain forward-looking statements within the meaning Market data and industry information used through this presentation are based on of the federal securities laws, including statements about the outlook of our management's knowledge of the ind
Slide 3: A modern CPG company poised for growth
A modern CPG company poised for growth Strengthened Modern brand Dynamic Scalable growth financial leadership and foundation culture 2
Slide 4: Our story
Our story • Launched in 2012 with the goal to create a new personal care company with clean ingredients and sustainability at its core • The portfolio resonated with a new generation of families 3
Slide 5: Our story: mission
Our story The Honest Company is a personal care company on a mission to challenge ingredients, ideals and industries so people can protect who they love. 4
Slide 6: A higher standard of Clean that we call The Honest Standard
Our story A higher standard of Clean that we call The Honest Standard Number of ingredients not permitted in products 3,500+ 1 Clean ingredients • No parabens We ban 3,500+ ingredients • No sulfates • No phthalates • No synthetic fragrances ~2,000 2 In-house labs • No petro-derived emollients • No P
Slide 7: Our portfolio
Our portfolio Honest baby wipes, baby #1 personal care, and apparel all growing share2 natural brand in baby personal #1 care1 7% climate-pledge friendly #1 household penetration mascara on Amazon4 natural brand in baby wipes6 +20% Oprah’s Favorite Things5: Since 20213 “Fam Jams” 4 years in a row So
Slide 8: Strengthened financial foundation
Strengthened financial foundation 7
Slide 9: Honest is on a transformation journey focused on three Pillars
Strengthened financial foundation Honest is on a transformation journey focused on three Pillars: 2023 2024 – 2025 2026+ Transform Strengthen Grow & Scale Brand Maximization – leverage brand to drive growth through innovation & improved marketing Margin Enhancement – expand margins through mix and c
Slide 10: Transformation Pillars delivering strong results
Strengthened financial foundation Transformation Pillars delivering strong results Brand Maximization Margin Enhancement Operating Discipline +10% +900 bps $75M Cash $0 Debt 1 YoY revenue growth1 YoY gross margin1 7% +$37M High-performing practices from leading Household penetration2 YoY Adj. EBITDA
Slide 11: Sequential gross margin improvement through 2024
Strengthened financial foundation Sequential gross margin improvement through 2024 Quarterly Gross Margin (%) 38.3% 38.7% 38.8% 37.0% 33.5% 31.6% 27.1% 24.2% Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Source: Company Financials: 10-Q and 10-K 10
Slide 12: Achieved Adj. EBITDA profitability
Strengthened financial foundation Achieved Adj. EBITDA profitability Quarterly Adj. EBITDA ($ in M) First full year of positive Adj. EBITDA as a public company $7.6 $8.5 $7.1 $4.3 $2.6 ($1.1) ($4.1) ($10.3) Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Source: Company Financials: 1
Slide 13: Improved cash position
Strengthened financial foundation Improved cash position Quarterly Cash Balance ($ in M) $75 $53 $34 $37 $33 $23 $18 $9 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Source: Company Financials: 10-Q and 10-K 12
Slide 14: 2024 financial summary
Strengthened financial foundation 2024 financial summary Q4 2024 Results FY 2024 Results Revenue +11% vs. LY +10% vs. LY Gross Margin % +530 bps vs. LY +900 bps vs. LY Adj. EBITDA +$4M vs. LY +$37M vs. LY Debt $0 $0 Source: 2024 Full Year Company Financials & 10-K 13
Slide 15: Modern brand
Modern brand @) HONEST
Slide 16: Consumers have new needs
Modern brand Children (0-17) with a skin allergy the Consumers have past 12 months over 3 year period1 (%) new needs 12% 10% 8% • Growing focus on ingredients and safety 6% 1997- 2000- 2003- 2006- 2009- 2012- 2015- 2018 1999 2002 2005 2008 2011 2014 2017 o Skin allergies among children have nearly d
Slide 17: Single powerful brand across aisles
Modern brand Single powerful brand across aisles Conventional CPGs Honest is a Branded House Many Brands • Multiple Categories One Brand • Many Categories Category Category Category Category Category Category Category 1 2 3 4 5 6 7 Brand Brand Brand Brand Brand Brand Brand A B C D E F G Baby Persona
Slide 18: Revolutionized Baby Care
Modern brand Revolutionized Baby Care Brought modern Launched organic Created baby spa Baby gifting Online designs to diaper apparel to match moments community category diapers 17
Slide 19: Scalable growth
Scalable growth @) HONEST
Slide 20: Distribution expansion a focal point of growth
Scalable growth Distribution expansion a focal point of growth 1 Increasing Total Distribution Points reflects the most significant growth opportunity 2 Distribution remains underpenetrated relative to competition 3 Innovation supports our objective of increased availability 19
Slide 21: Widely available with room to grow
Scalable growth Widely available with room to grow Our retail partners today Multiple levels of opportunity .com Stores Doors Aisles Shelves Facings Innovation 20 20
Slide 22: Large runway for growth into more doors
Scalable growth | Doors Large runway for growth into more doors 2024 year-end total doors selling Year-end doors selling Remaining doors available Honest ~45,000 ~65,000 Leading Competitor ~90,000 ~20,000 Source: Circana MULO data, last 13 weeks ending 01/05/25 21
Slide 23: Hero products under-distributed
Scalable growth | Facings Hero products under-distributed Max ACV % by SKU 88 87 Honest 82 Key Competitor 52 33 34 19 10 Hydrogel Diapers 288 Ct. Lavender Cream Size 1 Wipes Bubble Club Box Bath Source: Circana MULO data, last 13 weeks ending 01/05/25 22
Slide 24: Opportunity for larger presence on shelf
Scalable growth | Facings Opportunity for larger presence on shelf Average products on shelf per store selling Honest 62 Key Competitor 33 14 11 7 4 Diapers Wipes Facial Skincare Source: Circana MULO data, last 13 weeks ending 01/05/25 23
Slide 25: The right leaders for the mission
Dynamic leadership & culture The right leaders for the mission Carla Vernón Chief Executive Officer Dave Loretta Chief Financial Officer Broadly experienced leadership team: 24
Slide 26: 2025 and long-term outlook
2025 and long-term outlook 25
Slide 27: 2025 Financial Outlook
2025 Financial Outlook 2025 Outlook Long-Term Algorithm Revenue Growth 4% - 6% 4% - 6% annually $27 million - $30 million Continued Adj. EBITDA Adjusted EBITDA range margin expansion Source: Company Financials: 8-K 26
Slide 28: Reasons to invest
Long-term outlook Reasons to invest Business model transformed for profitability Leadership team with broad CPG industry expertise Strong runway for growth Growing consumer need, large market potential Vibrant brand built for today’s family needs Proven success in omnichannel 27
Slide 29: Appendix
Appendix @ HONEST
Slide 30: Reconciliation of GAAP and Non-GAAP Financial Measures
Appendix Reconciliation of GAAP and Non-GAAP Financial Measures Adjusted EBITDA ($ millions) Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 FY 2024 Net income (loss) ($18.9) ($13.4) ($8.1) $1.1 ($39.2) ($1.4) ($4.1) $0.2 ($0.8) ($6.1) Interest and other (income) 0.2 0.0 0.1