Q2 2023 Grove Collaborative Holdings Inc Earnings Call
Speaker 1: I.
Speaker 2: Good afternoon, and thank you for standing by. Welcome to Grove Collaborative Holding INKS, second quarter 2023 earnings conference call. At this time, all lines have been placed on mute to prevent any background noise.
Speaker 2: Following the speakers or marks, you will open the lines for your questions.
Speaker 2: As a reminder, this conference call is being recorded.
Speaker 2: list'ing today's call are groves Co Founder and CEO stwart landandisburg and CEO sergiocovantis.
Speaker 2: Before they begin their prepared remarks, I will review the Ford Looking Statements Safe Harper.
Speaker 2: Some of the statements made today about future prospects, financial results, business strategies, industry trends, and growth's ability to successfully respond to business risks.
Speaker 2: may be considered forward-looking.
Speaker 2: Such statements involve a number of risks and uncertainties that could cause actual results to different materially.
Speaker 2: All of these statements are based on growth's view of the world and their business as they see it today.
Speaker 2: as described in their SEC filings.
Speaker 2: The underlying facts and assumptions for these statements can change as the world and business changes.
Speaker 2: For more information, please refer to the risk factors discussed in their most recent filings with the SEC, which are available on Groves Investor Relations website at investors.grove.co.
Speaker 2: During today's call, they will also discuss
Speaker 2: Certain non- GAAP financial measures.
Speaker 2: Reconciliation of these non-GAP items to the most directly comparable GAAP financial measures are provided in their earnings release, which is also available on their investor relations website.
Speaker 2: I would now like to turn the call over to Stuart Landersburg to begin.
Speaker 3: Thank you operator. Hello everyone and thank you for joining the call today.
Speaker 3: I want to start this call with a reminder about why grows mission and brand purpose is more important and relevant than ever.
Speaker 3: Around the world, July was the hottest month on record.
Speaker 3: Wildfire's Blaze from Canada to Hawaii.
Speaker 3: The UN Secretary General recently declared the period of global warming has ended and the era of global boiling has arrived.
Speaker 3: A report from Swiss researchers said that in July we passed the annual amount of plastic waste that our systems can handle, the implication being that the rest of the year's plastic ends up as pollution in our environment.
Speaker 3: But change is possible.
Speaker 3: and consumers increasingly demanded.
Speaker 3: for Grove and for the Grove Co. Brand. This is an obligation.
Speaker 3: And this is an opportunity, and this is our company's reason for being.
Speaker 3: Turning now to the second quarter, this quarter was another very strong step in the journey to improve growth's fundamentals towards sustainable, profitable growth. We achieved record net revenue per order of $64.80, beating our previous record in Q4 2022 by $1.40, or 2.2%, while maintaining a strong gross margin
Speaker 3: a 51.9% comparable to our record in Q1 2023 despite the impact of a $1.1 million inventory reserve charge.
Speaker 3: excluding the impact of the reserve charge are Q2 2023 gross margin would have been 53.6 percent, which would have been a new record for growth.
Speaker 3: These two drivers, plus the strategic reduction in advertising spend, led to an adjusted EBITDA margin improvement of 570 basis points quarter over quarter and 2,270 basis points year over year, despite the expected decline in sales due to lower marketing spend throughout the last several quarters.
Speaker 3: Not only did we meaningfully improve our adjusted evitat, but we generated 1.2 million of operating free cash load during Q2, even inclusive of 3.1 million of cash interest payments on our outstanding debt.
Speaker 3: This is our first operating cash flow positive quarter ever as a company and the result is a true testament that supports the long-term ambition of being financially self-sufficient.
Speaker 3: The strong adjusted EBITDA results were driven by continued execution of our four-point value creation plan, which encompasses number one, improved marketing efficiency, number two, omnichannel expansion, number three, net revenue management, and four, operating expense discipline. I will dig into each of these initiatives in a bit more detail.
Speaker 3: Starting with marketing efficiency, we continue to see strong performance in the quarter due to the optimization of our spend allocation across channels and strong performance in unpaid channels.
Speaker 3: Media tax in the second quarter were down approximately 60% year-over-year and approximately 32% quarter-over-quarter achieving our lowest since the peak of the pandemic.
Speaker 3: Highlighting our ability to target the most efficient channels and our strong organic awareness.
Speaker 3: This result gives us increased confidence in our ability to become a profitable business and to stabilize and over the long-term grow our revenue. Furthermore, despite less than on a year-over-year basis, our internal brand research highlights that are unaided brand awareness is the highest it's ever been and increased materially.
Speaker 3: Verse our last measurement period, which was October of last year. Again, this is even at lower levels of strength.
Speaker 3: We made additional progress in the quarter on our Omni-Tanel Distribution Expansion Strategy despite its challenging retail environment overall for natural brands. We announced progress with CROGOR and HAN-EFERD as new partners taking our retail footprint to over 5,700 brick and mortar locations.
Speaker 3: We are also encouraged by the performance of Grove Co. our flagship brand on Amazon.
Speaker 3: We increased our SKU assortment to include laundry sheets, foaming hand soap, floor cleaner, glass cleaner, and tub and tile product lines during the quarter, expanding on the successful launches of multi-purpose cleaner concentrates,
Speaker 3: and hand and dish soap bundles during Q1. Across all retailers, we have also optimized our promotional strategies to drive margin expansion while continuing to expand distribution.
Speaker 3: Meeting our customers where they shop is critical to our objective of making sustainable, effective, household essentials as accessible as possible.
Speaker 3: We are just over two years into our retail journey and are encouraged by early trends. We are just getting started in this channel where the majority of consumers still shop and are excited to take share in this way in the US Home and Personal Care Market, which amounts to approximately $180 billion. Third, Net Revenue Management Initiative focused on strategic pricing and on the optimization of DTC Net Revenue per Order implemented in the back half of 2022 coupled with fewer new customer orders delivered a record Net Revenue per Order for growth of $64.80. This was an improvement of 11% year-over-year and 5% quarter-of-a-quarter.
Speaker 3: As we highlighted last quarter, as we improve our gross margins, increasing the DTC revenue we earn per order is especially beneficial. We will touch on this more later on, but we are optimistic that we can continue to move the needle on this metric as we expand our health and wellness offerings to the consumer.
Speaker 3: Lastly, even as we get closer to profitability, we remain ever focused on driving margin improvement by maintaining strict expense discipline and are seeing results across the P&L.
Speaker 3: from pricing action and procurement initiatives to improve gross margin.
Speaker 3: Carrier mix optimization that drives down out down shipping costs to improve advertising channel allocation and new strong performing creative coupled with strong organic traffic yielding Carrier mix optimization of adding 1.0 units of highing quality crew to academic use.
Speaker 3: Through relentless work on SG&A efficiencies, our entire team is focused on finding opportunities to drive profitability.
Speaker 3: while delivering for our consumer and executing with a streamlined expense structure.
Speaker 3: This value creation plan drove continued improvement on our second quarter financial result.
Speaker 3: Adjusted EBITDA loss in the second quarter of 2023 was $2.6 million.
Speaker 3: An improvement from a loss of $6.9 million in the first quarter of 2023, and a loss of $21.1 million in the second quarter last year, an improvement of 88% year-over-year.
Speaker 3: This improvement was achieved despite a revenue decline in the second quarter, which was down 8% sequentially and 17% year-over-year, primarily driven by the 74% strategic reduction in advertising spend in the current quarter when compared to Q2 2022.
Speaker 3: This reduction in advertising spend continues to reflect our strategy of building a machine that can focus on the most profitable marketing spend to drive profitable growth in 2024 off a durable and high-margin existing customer revenue base.
Speaker 3: While the reduction in advertising spend resulted in year over year comparative pressure on revenue, which we expect to continue throughout 2023.
Speaker 3: Our efforts to improve advertising efficiency have driven strong results, and we remain confident that it is the right step to position ourselves for success in the future.
Speaker 3: During the quarter, we continue to make progress towards our goal of moving beyond plastic.
Speaker 3: In the second quarter, we continue to focus on improving plastic intensity or pounds of plastic for $100.00 in revenue.
Speaker 3: Site-wide and through retail partners, plastic intensity was 1.01 pounds of plastic per hundred dollars in revenue.
Speaker 3: A slight improvement from 1.02 in the first quarter of 2023 and a meaningful improvement from 1.07 in the second quarter of last year.
Speaker 3: Specifically, 67% of revenue from Groveco products came from either zero plastic, reusable or refillable, and zero plastic waste products, meeting the company's Beyond Plastic standard.
Speaker 3: Down slightly from 70% in the first quarter of 2023 and second quarter of last year.
Speaker 3: We are working on bringing more innovations to market that can drive this number higher.
Speaker 3: We continue to challenge others to disclose plastic intensity as we lead the industry in the move away from plastic.
Speaker 3: Building off the success of our value creation plan, I'm excited to announce today our growth and market expansion initiative. This initiative builds on our strong position in sustainability with a focus on customer centricity and customer service.
Speaker 3: continuing momentum in the health and wellness category, enhancing our focus on replenishment categories, and improving the VIP program by making the benefits and experience more intuitive and easier to use. On that note, today I'm also excited to announce the VIP Hub, which makes it seamless for VIP customers to access exclusive benefits like samples,
We are optimistic that these benefits will continue to drive loyalty among our best customers while also providing the right incentives to add more VIPs to our community. We have a number of new features in the pipeline, but the early response has been terrific. We look forward to improving our customer experience for these customers and are grateful for their feedback as we seek to continue innovating. Grow Wellness, which launched in March, is making progress. As a reminder from our last quarter, our research suggests that 89% of customers would trust Grove over other sources to solve their health and wellness needs. Continuing the trend from last quarter, we saw a record amount of revenue.
and for cent of orders containing wellness products. This is important because not only do wellness offerings expand customer order sizes, contributing to record net revenue for order in the current quarter, but many of these offerings are highly regimented.
While health and wellness sales currently make up a small percentage of our overall revenue, we are encouraged by our customer's response to date and are excited to bring the more offerings in the coming quarters. We have grown our SKU Count in this category by over 60% year to date and expect to roughly double our SKU Count in this category over the coming quarters by the end of the year. Moreover, as we enhance our focus on high replenishment categories, R&D remains a top priority for us. Our GTC platform powers the growth innovation engine, providing us with superior access to customer data and preferences and allowing for quick iteration and test and learn. We use these insights to drive innovation and SKU development at a quicker pace.
than our competitors in many in the industry. This ensures that when we bring products to market and especially to retailers, we have already proven their success, allowing for sustainable growth in retail and in our own brands over time.
Our innovation pipeline is strong as well. And we are excited to announce new product launches over the coming quarters, which will provide more ways for customers to enjoy all of Groves' offers.
For example, we recently announced our fall seasonal collection, Traditions Aglow, featuring limited-edition fall scents Harvest Apple and Spiced Pumpkin. They are exclusively available on our site and app, and you can find great bundles in the VIP Hub.
We also continue to explore M&A, which could provide a step change opportunity.
Our grove.com platform, DTC fulfillment capability, in-house marketing expertise.
sustainability leadership and potential to merge retail sales efforts are a few examples of how our current infrastructure could create material synergies.
The bar for action as always is extremely high and we continue to be deliberate with how we invest time and resources.
Now, I want to turn to a couple of the incredibly exciting business updates.
First, I'm excited to announce the appointment of Jeff Yurcherson as the new Chief Executive Officer for Grove Collaborative effective August 16.
Jeff will also join our board of directors.
Jeff is the former CEO of Zoolily and Shoppac.
And before that, a 10-year Amazon executive, including experience-spring, innovative physical products to life as a leader for Amazon branch.
He is an experienced team builder with a proven direct consumer background building and leading multiple billion dollar brands.
and as importantly, Jeff is mission driven and understands that today's consumer rewards, companies and brands that do well by doing good.
Yes, customer centricity is second to none. And I believe that he will lead the company to profitable growth rooted in sustainable product innovation, improved customer experience, and continued boldness.
I am excited to personally take on the new role of Executive Chairman of the Board, exceeding our current Chairman, John Replogle, who will now serve as the Board's Lead Independent Director!
My focus will continue to be on strategy, as well as capital markets and corporate development among other things.
Next, I'm excited to announce that subsequent to the end of Q2, we received a $10 million investment from Volition Capital.
This investment is in a Series A preferred stock with no mandatory dividends, important for our cash flow, and a conversion price of $2.11 per share, a 9.5% premium to the 45-day view app at closing, plus warrants at $6.33 per share.
More details are available in the press release put out today.
We are highly sensitive to dilution. However, dilution's experience in the sector is truly second to none.
Larry Chang, a managing partner and co-founder at the Lysian, will join the Grove Board. His experience leading the Lysian's investment in Chewy and helping guide them past $1 billion in revenue and his current board service at GameStop, helping them drive transformation and community will both be highly added. The Lysian's investment in Chewy and helping them drive transformation and community will both be highly added.
Volition completed extensive private side, financial, and market due diligence.
Their investment is a differentiating statement in the current climate and detestment to the work our team has done over the last year creating a terrific future ahead.
Potentially uses a funds include general corporate purposes, growth opportunities, and possibly dot buybacks.
Before I pass the call over, I'd like to express my heartfelt gratitude to the entire growth team and to our community.
This has been an exceptional Euro transformation.
Your unwavering dedication to our customers.
Leaves are focused.
in your approach to our key initiatives and sense of urgency have been instrumental and are what created our success.
Both comparisons continue to be impacted by the strategic decision to reduce advertising spend as the company focuses on achieving profitable growth in 2024. The sequential decline is also impacted by the seasonal increase in advertising spend in the first quarter of 2023, when our sustainability messaging resonates more strongly with consumers. 24% millions annually.
and 28% over here to 1.1 million on a trail in 12 month basis. ETC net revenue prouder was up 5% quarter of a quarter and 11% over here to 64.8.
The record-high level surpassing our previous record of 63.4 achieved in Q4 2022.
The year of a year increase was due to net revenue management initiatives.
A higher percentage of existing customer orders compared to new customer orders, as well as the introduction of strategic price increases on growth brands and third-party products. The sequential increase was further benefited by a higher percentage of orders coming from existing customers and a recovery from a seasonally softer first quarter. First margin was down 20 base points from the first quarter of 2023.
For up 280 basis points, T over year to 51.9%, very close to growth record high in the first quarter of this year.
The Q2 2023 cross margin was impacted by a 1.1 million inventory reserve charge.
Asking the impact of these reserves.
Gross margin would have been 53.6%, which would have been a new record for the company.
of passing the prior record by 150 basis points.
Growth brands has percentage of net revenue, decline 380 basis points, quarter of a quarter, and 290 basis points year over year to 45%. The year over year as sequential decreases are due to a higher mix of third party products within existing customer orders, as we continue to expand our offering, and a decreasing new customer orders, which include more grow brand products. The sequential decline of growth brands products in existing orders was largely due to coming off a seasonally high performance in Q1.
whereas the year over year decline is due to an expansion to categories with an increased third party presence, including VMS, from the core and storage. We believe that having a diverse schedule of torment on our DTC site,
Here, over a year, decline is due to an expansion to categories with an increased third-party presence, including VMS, from the core and storage. We believe that having a diverse schedule of torment on our DTC site makes for a better curiosity.
and failed 74% of a year to 4.7 million, reflecting our strategic pullback in advertising spend and focus on improving marketing investment efficiency. We continue to be pleased with the improvement of advertising efficiency resulting from this strategy. Product development decreased 4% quarter of a quarter, and 32% of a year to 4.1 million. Mainly due to a decrease in personal expenses. Despite the lower investment, we continue to make progress in our innovation strategy. Money in our career, banks and companies continue to work the harder way to accomplish this cloud by giving their services a further understanding of flexibility in order to start new
and 24% less than the same period last year.
The quarter of a quarter decline was mainly due to lower fulfillment costs.
and other operating expenses, which is reflective of our strategy of creating operational efficiencies.
and eliminating less productive spend to focus on profitability. As a percent of net revenue, as the NA expense would have been 45.7,
and 50.2% in the second quarter of 2022. Our adjusted EBITDA loss improved to 2.6 million as compared to 6.9 million loss in the first quarter of 2023, and was a material improvement compared to the 21.1 million loss in the second quarter of 2022 despite lower sales. Our adjusted EBITDA margin improved by 570 basis points, quarter of a quarter and by 2,270 basis points year over year to minus 3.9%.
The quarter of a quarter improvement was due to lower advertising and ACN expenses partially offset by a lower gross profit due to less revenue.
Net loss in the quarter was 10.9 million compared to a net loss of 13.1 million in the first quarter of 2023.
and a loss of $35.3 million in the second quarter of 2022.
Turning now to the Wallachite.
We enter the quarter with 89.7 million in cash, cash equivalents and restricted cash.
Primarily from the adjusted EBITAN losses and interspanements, largely offset by working capital efficiencies, particularly on inventory. We finished the quarter with an inventory balance of 34.5 million, down 6.4 million from the end of Q1 2023. Bringing down our inventory balance continues to be an area of focus in our pursuit to improve our working capital, and we are pleased with our results to date.
Taking into account market conditions and business priorities, we will evaluate using this capacity strategically to supplement our liquidity. Lastly, as noted previously, the 10 million investment from pollution further solidifies our balance sheet. We feel good about our current liquidity position and our ability to continue executing on our addresses pushed to profitability. Now turning to our outlook. Now turning to our outlook.
Factoring in our performance to date and our expectations for the remainder of the year, we are offering the following guidance. So the 12-month period ending December 31, 2023.
We continue to expect net revenue of $260 to $270 million.
I would now like to turn the call back over to Stu for some closing remarks. Thank you Sergio. I am truly proud of our accomplishments in our first year as a public company. Our team deserves credit for the rapid progress towards profitable growth and a secure balance sheet. And I have never been more confident in the customer centric, sustainable innovation that lies ahead. The opportunity to meet our customers and collaborating to create and scale a sustainable brand continues to be an important and worthy North Star. I could not be more excited to welcome Jeff and Larry and I could not be more grateful.
Thank you all for listening to our prepared remarks. We are now happy to answer any questions. Operator, please open the line. Thank you. At this time, if you'd like to ask a question, please press the star and one on your telephone keypad. You may remove yourself from queue at any time by pressing star two. Once again, that is star one to ask a question.
Our first question will come from Susan Anderson with Canacor Genuity. Hi, good evening. Nice to have on the corner. It's great to see that improvement in profitability. So maybe if you could just kind of walk us through your thought process on why you felt right now is the right time to kind of hand the one over to.
someone else to kind of take the company through its next leg of growth and just kind of go over, you know, kind of like why now is the right time.
Thanks Susan and appreciate the call out for the progress. I hope you have a great day and feel good about the financial health this quarter.
In terms of why it was the right time, I think there were really two things to play. The first is, if you look at our journey from IPO to now, we really moved quite an incredible distance to get the business operating as close to profitability as we did in the second quarter, and as we've been able to say, we will going forward.
And that gives us the opportunity to look ahead and say, gosh, there really is this moment of, I don't want to quite say reset, but opportunity looking into the future, say, how can we best prepare ourselves to go do that? And so when we have the opportunity to work with an exceptional leader like Jeff, who has, you,
Truly a track record seconds none in terms of building customer centric direct consumer businesses You know that's something that's a massive opportunity for our mission for our customers for our shareholders That I think was too good to pass up on and you know so always that is that is my first thought and the second is that You know there's a lot of really great work to be done both inside the company that Jeff will be leaving
And outside the company to make sure that we are awareness continues to grow that we continue to have the time to focus and look at M&A in a current environment where there's a lot of really exciting opportunities out there and so really the sort of combination of having
a strong foundation with the opportunity to bring a truly, truly exceptional leader in Jeff and the opportunity to get some more leverage out in the market from the executive chairman role. I think made this an opportunity that was, as was in the timing, really just so right and so exciting. And as a shareholder and fan of the company, I'm really excited for all that comes in.
And then maybe if you could just talk about on your advertising spin, the quarter I think dropped at about 7% of sales, I think from 12% last quarter. I guess is this kind of the new benchmark we should think about for advertising spin as we look forward through the back half of this year and into next year.
No, so we've seen historically that advertising is a bit seasonal with, as Sergio mentioned, Q1, New Year, New You, people really like the sustainability message. We also find that back to school and holiday Thanksgiving, not holiday Christmas, are both very, very strong periods for us.
with a more efficient advertising miss because we're thinking a lot about how do we how do we line our spend up to the year so I think in Q4 We'll probably be a bit above the 7% I don't think we want to give specific guidance on that But I think for the full year we'll probably come in a bit above 7% Sergio anything you want to add there?
No two would say Vancouver, so that's the secure.
Okay, great. And then I think you mentioned that you guys did raise prices in the quarter. Did you guys say how much that contributed to the growth, I guess? I guess I was just looking for kind of like pricing versus volume.
That's a year over year basis. We raised prices. There was almost no price actually in the current quarter. Got it. OK. And then I guess last one for me just on the wellness shop sounds like it's going really well. I guess has a grown adult and material piece of the business.
or you're also seeing a drive-view customer to the site.
Strategic is a big drive with net revenue per order, but we really focus today on offering as to our existing customers both to get quick traction and to drive quick learning. And the first part of the question is about the materiality of the sales there? Does one confirm? Yeah, it sounds like it's kind of doing well out of the gate. I'm just curious, I guess. Has it gotten to you as a person of the business that's not significantly significant,
Sergio, do you want to take this one? OK, I will. So I think from a materiality perspective, it's still mid-single digits.
So it's not driving the overall top line, but customers who buy a wellness product tend to have net revenue per order around $80 or even a bit higher, which is obviously materially higher than our overall net revenue per order today. So as we look ahead to net revenue per order growth, we view wellness.
as one of the places where we can sustainably build on our current basket sizes, deliver more value for our customers, and of course, you know, that incremental dollar of net revenue for order of average order value is quite margin-accretive.
So we really like that. So it's already having a real effect in terms of driving net revenue per order hire, but in terms of driving overall revenue, I think we're a little early to say it's a big driver, but hopefully soon.
is early days still to talk about the long term, but rest assured that changing the mix onto these categories is something that would be agreed to put a company in the long run. And we are seeing good success at the moment. So we wouldn't call out the specifics, but indeed we are excited with the opportunity ahead. Great, thanks so much and good luck to you and everything in the future. And hopefully you get a little bit of downtime and the luck of the rest of the year.
Thanks so much, Susan. See you soon. Thank you. It's a quick reminder that is star one. If you'd like to ask a question, our next question comes from Dana Delcee with Delcee Group.
Hi, good afternoon everyone and nice to see the progress. Welcome Jeff and Stu, glad you're still very, very much involved. As you think about the expense reduction this quarter, which obviously advertising expense was significant, it looks like there was a decline in fulfillment costs also.
Yeah, thank you. You're here from Zeta. Go for it, Sergio. Oh, thank you. Thank you, Dana. And thank you for the question. So basically, if I understood the spirit of the question is getting a sense on how this is going to translate going forward, I would say that this, what you saw, thank you for confirming that what you saw on Q2 in terms of full-filming cost and reductions, yes, it's going to continue. The trend has been one that we feel really proud about the efforts that the team have achieved in terms of reducing, controlling the expense in spite of inflation. And this has to do with.
jumping into regional carriers across the board that is helping us basically control the cost. So I don't know if that answers your question, but that's part of the principle why you are seeing it, and we will continue to see this trend. I will be at this magnitude of the $2 million or so. Go forward.
Not at this magnitude because the first chunk is the important one, but we will continue to be savings coming from that for sure. And when you think of the path to profitability and getting near break even in the third quarter, as you think about next year and just the path of advertising and that path to profitability.
and LTV to CAC of course. So if you think about year over year where we've come on that, we've seen huge improvements there. And we continue to be focused on making sure not only are we driving a really good return, but we're focused on optimizing down to make sure our advertising spend is more effective.
We've said a lot of times that we're targeting, this is not guidance, but just focus on finding the way to profitable growth in 2024. And so, you know, we'd love to see advertising spend, sort of,
least flat to potentially a little bit up year over year in 2024 but we're still building the plan that drives profitable growth in 2024. I think throughout the balance of the year you can expect that it will continue to be a seasonally we will continue to spend seasonally more in Q1 and in sort of end of Q3 beginning of Q4 as I mentioned for
for those seasonally strong periods. But I think you're right to say, hey, we're going to be more focused on making sure that we have enough advertising to drive growth as we get to profitability.
and some of the new channel new partnerships like program Haniford, was there a difference in self-rule and also your brand and third party brands in terms of what you're saying? So the quarter was fairly balanced and strong throughout. I think we continue to find that, if you look at our net revenue per order and our gross margin, those are sequential trends. And so if it's getting better, quarter over quarter is probably also generally getting better month over month, right? Not every month better than the last but...
in general, sort of those things tend to grow month after, tend to be growing on sequential basis. And so through the quarter, I think we saw pretty consistent demand. We felt very good about our performance on Prime Day, but we're very early there. So that's still, it's growing at a great clip, but still very small. And through the quarter, I think, look, we've clearly been driving this business to operate as close to...
I'll answer the questions.
the question. Thank you.
Thank you. There are no additional questions at this time. I'd like to now turn the conference back over to our presenters for any closing remarks.
Thank you, thank everyone for joining. Again, huge thank you to the Grove team for exceptional progress this quarter. And a huge welcome to Jeff, excited to see all of the great things this next chapter holds for Grove. Thanks so much everyone, be well.
Thank you, ladies and gentlemen. That concludes today's presentation. You may now disconnect.