Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | May 06, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-40378 | |
Entity Registrant Name | The Honest Company, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 90-0750205 | |
Entity Address, Address Line One | 12130 Millennium Drive | |
Entity Address, Address Line Two | #500 | |
Entity Address, City or Town | Los Angeles | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90094 | |
City Area Code | 888 | |
Local Phone Number | 862-8818 | |
Title of 12(b) Security | Common Stock, $0.0001 par value per share | |
Trading Symbol | HNST | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 98,637,688 | |
Entity Central Index Key | 0001530979 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets | ||
Cash and cash equivalents | $ 33,585 | $ 32,827 |
Accounts receivable, net | 40,507 | 43,084 |
Inventories | 74,502 | 73,490 |
Prepaid expenses and other current assets | 7,770 | 8,371 |
Total current assets | 156,364 | 157,772 |
Operating lease right-of-use asset | 22,090 | 23,683 |
Property and equipment, net | 12,824 | 13,486 |
Goodwill | 2,230 | 2,230 |
Intangible assets, net | 291 | 309 |
Other assets | 4,272 | 4,141 |
Total assets | 198,071 | 201,621 |
Current liabilities | ||
Accounts payable | 25,304 | 22,289 |
Accrued expenses | 26,416 | 32,209 |
Deferred revenue | 1,942 | 2,212 |
Total current liabilities | 53,662 | 56,710 |
Long term liabilities | ||
Operating lease liabilities, net of current portion | 19,642 | 21,738 |
Other long-term liabilities | 0 | 34 |
Total liabilities | 73,304 | 78,482 |
Commitments and contingencies (Note 7) | ||
Stockholders’ equity | ||
Preferred stock, $0.0001 par value, 20,000,000 shares authorized at March 31, 2024 and December 31, 2023, none issued or outstanding as of March 31, 2024 and December 31, 2023 | 0 | 0 |
Common stock, $0.0001 par value, 1,000,000,000 shares authorized at March 31, 2024 and December 31, 2023; 97,168,703 and 95,868,421 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | 9 | 9 |
Additional paid-in capital | 605,229 | 602,198 |
Accumulated deficit | (480,471) | (479,068) |
Total stockholders’ equity | 124,767 | 123,139 |
Total liabilities and stockholders’ equity | $ 198,071 | $ 201,621 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Stockholders’ equity | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock issued (in shares) | 97,168,703 | 95,868,421 |
Common stock outstanding (in shares) | 97,168,703 | 95,868,421 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Revenue | $ 86,217 | $ 83,388 |
Cost of revenue | 54,335 | 63,186 |
Gross profit | 31,882 | 20,202 |
Operating expenses | ||
Selling, general and administrative | 22,420 | 25,817 |
Marketing | 9,096 | 10,234 |
Restructuring | 0 | 1,350 |
Research and development | 1,681 | 1,459 |
Total operating expenses | 33,197 | 38,860 |
Operating loss | (1,315) | (18,658) |
Interest and other income (expense), net | (63) | (189) |
Loss before provision for income taxes | (1,378) | (18,847) |
Income tax provision | 25 | 20 |
Net loss | $ (1,403) | $ (18,867) |
Net loss per share attributable to common stockholders: | ||
Basic (in dollars per share) | $ (0.01) | $ (0.20) |
Diluted (in dollars per share) | $ (0.01) | $ (0.20) |
Weighted-average shares used in computing net loss per share attributable to common stockholders: | ||
Basic (in shares) | 96,273,168 | 93,106,075 |
Diluted (in shares) | 96,273,168 | 93,106,075 |
Other comprehensive income (loss) | ||
Unrealized gain (loss) on short-term investments, net of taxes | $ 0 | $ 19 |
Comprehensive loss | $ (1,403) | $ (18,848) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Beginning balance (in shares) at Dec. 31, 2022 | 0 | ||||
Beginning balance at Dec. 31, 2022 | $ 0 | ||||
Ending balance (in shares) at Mar. 31, 2023 | 0 | ||||
Ending balance at Mar. 31, 2023 | $ 0 | ||||
Beginning balance (in shares) at Dec. 31, 2022 | 92,907,351 | ||||
Beginning balance at Dec. 31, 2022 | 146,360 | $ 9 | $ 586,213 | $ (439,830) | $ (32) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (18,867) | (18,867) | |||
Other comprehensive loss | 19 | 19 | |||
Stock-based compensation | 3,772 | 3,772 | |||
Vested restricted stock units (in shares) | 549,484 | ||||
Ending balance (in shares) at Mar. 31, 2023 | 93,456,835 | ||||
Ending balance at Mar. 31, 2023 | $ 131,284 | $ 9 | 589,985 | (458,697) | (13) |
Beginning balance (in shares) at Dec. 31, 2023 | 0 | ||||
Beginning balance at Dec. 31, 2023 | $ 0 | ||||
Ending balance (in shares) at Mar. 31, 2024 | 0 | ||||
Ending balance at Mar. 31, 2024 | $ 0 | ||||
Beginning balance (in shares) at Dec. 31, 2023 | 95,868,421 | 95,868,421 | |||
Beginning balance at Dec. 31, 2023 | $ 123,139 | $ 9 | 602,198 | (479,068) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (1,403) | (1,403) | |||
Other comprehensive loss | $ 0 | ||||
Stock options exercised (in shares) | 126,000 | 126,000 | |||
Stock options exercised | $ 508 | 508 | |||
Stock-based compensation | $ 2,523 | 2,523 | |||
Vested restricted stock units (in shares) | 1,174,282 | ||||
Ending balance (in shares) at Mar. 31, 2024 | 97,168,703 | 97,168,703 | |||
Ending balance at Mar. 31, 2024 | $ 124,767 | $ 9 | $ 605,229 | $ (480,471) | $ 0 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities | ||
Net loss | $ (1,403) | $ (18,867) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 717 | 668 |
Stock-based compensation | 2,523 | 3,772 |
Other | 1,593 | 1,545 |
Changes in assets and liabilities: | ||
Accounts receivable, net | 2,577 | (2,894) |
Inventories | (1,012) | 17,191 |
Prepaid expenses and other assets | 471 | 7,884 |
Accounts payable, accrued expenses and other long-term liabilities | (2,873) | (10,845) |
Deferred revenue | (269) | 670 |
Operating lease liabilities | (1,988) | (1,885) |
Net cash provided by (used in) operating activities | 336 | (2,761) |
Cash flows from investing activities | ||
Proceeds from maturities of short-term investments | 0 | 2,953 |
Purchases of property and equipment | (76) | (473) |
Net cash (used in) provided by investing activities | (76) | 2,480 |
Cash flows from financing activities | ||
Proceeds from exercise of stock options | 508 | 0 |
Payments on finance lease liabilities | (10) | (15) |
Net cash provided by (used in) financing activities | 498 | (15) |
Net increase (decrease) in cash and cash equivalents | 758 | (296) |
Cash and cash equivalents | ||
Beginning of the period | 32,827 | 9,517 |
End of the period | 33,585 | 9,221 |
Supplemental disclosures of noncash activities | ||
Capital expenditures included in accounts payable and accrued expenses | $ 1 | $ 25 |
Nature of Business
Nature of Business | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | Nature of BusinessThe Honest Company, Inc. (the “Company”) was incorporated in the State of California on July 19, 2011 and on May 23, 2012 was re-incorporated in the State of Delaware under the same name. The Company is a personal care company dedicated to creating clean- and sustainably-designed products. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 31, 2023. The condensed consolidated financial statements are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on a basis consistent with that used to prepare the audited annual consolidated financial statements and include, in the opinion of management, all adjustments, consisting of normal recurring items, necessary for the fair statement of the condensed consolidated financial statements. The consolidated balance sheet as of December 31, 2023 has been derived from the audited financial statements at that date but does not include all of the disclosures required by GAAP. The condensed consolidated financial statements include the accounts of the Company, and its wholly owned subsidiaries after elimination of intercompany transactions and balances. Segment Reporting and Geographic Information The Company’s Chief Executive Officer, as the chief operating decision maker, organizes the Company, manages resource allocations, and measures performance on the basis of one operating segment. All of the Company’s long-lived assets are located in the United States and substantially all of the Company’s revenue is from customers located in the United States. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s estimates, which are subject to varying degrees of judgment, include the valuation of inventories, sales returns and allowances, allowances for credit losses, valuation of short-term investments, capitalized software, useful lives associated with long-lived assets, incremental borrowing rates associated with leases, valuation allowances with respect to deferred tax assets, accruals and contingencies, recoverability of non-cash marketing credits, recoverability of goodwill and long-lived assets, and the valuation and assumptions underlying stock-based compensation. On an ongoing basis, the Company evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities. The Company assessed certain accounting matters and estimates that generally require consideration of forecasted information in context with the information reasonably available to the Company as of March 31, 2024 and through the date these condensed consolidated financial statements were issued. Management is not aware of any specific event or circumstance that would require an update to estimates or judgments or a revision to the carrying value of assets or liabilities. However, these estimates and judgments may change as new events occur and additional information is obtained, which may result in changes being recognized in the Company’s consolidated financial statements in future periods. Cash and Cash Equivalents Cash equivalents consist of short-term, highly liquid investments with stated maturities of three months or less from the date of purchase. Cash equivalents comprise amounts invested in money market funds. Accounts Receivable Accounts receivable is presented as net of allowance for credit losses. The Company does not accrue interest on its trade receivables. The Company evaluates accounts receivable estimated to be uncollectible by considering the lifetime expected credit losses of the Company's accounts receivable at time of inception, and records an allowance for credit losses, as necessary, with the balance of the Company's accounts receivable presented at the net realizable value. The Company considers factors in its allowance for credit losses such as historical analysis, credit quality of customers, the age of the accounts receivable balances and macroeconomic conditions that may impact on the Company's customers' ability to pay. The allowance for credit losses was $0.4 million and $0.4 million as of March 31, 2024 and December 31, 2023, respectively. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses the following hierarchy in measuring the fair value of the Company’s assets and liabilities, focusing on the most observable inputs when available: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than Level 1 quoted prices, such as quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active for identical or similar assets and liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Valuations are based on inputs that are unobservable and significant to the overall fair value measurement of the assets or liabilities. Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Fair value is based on quoted market prices, if available. If listed prices or quotes are not available, fair value is based on internally developed models that primarily use market-based or independently sourced market parameters as inputs. Cash equivalents, consisting primarily of money market funds, represent highly liquid investments with maturities of three months or less at purchase. Market prices, which are Level 1 in the fair value hierarchy, are used to determine the fair value of the money market funds. Investments in debt securities are measured using broker provided indicative prices developed using observable market data, which are considered Level 2 in the fair value hierarchy. Certain assets, including long-lived assets, goodwill and intangible assets are also subject to measurement at fair value on a non-recurring basis if they are deemed to be impaired as a result of an impairment review. The fair value is measured using Level 3 inputs in the fair value hierarchy. Recent Accounting Pronouncements As an “emerging growth company,” the Jumpstart Our Business Startups Act allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use the adoption dates applicable to private companies. As a result, the Company’s financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies. Recently Issued Accounting Pronouncements – Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in the ASU require that a public entity discloses, on an annual and interim basis, significant segment expenses that are regularly provided to an entity's chief operating decision maker (“CODM”), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Retrospective application is required for all prior periods presented, and early adoption is permitted. The Company does not expect the adoption of ASU No. 2023-07 to have a material impact on the Company’s consolidated financial statements or disclosures. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes: Improvements to Income Tax Disclosures. This guidance requires consistent categories and greater disaggregation of information in the rate reconciliation and disclosures of income taxes paid by jurisdiction. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2024. The Company does not expect the adoption of ASU No. 2023-09 to have a material impact on the Company’s consolidated financial statements or disclosures. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue The Company had previously presented its revenue by sales channel of Digital and Retail and by product category of Diapers and Wipes, Skin and Personal Care and Household and Wellness. In determining the appropriate categories to use to disaggregate revenue in accordance with the requirements of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers, the Company had considered the information regularly reviewed by its CODM for evaluating its financial performance and making resource allocation decisions and the guidance to disaggregate revenue from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. In 2023, the Company executed a broad-based Transformation Initiative with Brand Maximization as one of the Pillars designed to leverage the strength of the Honest brand. As part of its strategy to build the Honest brand, the Company’s CODM is now evaluating the Company’s financial performance and making resource allocation decisions across the Company’s products as one brand of a portfolio of multiple products. As a result, in the first quarter of 2024, the Company decided to remove the disaggregation of revenue by product category to align with changes made to the Company’s long-term strategy. The Company is now disaggregating revenue by direct-to-consumer and retail and third-party ecommerce customers. The change had no effect on the Company's results of operations or timing of revenue recognition. Direct-to-Consumer For direct sales to the consumer through the Company's website, Honest.com, the Company's performance obligation consists of the sale of finished goods to the consumer. Consumers may purchase products at any time or enter into subscription arrangements. Consumers place orders online in accordance with the Company's standard terms and conditions and authorize payment when the order is placed. Credit cards are charged at the time of shipment and payments are typically processed within two to three business days. For subscription arrangements, consumers sign up to receive products on a periodic basis. Subscriptions are cancellable at any time without penalty, and no amounts are collected from the consumer until products are shipped. Revenue is recognized when transfer of control to the consumer takes place, which is when the product is delivered to the carrier. Sales taxes collected from consumers are accounted for on a net basis and are excluded from revenue. During the three months ended March 31, 2024 and 2023, 15% and 18% of the Company's revenue was generated from Honest.com, respectively. Retail and Third-Party Ecommerce For retail and third-party ecommerce sales, the Company's performance obligation consists of the sale of finished goods to retailers and third-party ecommerce customers. Revenue is recognized when control of the promised goods is transferred to those customers at time of shipment or delivery, depending on the contract terms. After the completion of the performance obligation, the Company has the right to consideration as outlined in the contract. Payment terms vary among the retail and third-party ecommerce customers although terms generally include a requirement of payment within 30 to 45 days of product shipment. Non-Monetary Transactions The Company has in the past and may in the future enter into trade agreements with a vendor to exchange excess inventory for future marketing and transportation credits. The Company recognizes revenue reflecting the fair value of the marketing and transportation credits upon delivery of goods, with the corresponding short and long-term asset included in prepaid expenses and other current assets and other assets in the accompanying condensed consolidated balance sheets. The Company may use the marketing and transportation credits over four years from the date of the respective agreement, with an option to extend for another two years if agreed upon by both parties. For the three months ended March 31, 2024, the Company did not enter into any new trade agreements. For the three months ended March 31, 2024 and 2023, the Company did not recognize any revenue or associated cost of revenue related to these marketing and transportation credits. The Company assesses the recoverability of the marketing and transportation credits periodically. Factors considered in evaluating the recoverability include management’s history of credit usage and future plans with respect to advertising, freight and other services for which these credits can be used. Any impairment losses are charged to operations as they become determinable. For the three months ended March 31, 2024, the Company recorded no impairment losses related to these credits and used an aggregate of $19 thousand |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Financial assets measured and recorded at fair value on a recurring basis consist of the following as of: March 31, 2024 Level 1 Level 2 Level 3 Total (In thousands) Cash equivalents Money market funds $ 5,662 $ — $ — $ 5,662 Total cash equivalents $ 5,662 $ — $ — $ 5,662 December 31, 2023 Level 1 Level 2 Level 3 Total (In thousands) Cash equivalents Money market funds $ 5,589 $ — $ — $ 5,589 Total cash equivalents $ 5,589 $ — $ — $ 5,589 |
Credit Facilities
Credit Facilities | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Credit Facilities | Credit Facilities In January 2023, the Company entered into a first lien credit agreement (the “2023 Credit Facility”), with JPMorgan Chase Bank, N.A., as administrative agent and lender, and the other lenders party thereto, which provides for a $35.0 million revolving credit facility that matures on April 30, 2026. The 2023 Credit Facility includes a sub-facility that provides for the issuance of letters of credit in an amount of up to $15.0 million at any time outstanding. Availability of the 2023 Credit Facility is based upon a borrowing base formula and periodic borrowing base certifications valuing certain of the Company’s accounts receivable and inventory as reduced by an availability block and certain reserves, if any. The 2023 Credit Facility includes an uncommitted accordion feature that allows for increases in the revolving commitment to as much as an additional $35.0 million, for up to $70.0 million in potential revolving commitment. The 2023 Credit Facility is subject to customary fees for loan facilities of this type, including a commitment fee based on the average daily undrawn portion of the 2023 Credit Facility. The Company recognizes the commitment fee as incurred in interest and other income (expense), net in the condensed consolidated statements of comprehensive loss. For the three months ended March 31, 2024 and 2023, the commitment fee incurred was immaterial. As of March 31, 2024, there were $3.7 million outstanding letters of credit and $17.7 million available to be drawn upon. As of March 31, 2024, there was no outstanding balance under the 2023 Credit Facility. The interest rate applicable to the 2023 Credit Facility is, at the Company’s option, either (a) the Adjusted Term SOFR rate (subject to a 0.00% floor), plus a margin ranging from 1.50% to 2.25% or (b) the CB floating rate, (i) plus a margin of 0.25% or (ii) minus a margin ranging from 0.25% to 0.50%. The margin is based upon the Company’s fixed charge coverage ratio. The CB floating rate is the higher of (a) the Wall Street Journal prime rate and (b) 2.50%. The 2023 Credit Facility will terminate and borrowings thereunder, if any, would be due in full on April 30, 2026. Debt under the 2023 Credit Facility is guaranteed by substantially all of the Company’s material domestic subsidiaries and is secured by substantially all of the Company’s and such subsidiaries’ assets. The 2023 Credit Facility contains covenants that restrict, among other things, the Company's ability to sell assets, make investments and acquisitions, grant liens, change the Company’s lines of business, pay dividends and make certain other restricted payments. The Company is subject to certain affirmative and negative covenants including the requirement that it maintains a minimum total fixed charge coverage ratio during the periods set forth in the 2023 Credit Facility. Failure to do so, unless waived by the lenders under the 2023 Credit Facility pursuant to its terms, as amended, would result in an event of default under the 2023 Credit Facility. As of March 31, 2024, the Company is in compliance with all covenants under the 2023 Credit Facility. |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consisted of the following: March 31, 2024 December 31, 2023 (In thousands) Payroll and payroll related expenses (1) $ 4,132 $ 8,007 Accrued inventory purchases 6,125 9,368 Accrued returns 238 269 Accrued rent (2) 8,212 8,105 Accrued restructuring (3) 251 356 Other accrued expenses 7,458 6,104 Total accrued expenses $ 26,416 $ 32,209 ____________________ (1) Includes $0.9 million and $1.2 million of Chief Executive Officer and Chief Financial Officer executive transition related expenses as of March 31, 2024 and December 31, 2023, respectively. (2) Represents short-term operating lease liabilities. Refer to Note 12, "Leases" included in these condensed consolidated financial statements for more information on leases. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation From time to time, the Company is subject to various claims and contingencies which are in the scope of ordinary and routine litigation incidental to its business, including those related to regulation, business transactions, employee-related matters and taxes, among others. When the Company becomes aware of a claim or potential claim, the likelihood of any loss or exposure is assessed. If it is probable that a loss will result and the amount or range of the loss can be reasonably estimated, the Company records a liability for the loss and discloses the possible loss in the consolidated financial statements. Legal costs are expensed as incurred. On September 23, 2020, the Center for Advanced Public Awareness (“CAPA”) served a 60-Day Notice of Violation on the Company, alleging that the Company violated California’s Health and Safety Code (“Prop 65”) because of the amount of lead in the Company’s Diaper Rash Cream and seeking statutory penalties and product warnings available under Prop 65. On October 22, 2021, CAPA filed a complaint in California Superior Court in the County of San Francisco (the “Court”) for the alleged Prop 65 violations contained in its 60-Day Notice of Violation. The Company filed its answer and notice of related cases against Prestige Consumer Healthcare, Inc., Burt's Bees, Inc., and Hain Celestial Group, Inc. on January 7, 2022 and has stipulated to relate these cases and transfer them to the Court's Complex Division. On April 30, 2024, the Company filed its motion for summary judgment. The Company intends to vigorously defend itself in this matter. The matter’s outcome and materiality are uncertain at this time. Therefore, the Company cannot estimate the probability of loss or make an estimate of the loss or range of loss in this matter. On September 15, 2021, Cody Dixon filed a putative class action complaint in the U.S. District Court for the Central District of California alleging federal securities law violations by the Company, certain current officers and directors, and certain underwriters in connection with the Company’s initial public offering (“IPO”). A second putative class action complaint containing similar allegations against the Company and certain current officers and directors was filed by Stephen Gambino on October 8, 2021 in the U.S. District Court for the Central District of California. These related complaints have been transferred to the same court and a Lead Plaintiff has been appointed in the matter, and a putative consolidated class action complaint was filed by the Lead Plaintiff on February 21, 2022, alleging claims and seeking relief under Sections 11 and 15 of the Securities Act of 1933 relating to the Company’s IPO. Defendants’ motion to dismiss the putative consolidated class action complaint was filed on March 14, 2022. On July 18, 2022, the Company's motion to dismiss was granted in part and denied in part. On May 1, 2023, the Lead Plaintiff’s motion for class certification in the consolidated class action was granted in part and denied in part, with the U.S. District Court for the Central District of California limiting the certified class to only those persons and entities that purchased or otherwise acquired the Company’s publicly traded common stock pursuant and traceable to the Company’s IPO offering documents prior to August 19, 2021, as well as all persons and entities that acquired ownership of a trading account, retirement account, or any other similar investment account or portfolio containing the Company’s publicly traded common stock that was purchased or otherwise acquired pursuant and traceable to the IPO offering documents prior to August 19, 2021, and were damaged thereby. On August 14, 2023 the Lead Plaintiff filed an amended consolidated class action complaint naming as additional defendants Catterton Management Company L.L.C., L Catterton VIII, L.P., L. Catterton VIII Offshore, L.P., THC Shared Abacus, LP, Catterton Managing Partner VIII, L.L.C., and C8 Management, L.L.C. On October 16, 2023, those additional defendants filed a motion to dismiss the Second Amended Complaint with respect to the claims against them. On January 31, 2024, that motion to dismiss was granted by the court to the extent those additional defendants challenged the claims as untimely. The court granted Lead Plaintiff leave to amend within fourteen days of that order. On February 14, 2024, the Lead Plaintiff filed a further amended Second Amended Complaint against the additional defendants. The additional defendants filed a motion to dismiss the further amended Second Amended Complaint, which was denied by the court on April 22, 2024. A derivative complaint was filed by Hayato Ono on behalf of the Company on November 29, 2021 in the U.S. District Court for the Central District of California, alleging breach of fiduciary duties, unjust enrichment, waste, gross mismanagement, and federal securities law violations by the Company’s directors and certain officers. On December 17, 2021, a second derivative complaint containing similar allegations against the Company’s directors and certain officers was filed by Mike Wang in the U.S. District Court for the Central District of California. These two federal derivative cases have been transferred to the same judge who is presiding over the securities class action complaints. A third derivative complaint was filed by Leah Bisch and Raluca Corobana in California Superior Court for the County of Los Angeles on January 3, 2022 with similar allegations. A fourth derivative complaint was filed by David Butler in the U.S. District Court for the District of Delaware on October 19, 2022 with similar allegations. Each of these federal and state court derivative cases have been stayed pending the outcome of a motion for summary judgment in the securities class action. These matters are in the preliminary stages of litigation with uncertain outcomes at this time. Therefore, the Company cannot estimate the probability of loss or make an estimate of the loss or range of loss in these matters. On August 10, 2022, Catrice Sida and Kris Yerby filed a putative class action complaint in the U.S. District Court for the Northern District of California alleging violations of California’s Unfair Competition Law, False Advertising Law, Consumers Legal Remedies Act, breach of warranty, and unjust enrichment related to plant-based claims on certain of the Company’s wipes products and seeking declaratory relief, injunctive relief, monetary damages, punitive damages and statutory penalties, and attorneys’ fees and costs. The Company filed its motion to dismiss on October 17, 2022. On December 6, 2022, the Company's motion to dismiss was denied. The Company’s motion to stay pending the Ninth Circuit Court of Appeals’ review of the Central District of California’s decision in Whiteside v. Kimberly-Clark Corp., No. 5:22-cv-1988 JGB (SPx), 2023 WL 4328175 (C.D. Cal. June 1, 2023) was denied on September 5, 2023. On February 20, 2024, the parties filed a Notice of Settlement to notify the court that the parties have agreed to settle the matter on an individual, non-class basis. The plaintiffs will file a Stipulation of Dismissal upon finalization of the settlement agreement. As of March 31, 2024 and December 31, 2023, the Company was not subject to any other currently pending legal matters or claims that based on its current evaluation are expected to have a material adverse effect on its financial position, results of operations, or cash flows should such matters be resolved unfavorably. Indemnifications In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to investors, directors and officers with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. These indemnifications may survive termination of the underlying agreement and the maximum potential number of future payments the Company could be required to make under these indemnification provisions may not be subject to maximum loss clauses. The maximum potential number of future payments the Company could be required to make under these indemnification provisions is indeterminable. The Company has never been involved in litigation in connection with these indemnification arrangements. As of March 31, 2024 and December 31, 2023, the Company has not accrued a liability for these guarantees as the likelihood of incurring a payment obligation, if any, in connection with these guarantees is not probable or reasonably estimable due to the unique facts and circumstances involved. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock Options The following table summarizes the stock option activity: Number of Options Weighted Average Exercise Price Outstanding at December 31, 2023 13,315,796 $ 5.25 Granted — $ — Exercised (126,000) $ 4.03 Forfeited/Cancelled (28,541) $ 5.32 Outstanding at March 31, 2024 13,161,255 $ 5.26 2021 Equity Incentive Plan In April 2021, the Company’s board of directors adopted the Company’s 2021 Equity Incentive Plan (the “2021 Plan”), which became effective in connection with the IPO. All equity-based awards granted on or after the effectiveness of the 2021 Plan are granted under the 2021 Plan. The 2021 Plan provides for grants of incentive stock options (“ISOs”) within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), to the Company’s employees and its parent and subsidiary corporations’ employees, and for the grant of nonstatutory stock options (“NSOs”), stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”) awards, performance awards and other forms of awards to the Company’s employees, directors and consultants and any of its affiliates’ employees and consultants. Initially, the maximum number of shares of the Company’s common stock that may be issued under its 2021 Plan will not exceed 25,025,580 shares of the Company’s common stock. In addition, the number of shares of the Company’s common stock reserved for issuance under its 2021 Plan will automatically increase on January 1 of each year for a period of ten years, beginning on January 1, 2022 and continuing through January 1, 2031, in an amount equal to (1) 4% of the total number of shares of the Company’s common stock outstanding on December 31 of the immediately preceding year, or (2) a lesser number of shares determined by the Company’s board of directors prior to the date of the increase. On January 1, 2024, 3,825,379 additional shares were reserved for issuance pursuant to this provision. The maximum number of shares of the Company’s common stock that may be issued on the exercise of ISOs under its 2021 Plan is 75,100,000 shares. The following table summarizes the RSU activity: Number of Shares Weighted Average Grant Date Fair Value Per Share Non-Employee Directors Directors, Officers and Employees Non-Employee Directors Directors, Officers and Employees Unvested RSUs at December 31, 2023 957,199 7,299,254 $ 2.19 $ 2.38 Granted 60,626 4,616,500 $ 3.30 $ 3.51 Vested (15,156) (1,159,126) $ 3.30 $ 2.35 Forfeited — (41,074) $ — $ 2.29 Unvested RSUs at March 31, 2024 1,002,669 10,715,554 $ 2.24 $ 2.87 As of March 31, 2024, there was $30.5 million of unrecognized stock-based compensation expense related to unvested RSUs, which is expected to be recognized over a weighted-average period of 3.1 years. 2021 Employee Stock Purchase Plan In April 2021, the Company’s board of directors adopted the Company’s 2021 Employee Stock Purchase Plan (the “2021 ESPP”). The Company authorized the issuance of 1,175,000 shares of common stock under the 2021 ESPP. In addition, the number of shares available for issuance under the 2021 ESPP will be annually increased on January 1 of each year for a period of ten years, beginning on January 1, 2022 and continuing through January 1, 2031 by the lesser of (i) 1% of the total number of shares of common stock outstanding on December 31 of the immediately preceding year; and (ii) 3,525,000 shares, except before the date of any such increase, the Company’s board of directors may determine that such increase will be less than the amount set forth in clauses (i) and (ii). On January 1, 2024, 956,344 additional shares were reserved for issuance pursuant to this provision. Subject to any limitations contained therein, the 2021 ESPP allows eligible employees to contribute (in the form of payroll deductions or otherwise to the extent permitted by the administrator) an amount established by the administrator from time to time in its discretion to purchase common stock at a discounted price per share. Under the 2021 ESPP, eligible employees are granted the right to purchase shares of common stock at the lower of 85% of the fair value at the time of grant or 85% of the fair value at the time of exercise. The right to purchase shares of common stock is granted in May and November of each year for an offering period of approximately six months. For the three months ended March 31, 2024, no shares were purchased under the 2021 ESPP. As of March 31, 2024, the Company had 3,712,738 remaining authorized shares available for purchase. The following table summarizes the key input assumptions used in the Black-Scholes option-pricing model to estimate the grant-date fair value of the 2021 ESPP: For the three months ended March 31, 2024 Expected life of options (in years) 0.50 Expected stock price volatility 69.20 % — 86.19% Risk free interest rate 5.36 % — 5.43% Expected dividend yield —% Weighted average grant-date fair value per share $ 0.56 — $0.67 2023 Inducement Plan In March 2023, the Company's Compensation Committee adopted the 2023 Inducement Plan (the “Inducement Plan”). The Inducement Plan reserved 4,000,000 shares of the Company’s common stock for issuance under the Inducement Plan to individuals who satisfy the standards for inducement grants under the relevant Nasdaq Stock Market rules. As of March 31, 2024, there were 275,083 shares available for future grant under the Inducement Plan. Stock-Based Compensation Expense Stock-based compensation expense related to RSU awards, 2021 ESPP purchases and stock options, as applicable, are as follows: For the three months ended March 31, 2024 2023 (In thousands) Selling, general and administrative $ 2,413 $ 3,713 Research and development 110 59 Total stock-based compensation expense $ 2,523 $ 3,772 |
Net Income (Loss) per Share Att
Net Income (Loss) per Share Attributable to Common Stockholders | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) per Share Attributable to Common Stockholders | Net Income (Loss) per Share Attributable to Common Stockholders The Company computes net income (loss) per share using the two-class method required for participating securities. The two-class method requires net income be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. In periods where the Company has net losses, losses are not allocated to participating securities as they are not required to fund the losses. Basic net income (loss) attributable to common stockholders per share is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding. The Company computes diluted net income per share under a two-class method where income is reallocated between common stock, potential common stock and participating securities. Diluted net income (loss) per share attributable to common stockholders adjusts the basic net income (loss) per share attributable to common stockholders and the weighted-average number of shares of common stock outstanding for the potentially dilutive impact of stock options using the treasury stock method. The following table sets forth the computation of the Company’s basic and diluted net loss per share attributable to common stockholders: For the three months ended March 31, (In thousands, except for share and per share values) 2024 2023 Numerator: Net loss $ (1,403) $ (18,867) Net loss attributable to common stockholders - basic and diluted $ (1,403) $ (18,867) Denominator: Weighted average shares of common stock outstanding - basic and diluted 96,273,168 93,106,075 Net loss per share, attributable to common shareholders: Basic and diluted $ (0.01) $ (0.20) The following potentially dilutive shares were excluded from the computation of diluted net income (loss) per share because including them would have been antidilutive: For the three months ended March 31, 2024 2023 Stock options to purchase common stock 13,161,255 14,784,486 Unvested restricted stock units 11,718,223 7,603,414 Employee stock purchase plan 71,142 39,157 Total 24,950,620 22,427,057 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes In determining quarterly provisions for income taxes, the Company uses the annual estimated effective tax rate applied to the actual year-to-date loss, adjusted for discrete items arising in that quarter. The Company’s annual estimated effective tax rate differs from the U.S. federal statutory rate of 21% primarily as a result of a valuation allowance against net deferred tax assets, stock-based compensation, state taxes, nondeductible executive compensation and other permanent differences. The Company has evaluated the available positive and negative evidence supporting the realization of its gross deferred tax assets, including cumulative losses, and the amount and timing of future taxable income, and has determined it is more likely than not that the assets will not be realized. Accordingly, the Company has recorded a full valuation allowance against the U.S. federal and state deferred tax assets as of each balance sheet date presented. During the three months ended March 31, 2024 and 2023, the Company has not recorded any uncertain tax positions and has not recognized interest or penalties in the condensed consolidated statements of comprehensive loss. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions In April 2020, the Company engaged Summit House Studios LLC, a third-party consultant, to provide digital ad production services. Summit House Studios LLC is owned by a major shareholder of the Company. Based on services provided, the Company did not incur any advertising costs for this related party during the three months ended March 31, 2024 and incurred an immaterial amount in the three months ended March 31, 2023, which is reported as marketing expense in the Company’s condensed consolidated statements of comprehensive loss. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Leases | Leases The Company’s lease portfolio includes both real estate and non-real estate type leases which are accounted for as either finance or operating leases. Real estate leases generally include office and warehouse facilities and non-real estate leases generally include office equipment and machinery. The Company determines if a contract is or contains a lease at inception. The Company’s leases have remaining lease terms of less than one The components of lease expense were as follows (in thousands): For the three months ended March 31, 2024 2023 Finance lease expense: Amortization $ 7 $ 16 Operating lease expense: Operating lease expense (1) 1,792 1,792 Sublease income (501) (501) Total lease expense, net $ 1,298 $ 1,307 ______________________ (1) Represents the straight-line lease expense of operating leases, inclusive of amortization of ROU assets and the interest component of operating lease liabilities. Based on the nature of the Right-Of-Use (“ROU”) assets, amortization of finance leases and amortization of operating ROU assets, operating lease expense and other lease expense are recorded within either cost of revenue or selling, general and administrative expenses and interest on finance lease liabilities is recorded within interest and other expense, net in the condensed consolidated statements of comprehensive loss. The following tables set forth the amount of lease assets and lease liabilities included in the Company’s condensed consolidated balance sheets (in thousands): Assets Financial Statement Line Item March 31, 2024 Finance lease assets Property and equipment, net $ 8 Operating lease assets Operating lease right-of-use asset 22,090 Total lease assets $ 22,098 Liabilities Current Finance lease liabilities Accrued expenses $ 13 Operating lease liabilities Accrued expenses 8,212 Non-current Operating lease liabilities Operating lease liabilities, net of current portion 19,642 Total lease liabilities $ 27,867 Supplemental information related to the Company’s leases for the three months ended March 31, 2024 was as follows: Weighted-average remaining lease term (in years) Finance leases 0.5 Operating leases 3.3 Weighted-average discount rate Finance leases 3.00 % Operating leases 2.29 % Cash paid for amounts included in the measurement of lease liabilities (in thousands) Operating cash flows used in operating leases $ 1,988 Finance cash flows used in finance leases $ 10 |
Leases | Leases The Company’s lease portfolio includes both real estate and non-real estate type leases which are accounted for as either finance or operating leases. Real estate leases generally include office and warehouse facilities and non-real estate leases generally include office equipment and machinery. The Company determines if a contract is or contains a lease at inception. The Company’s leases have remaining lease terms of less than one The components of lease expense were as follows (in thousands): For the three months ended March 31, 2024 2023 Finance lease expense: Amortization $ 7 $ 16 Operating lease expense: Operating lease expense (1) 1,792 1,792 Sublease income (501) (501) Total lease expense, net $ 1,298 $ 1,307 ______________________ (1) Represents the straight-line lease expense of operating leases, inclusive of amortization of ROU assets and the interest component of operating lease liabilities. Based on the nature of the Right-Of-Use (“ROU”) assets, amortization of finance leases and amortization of operating ROU assets, operating lease expense and other lease expense are recorded within either cost of revenue or selling, general and administrative expenses and interest on finance lease liabilities is recorded within interest and other expense, net in the condensed consolidated statements of comprehensive loss. The following tables set forth the amount of lease assets and lease liabilities included in the Company’s condensed consolidated balance sheets (in thousands): Assets Financial Statement Line Item March 31, 2024 Finance lease assets Property and equipment, net $ 8 Operating lease assets Operating lease right-of-use asset 22,090 Total lease assets $ 22,098 Liabilities Current Finance lease liabilities Accrued expenses $ 13 Operating lease liabilities Accrued expenses 8,212 Non-current Operating lease liabilities Operating lease liabilities, net of current portion 19,642 Total lease liabilities $ 27,867 Supplemental information related to the Company’s leases for the three months ended March 31, 2024 was as follows: Weighted-average remaining lease term (in years) Finance leases 0.5 Operating leases 3.3 Weighted-average discount rate Finance leases 3.00 % Operating leases 2.29 % Cash paid for amounts included in the measurement of lease liabilities (in thousands) Operating cash flows used in operating leases $ 1,988 Finance cash flows used in finance leases $ 10 |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2024 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring Transformation Initiative In 2023, the Company executed a broad-based Transformation Initiative designed to build the Honest brand and drive growth in higher-margin areas of the portfolio, strengthen the Company’s cost structure, drive focus on the most productive areas of the Company's business, deliver greater impact from brand-building investments, and improve executional excellence across the enterprise. The restructuring element of the Transformation Initiative was substantially completed by December 31, 2023. For the three months ended March 31, 2024, the Company did not incur any restructuring costs. Changes in accrued expenses as of March 31, 2024 relating to the Transformation Initiative were: Restructuring Costs Employee-Related Costs (1) Asset-Related Costs Contract Terminations Inventory Reserves Total Balance at December 31, 2023 $ 356 $ — $ — $ 2,581 $ 2,937 Charges (adjustments) — — — — — Cash payments (105) — — — (105) Non-cash asset write-offs — — — (2,098) (2,098) Balance at March 31, 2024 $ 251 $ — $ — $ 483 $ 734 ___________ (1) Included in accrued expenses as of March 31, 2024. Refer to Note 6, "Accrued Expenses" included elsewhere in these condensed consolidated financial statements. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On April 9, 2024 the Company issued a press release on Form 8-K announcing that the Company's Founder Jessica Warren has departed from her role as Chief Creative Officer. Ms. Warren will remain on the board of directors. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 31, 2023. The condensed consolidated financial statements are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on a basis consistent with that used to prepare the audited annual consolidated financial statements and include, in the opinion of management, all adjustments, consisting of normal recurring items, necessary for the fair statement of the condensed consolidated financial statements. The consolidated balance sheet as of December 31, 2023 has been derived from the audited financial statements at that date but does not include all of the disclosures required by GAAP. The condensed consolidated financial statements include the accounts of the Company, and its wholly owned subsidiaries after elimination of intercompany transactions and balances. |
Segment Reporting and Geographic Information | Segment Reporting and Geographic Information |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s estimates, which are subject to varying degrees of judgment, include the valuation of inventories, sales returns and allowances, allowances for credit losses, valuation of short-term investments, capitalized software, useful lives associated with long-lived assets, incremental borrowing rates associated with leases, valuation allowances with respect to deferred tax assets, accruals and contingencies, recoverability of non-cash marketing credits, recoverability of goodwill and long-lived assets, and the valuation and assumptions underlying stock-based compensation. On an ongoing basis, the Company evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities. The Company assessed certain accounting matters and estimates that generally require consideration of forecasted information in context with the information reasonably available to the Company as of March 31, 2024 and through the date these condensed consolidated financial statements were issued. Management is not aware of any specific event or circumstance that would require an update to estimates or judgments or a revision to the carrying value of assets or liabilities. However, these estimates and judgments may change as new events occur and additional information is obtained, which may result in changes being recognized in the Company’s consolidated financial statements in future periods. |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Accounts Receivable | Accounts Receivable |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses the following hierarchy in measuring the fair value of the Company’s assets and liabilities, focusing on the most observable inputs when available: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than Level 1 quoted prices, such as quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active for identical or similar assets and liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Valuations are based on inputs that are unobservable and significant to the overall fair value measurement of the assets or liabilities. Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Fair value is based on quoted market prices, if available. If listed prices or quotes are not available, fair value is based on internally developed models that primarily use market-based or independently sourced market parameters as inputs. Cash equivalents, consisting primarily of money market funds, represent highly liquid investments with maturities of three months or less at purchase. Market prices, which are Level 1 in the fair value hierarchy, are used to determine the fair value of the money market funds. Investments in debt securities are measured using broker provided indicative prices developed using observable market data, which are considered Level 2 in the fair value hierarchy. Certain assets, including long-lived assets, goodwill and intangible assets are also subject to measurement at fair value on a non-recurring basis if they are deemed to be impaired as a result of an impairment review. The fair value is measured using Level 3 inputs in the fair value hierarchy. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements As an “emerging growth company,” the Jumpstart Our Business Startups Act allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use the adoption dates applicable to private companies. As a result, the Company’s financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies. Recently Issued Accounting Pronouncements – Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in the ASU require that a public entity discloses, on an annual and interim basis, significant segment expenses that are regularly provided to an entity's chief operating decision maker (“CODM”), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Retrospective application is required for all prior periods presented, and early adoption is permitted. The Company does not expect the adoption of ASU No. 2023-07 to have a material impact on the Company’s consolidated financial statements or disclosures. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes: Improvements to Income Tax Disclosures. This guidance requires consistent categories and greater disaggregation of information in the rate reconciliation and disclosures of income taxes paid by jurisdiction. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2024. The Company does not expect the adoption of ASU No. 2023-09 to have a material impact on the Company’s consolidated financial statements or disclosures. |
Direct-to-Consumer and Retail and Third-Party Ecommerce | Direct-to-Consumer For direct sales to the consumer through the Company's website, Honest.com, the Company's performance obligation consists of the sale of finished goods to the consumer. Consumers may purchase products at any time or enter into subscription arrangements. Consumers place orders online in accordance with the Company's standard terms and conditions and authorize payment when the order is placed. Credit cards are charged at the time of shipment and payments are typically processed within two to three business days. For subscription arrangements, consumers sign up to receive products on a periodic basis. Subscriptions are cancellable at any time without penalty, and no amounts are collected from the consumer until products are shipped. Revenue is recognized when transfer of control to the consumer takes place, which is when the product is delivered to the carrier. Sales taxes collected from consumers are accounted for on a net basis and are excluded from revenue. During the three months ended March 31, 2024 and 2023, 15% and 18% of the Company's revenue was generated from Honest.com, respectively. Retail and Third-Party Ecommerce For retail and third-party ecommerce sales, the Company's performance obligation consists of the sale of finished goods to retailers and third-party ecommerce customers. Revenue is recognized when control of the promised goods is transferred to those customers at time of shipment or delivery, depending on the contract terms. After the completion of the performance obligation, the Company has the right to consideration as outlined in the contract. Payment terms vary among the retail and third-party ecommerce customers although terms generally include a requirement of payment within 30 to 45 days of product shipment. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | Financial assets measured and recorded at fair value on a recurring basis consist of the following as of: March 31, 2024 Level 1 Level 2 Level 3 Total (In thousands) Cash equivalents Money market funds $ 5,662 $ — $ — $ 5,662 Total cash equivalents $ 5,662 $ — $ — $ 5,662 December 31, 2023 Level 1 Level 2 Level 3 Total (In thousands) Cash equivalents Money market funds $ 5,589 $ — $ — $ 5,589 Total cash equivalents $ 5,589 $ — $ — $ 5,589 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following: March 31, 2024 December 31, 2023 (In thousands) Payroll and payroll related expenses (1) $ 4,132 $ 8,007 Accrued inventory purchases 6,125 9,368 Accrued returns 238 269 Accrued rent (2) 8,212 8,105 Accrued restructuring (3) 251 356 Other accrued expenses 7,458 6,104 Total accrued expenses $ 26,416 $ 32,209 ____________________ (1) Includes $0.9 million and $1.2 million of Chief Executive Officer and Chief Financial Officer executive transition related expenses as of March 31, 2024 and December 31, 2023, respectively. (2) Represents short-term operating lease liabilities. Refer to Note 12, "Leases" included in these condensed consolidated financial statements for more information on leases. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | The following table summarizes the stock option activity: Number of Options Weighted Average Exercise Price Outstanding at December 31, 2023 13,315,796 $ 5.25 Granted — $ — Exercised (126,000) $ 4.03 Forfeited/Cancelled (28,541) $ 5.32 Outstanding at March 31, 2024 13,161,255 $ 5.26 |
Schedule of Restricted Stock Unit Activity | The following table summarizes the RSU activity: Number of Shares Weighted Average Grant Date Fair Value Per Share Non-Employee Directors Directors, Officers and Employees Non-Employee Directors Directors, Officers and Employees Unvested RSUs at December 31, 2023 957,199 7,299,254 $ 2.19 $ 2.38 Granted 60,626 4,616,500 $ 3.30 $ 3.51 Vested (15,156) (1,159,126) $ 3.30 $ 2.35 Forfeited — (41,074) $ — $ 2.29 Unvested RSUs at March 31, 2024 1,002,669 10,715,554 $ 2.24 $ 2.87 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The following table summarizes the key input assumptions used in the Black-Scholes option-pricing model to estimate the grant-date fair value of the 2021 ESPP: For the three months ended March 31, 2024 Expected life of options (in years) 0.50 Expected stock price volatility 69.20 % — 86.19% Risk free interest rate 5.36 % — 5.43% Expected dividend yield —% Weighted average grant-date fair value per share $ 0.56 — $0.67 |
Stock-based Compensation Expense | Stock-based compensation expense related to RSU awards, 2021 ESPP purchases and stock options, as applicable, are as follows: For the three months ended March 31, 2024 2023 (In thousands) Selling, general and administrative $ 2,413 $ 3,713 Research and development 110 59 Total stock-based compensation expense $ 2,523 $ 3,772 |
Net Income (Loss) per Share A_2
Net Income (Loss) per Share Attributable to Common Stockholders (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of the Company’s basic and diluted net loss per share attributable to common stockholders: For the three months ended March 31, (In thousands, except for share and per share values) 2024 2023 Numerator: Net loss $ (1,403) $ (18,867) Net loss attributable to common stockholders - basic and diluted $ (1,403) $ (18,867) Denominator: Weighted average shares of common stock outstanding - basic and diluted 96,273,168 93,106,075 Net loss per share, attributable to common shareholders: Basic and diluted $ (0.01) $ (0.20) |
Schedule of Potentially Dilutive Shares | The following potentially dilutive shares were excluded from the computation of diluted net income (loss) per share because including them would have been antidilutive: For the three months ended March 31, 2024 2023 Stock options to purchase common stock 13,161,255 14,784,486 Unvested restricted stock units 11,718,223 7,603,414 Employee stock purchase plan 71,142 39,157 Total 24,950,620 22,427,057 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Lease, Cost | The components of lease expense were as follows (in thousands): For the three months ended March 31, 2024 2023 Finance lease expense: Amortization $ 7 $ 16 Operating lease expense: Operating lease expense (1) 1,792 1,792 Sublease income (501) (501) Total lease expense, net $ 1,298 $ 1,307 ______________________ |
Assets and Liabilities, Lessee | The following tables set forth the amount of lease assets and lease liabilities included in the Company’s condensed consolidated balance sheets (in thousands): Assets Financial Statement Line Item March 31, 2024 Finance lease assets Property and equipment, net $ 8 Operating lease assets Operating lease right-of-use asset 22,090 Total lease assets $ 22,098 Liabilities Current Finance lease liabilities Accrued expenses $ 13 Operating lease liabilities Accrued expenses 8,212 Non-current Operating lease liabilities Operating lease liabilities, net of current portion 19,642 Total lease liabilities $ 27,867 Supplemental information related to the Company’s leases for the three months ended March 31, 2024 was as follows: Weighted-average remaining lease term (in years) Finance leases 0.5 Operating leases 3.3 Weighted-average discount rate Finance leases 3.00 % Operating leases 2.29 % Cash paid for amounts included in the measurement of lease liabilities (in thousands) Operating cash flows used in operating leases $ 1,988 Finance cash flows used in finance leases $ 10 |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Reserve by Type of Cost | Changes in accrued expenses as of March 31, 2024 relating to the Transformation Initiative were: Restructuring Costs Employee-Related Costs (1) Asset-Related Costs Contract Terminations Inventory Reserves Total Balance at December 31, 2023 $ 356 $ — $ — $ 2,581 $ 2,937 Charges (adjustments) — — — — — Cash payments (105) — — — (105) Non-cash asset write-offs — — — (2,098) (2,098) Balance at March 31, 2024 $ 251 $ — $ — $ 483 $ 734 ___________ |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 USD ($) segment | Dec. 31, 2023 USD ($) | |
Accounting Policies [Abstract] | ||
Number of operating segments | segment | 1 | |
Allowance for doubtful accounts | $ | $ 0.4 | $ 0.4 |
Revenue (Details)
Revenue (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 86,217,000 | $ 83,388,000 |
Cost of revenue | $ 54,335,000 | $ 63,186,000 |
Revenue from Contract with Customer Benchmark | Customer Concentration Risk | Direct To Consumer | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk, percentage | 15% | 18% |
Trade Agreements | ||
Disaggregation of Revenue [Line Items] | ||
Marketing credits, usage period | 4 years | |
Marketing credits, option to extend | 2 years | |
Revenue | $ 0 | $ 0 |
Cost of revenue | 0 | $ 0 |
Impairment | 0 | |
Transportation credit used | $ 19,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 5,662 | $ 5,589 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 5,662 | 5,589 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 5,662 | 5,589 |
Level 1 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 5,662 | 5,589 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Level 2 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Level 3 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 0 | $ 0 |
Credit Facilities (Details)
Credit Facilities (Details) - 2023 Credit Facility - USD ($) | 1 Months Ended | |
Jan. 31, 2023 | Mar. 31, 2024 | |
Revolving Credit Facility | Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Maximum issuance of letters of credit | $ 35,000,000 | |
Line of credit facility, accordion feature, increase limit | 35,000,000 | |
Line of credit facility, accordion feature, higher borrowing capacity | $ 70,000,000 | |
Letters of credit outstanding | $ 3,700,000 | |
Letters of credit available to be drawn | 17,700,000 | |
Secured overnight financing rate floor | 0% | |
Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) | Line of Credit | Minimum | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, basis spread on variable rate plus (minus) | 1.50% | |
Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) | Line of Credit | Maximum | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, basis spread on variable rate plus (minus) | 2.25% | |
Revolving Credit Facility | Prime Rate | Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, basis spread on variable rate plus (minus) | 0.25% | |
Revolving Credit Facility | Prime Rate | Line of Credit | Minimum | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, basis spread on variable rate plus (minus) | (0.25%) | |
Revolving Credit Facility | Prime Rate | Line of Credit | Maximum | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, basis spread on variable rate plus (minus) | (0.50%) | |
Revolving Credit Facility | CB floating rate | ||
Line of Credit Facility [Line Items] | ||
Interest rate base | 2.50% | |
Letter of Credit | Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Maximum issuance of letters of credit | $ 15,000,000 | |
Outstanding borrowings | $ 0 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Schedule of Payables and Accruals [Line Items] | ||
Payroll and payroll related expenses | $ 4,132 | $ 8,007 |
Accrued inventory purchases | 6,125 | 9,368 |
Accrued returns | 238 | 269 |
Accrued rent | 8,212 | 8,105 |
Accrued restructuring | 251 | 356 |
Other accrued expenses | 7,458 | 6,104 |
Total accrued expenses | 26,416 | 32,209 |
Chief Executive Officer | ||
Schedule of Payables and Accruals [Line Items] | ||
Payroll and payroll related expenses | $ 900 | |
Chief Financial Officer | ||
Schedule of Payables and Accruals [Line Items] | ||
Payroll and payroll related expenses | $ 1,200 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Number of Options | |
Options outstanding, beginning balance (in shares) | shares | 13,315,796 |
Granted (in shares) | shares | 0 |
Exercised (in shares) | shares | (126,000) |
Forfeited/Cancelled (in shares) | shares | (28,541) |
Options outstanding, ending balance (in shares) | shares | 13,161,255 |
Weighted Average Exercise Price | |
Weighted-average exercise price, beginning balance (in dollars per share) | $ / shares | $ 5.25 |
Weighted-average exercise price, granted (in dollars per share) | $ / shares | 0 |
Weighted-average exercise price, exercised (in dollars per share) | $ / shares | 4.03 |
Weighted-average exercise price, forfeited/cancelled (in dollars per share) | $ / shares | 5.32 |
Weighted-average exercise price, ending balance (in dollars per share) | $ / shares | $ 5.26 |
Stock-Based Compensation - 2021
Stock-Based Compensation - 2021 Equity Incentive Plan (Details) - 2021 Equity Incentive Plan - shares | 1 Months Ended | |
Apr. 30, 2021 | Jan. 01, 2024 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Maximum number of shares that may be issued (in shares) | 25,025,580 | |
Period to increase available shares for issuance | 10 years | |
Percentage of total number of shares outstanding | 4% | |
Number of common stock authorized to be issued (in shares) | 3,825,379 | |
Incentive Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Maximum number of shares that may be issued (in shares) | 75,100,000 |
Stock-Based Compensation - RSU
Stock-Based Compensation - RSU Awards (Details) - Unvested restricted stock units | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Non-Employee Directors | |
Number of Shares | |
Unvested RSUs, beginning balance (in shares) | shares | 957,199 |
Granted (in shares) | shares | 60,626 |
Vested (in shares) | shares | (15,156) |
Forfeited (in shares) | shares | 0 |
Unvested RSUs, ending balance (in shares) | shares | 1,002,669 |
Weighted Average Grant Date Fair Value Per Share | |
Unvested RSUs, beginning balance (in dollars per share) | $ / shares | $ 2.19 |
Granted (in dollars per share) | $ / shares | 3.30 |
Vested (in dollars per share) | $ / shares | 3.30 |
Forfeited (in dollars per share) | $ / shares | 0 |
Unvested RSUs, ending balance (in dollars per share) | $ / shares | $ 2.24 |
Directors, Officers and Employees | |
Number of Shares | |
Unvested RSUs, beginning balance (in shares) | shares | 7,299,254 |
Granted (in shares) | shares | 4,616,500 |
Vested (in shares) | shares | (1,159,126) |
Forfeited (in shares) | shares | (41,074) |
Unvested RSUs, ending balance (in shares) | shares | 10,715,554 |
Weighted Average Grant Date Fair Value Per Share | |
Unvested RSUs, beginning balance (in dollars per share) | $ / shares | $ 2.38 |
Granted (in dollars per share) | $ / shares | 3.51 |
Vested (in dollars per share) | $ / shares | 2.35 |
Forfeited (in dollars per share) | $ / shares | 2.29 |
Unvested RSUs, ending balance (in dollars per share) | $ / shares | $ 2.87 |
Stock-Based Compensation - RS_2
Stock-Based Compensation - RSU Awards Narrative (Details) - Unvested restricted stock units $ in Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized stock-based compensation expense | $ 30.5 |
Period for recognition | 3 years 1 month 6 days |
Stock-Based Compensation - 20_2
Stock-Based Compensation - 2021 Employee Stock Purchase Plan (Details) - shares | 1 Months Ended | 3 Months Ended | |
Apr. 30, 2021 | Mar. 31, 2024 | Jan. 01, 2024 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Offering period | 6 months | ||
Employee stock purchase plan | 2021 Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of common stock authorized to be issued (in shares) | 1,175,000 | 956,344 | |
Period to increase available shares for issuance | 10 years | ||
Percentage of total number of shares outstanding | 1% | ||
Additional shares authorized (in shares) | 3,525,000 | ||
Purchase price of common stock in percent | 85% | ||
Shares issued through ESPP (in shares) | |||
Number of shares available for purchase (in shares) | 3,712,738 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) - Options | 3 Months Ended |
Mar. 31, 2024 $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected life of options (in years) | 6 months |
Expected stock price volatility, minimum | 69.20% |
Expected stock price volatility, maximum | 86.19% |
Risk free interest rate, minimum | 5.36% |
Risk free interest rate, maximum | 5.43% |
Expected dividend yield | 0% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average grant-date fair value per share (in dollars per share) | $ 0.56 |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average grant-date fair value per share (in dollars per share) | $ 0.67 |
Stock-Based Compensation - 2023
Stock-Based Compensation - 2023 Inducement Plan (Details) - 2023 Inducement Plan - shares | Mar. 31, 2024 | Mar. 31, 2023 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of common stock authorized to be issued (in shares) | 4,000,000 | |
Number of shares available for purchase (in shares) | 275,083 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 2,523 | $ 3,772 |
Selling, general and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 2,413 | 3,713 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 110 | $ 59 |
Net Income (Loss) per Share A_3
Net Income (Loss) per Share Attributable to Common Stockholders - Computation of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Numerator: | ||
Net loss | $ (1,403) | $ (18,867) |
Net loss attributable to common stockholders - basic | (1,403) | (18,867) |
Net loss attributable to common stockholders - diluted | $ (1,403) | $ (18,867) |
Denominator: | ||
Weighted average shares of common stock outstanding - basic (in shares) | 96,273,168 | 93,106,075 |
Weighted average shares of common stock outstanding - diluted (in shares) | 96,273,168 | 93,106,075 |
Net loss per share, attributable to common shareholders: | ||
Basic (in dollars per share) | $ (0.01) | $ (0.20) |
Diluted (in dollars per share) | $ (0.01) | $ (0.20) |
Net Income (Loss) per Share A_4
Net Income (Loss) per Share Attributable to Common Stockholders - Potentially Dilutive Shares Excluded From Computation of Diluted Net Income (Loss) Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 24,950,620 | 22,427,057 |
Stock options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 13,161,255 | 14,784,486 |
Unvested restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 11,718,223 | 7,603,414 |
Employee stock purchase plan | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 71,142 | 39,157 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Uncertain tax positions | $ 0 | $ 0 |
Interest and penalties expense | $ 0 | $ 0 |
Leases - Additional Information
Leases - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Lessee, Lease, Description [Line Items] | |
Non-cash ROU assets obtained in exchange for finance lease liabilities | $ 0 |
Non-cash ROU assets obtained in exchange for operating lease liabilities | $ 0 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, remaining lease term | 1 year |
Lessee, finance lease, remaining lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, remaining lease term | 6 years 6 months |
Lessee, finance lease, remaining lease term | 6 years 6 months |
Leases - Summary of Lease Cost
Leases - Summary of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Leases [Abstract] | ||
Amortization | $ 7 | $ 16 |
Operating lease expense | 1,792 | 1,792 |
Sublease income | (501) | (501) |
Total lease expense, net | $ 1,298 | $ 1,307 |
Leases - Summary of Assets and
Leases - Summary of Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Assets | |||
Finance lease, right-of-use asset, statement of financial position | Property and equipment, net | ||
Finance lease assets | $ 8 | ||
Operating lease assets | 22,090 | $ 23,683 | |
Total lease assets | $ 22,098 | ||
Current | |||
Finance lease, liability, current, statement of financial position | Accrued Liabilities, Current | ||
Finance lease liabilities | $ 13 | ||
Operating lease, liability, current, statement of financial position | Accrued Liabilities, Current | ||
Operating lease liabilities | $ 8,212 | 8,105 | |
Non-current | |||
Operating lease liabilities, net of current portion | 19,642 | $ 21,738 | |
Total lease liabilities | $ 27,867 | ||
Weighted-average remaining lease term (in years) | |||
Finance leases | 6 months | ||
Operating leases | 3 years 3 months 18 days | ||
Weighted-average discount rate | |||
Finance leases | 3% | ||
Operating leases | 2.29% | ||
Cash paid for amounts included in the measurement of lease liabilities (in thousands) | |||
Operating cash flows used in operating leases | $ 1,988 | ||
Finance cash flows used in finance leases | $ 10 | $ 15 |
Restructuring - Reserve (Detail
Restructuring - Reserve (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Transformation Initiative | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2023 | $ 2,937 |
Restructuring | 0 |
Cash payments | (105) |
Non-cash asset write-offs | (2,098) |
Balance at March 31, 2024 | 734 |
Employee-Related Costs | |
Restructuring Reserve [Roll Forward] | |
Balance at March 31, 2024 | 300 |
Employee-Related Costs | Transformation Initiative | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2023 | 356 |
Restructuring | 0 |
Cash payments | (105) |
Non-cash asset write-offs | 0 |
Balance at March 31, 2024 | 251 |
Asset-Related Costs | Transformation Initiative | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2023 | 0 |
Restructuring | 0 |
Cash payments | 0 |
Non-cash asset write-offs | 0 |
Balance at March 31, 2024 | 0 |
Contract Terminations | Transformation Initiative | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2023 | 0 |
Restructuring | 0 |
Cash payments | 0 |
Non-cash asset write-offs | 0 |
Balance at March 31, 2024 | 0 |
Inventory Reserves | Transformation Initiative | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2023 | 2,581 |
Restructuring | 0 |
Cash payments | 0 |
Non-cash asset write-offs | (2,098) |
Balance at March 31, 2024 | $ 483 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) $ in Millions | Mar. 31, 2024 USD ($) |
Employee-Related Costs | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring reserve | $ 0.3 |