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Revenue has contracted for four consecutive quarters, deepening to -19.7% year-over-year in 2026Q1, while gross margin has volatilely recovered to 48.4% in 2026Q2 from a depressed 15.7% in 2025Q4, suggesting cost normalization rather than pricing power.
The Honest Company, Inc. (HNST) annual income statement — 7-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 |
|---|
| Sales/Revenue | 342.01M | 371.32M | 378.34M | 344.37M | 313.65M | 318.64M | 300.52M | 235.59M |
| Revenue Growth % | -12.26% | -1.86% | 9.87% | 9.79% | -1.57% | 6.03% | 27.56% | - |
| Cost of Goods Sold | 220.05M | 247.56M | 233.68M | 243.83M | 221.34M | 209.47M | 192.63M | 159.73M |
| COGS % of Revenue | - | 66.67% | 61.77% | 70.81% | 70.57% | 65.74% | 64.1% | 67.8% |
| Gross Profit | 121.96M | 123.75M | 144.66M | 100.53M | 92.31M | 109.17M | 107.9M | 75.85M |
| Gross Margin % | 35.66% | 33.33% | 38.23% | 29.19% | 29.43% | 34.26% | 35.9% | 32.2% |
| Gross Profit Growth % | - | -14.45% | 43.89% | 8.9% | -15.44% | 1.18% | 42.24% | - |
| Operating Expenses | 132.74M | 142.22M | 150.99M | 139.44M | 142.09M | 146M | 121.44M | 107.31M |
| OpEx % of Revenue | - | 38.3% | 39.91% | 40.49% | 45.3% | 45.82% | 40.41% | 45.55% |
| Selling, General & Admin | 96.93M | 130.71M | 144.14M | 131.02M | 135.1M | 138.32M | 115.73M | 102.17M |
| SG&A % of Revenue | - | 35.2% | 38.1% | 38.05% | 43.07% | 43.41% | 38.51% | 43.37% |
| Research & Development | 7.12M | 7.35M | 6.85M | 6.21M | 7M | 7.68M | 5.71M | 5.14M |
| R&D % of Revenue | - | 1.98% | 1.81% | 1.8% | 2.23% | 2.41% | 1.9% | 2.18% |
| Other Operating Expenses | 2M | 4.16M | 0 | 2.21M | 0 | 0 | 0 | 0 |
| Operating Income | -10.78M | -18.46M | -6.33M | -38.91M | -49.78M | -36.83M | -13.54M | -31.46M |
| Operating Margin % | -3.15% | -4.97% | -1.67% | -11.3% | -15.87% | -11.56% | -4.51% | -13.35% |
| Operating Income Growth % | - | -191.6% | 83.73% | 21.84% | -35.18% | -171.98% | 56.96% | - |
| EBITDA | 316K | -8.91M | 2.96M | -36.17M | -40.85M | -32.68M | -8.69M | -23.79M |
| EBITDA Margin % | 0.09% | -2.4% | 0.78% | -10.5% | -13.02% | -10.26% | -2.89% | -10.1% |
| EBITDA Growth % | -98.15% | -401.45% | 108.17% | 11.45% | -24.99% | -276.24% | 63.48% | - |
| D&A (Non-Cash Add-back) | 11.09M | 9.55M | 9.29M | 2.74M | 8.93M | 4.15M | 4.85M | 7.67M |
| EBIT | -11.27M | -12.5M | -6.05M | -38.89M | -48.91M | -36.85M | -13.54M | -31.46M |
| Net Interest Income | 515K | -2.98M | 508K | -269K | 494K | -1.75M | -837K | 0 |
| Interest Income | 1.18M | 0 | 508K | 0 | 494K | 0 | 0 | 0 |
| Interest Expense | 663K | 2.98M | 0 | 269K | 0 | 1.75M | 837K | 0 |
| Other Income/Expense | -1.16M | 2.98M | 282K | -254K | 871K | -1.78M | -837K | 429K |
| Pretax Income | -11.94M | -15.48M | -6.05M | -39.16M | -48.91M | -38.6M | -14.38M | -31.03M |
| Pretax Margin % | -3.49% | -4.17% | -1.6% | -11.37% | -15.59% | -12.11% | -4.78% | -13.17% |
| Income Tax | 230K | 204K | 75K | 75K | 110K | 77K | 89K | 55K |
| Effective Tax Rate % | -1.93% | -1.32% | -1.24% | -0.19% | -0.22% | -0.2% | -0.62% | -0.18% |
| Net Income | -12.17M | -15.69M | -6.12M | -39.24M | -49.02M | -38.68M | -14.47M | -31.08M |
| Net Margin % | -3.56% | -4.22% | -1.62% | -11.39% | -15.63% | -12.14% | -4.81% | -13.19% |
| Net Income Growth % | -287.78% | -156.14% | 84.39% | 19.95% | -26.73% | -167.38% | 53.46% | - |
| Net Income (Continuing) | -12.17M | -15.69M | -6.12M | -39.24M | -49.02M | -38.68M | -14.47M | -31.08M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | -0.11 | -0.14 | -0.06 | -0.42 | -0.53 | -0.54 | -0.16 | -0.34 |
| EPS Growth % | -296.71% | -129.13% | 85.45% | 20.75% | 1.85% | -237.5% | 52.94% | - |
| EPS (Basic) | - | -0.14 | -0.06 | -0.42 | -0.53 | -0.54 | -0.16 | -0.34 |
| Diluted Shares Outstanding | 113.11M | 111.21M | 100.25M | 94.52M | 92.2M | 71.13M | 90.19M | 90.19M |
| Basic Shares Outstanding | 110.73M | 111.21M | 100.25M | 94.52M | 92.2M | 71.13M | 90.19M | 90.19M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - |
Quick answers to the most common questions about buying HNST stock.
For fiscal year 2025, The Honest Company, Inc. (HNST) reported total revenue of $371.3M. This represents a 57.6% increase compared to $235.6M in 2019.
The Honest Company, Inc. (HNST) reported a net loss of $15.7M for the fiscal year ending 2025.
The Honest Company, Inc. (HNST) reported an operating income of $-18.5M, resulting in an operating profit margin of -5.0%. This margin reflects the operational efficiency of the business before interest and taxes.
The Honest Company, Inc. (HNST) generated $123.8M in gross profit for the year, representing a gross profit margin of 33.3%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Sustained revenue contraction
Metrics are mathematically derived from official filings.
Revenue Contraction Accelerates
The Honest Company's top line has contracted for four consecutive quarters, with the decline deepening to -19.7% year-over-year in 2026Q1, suggesting significant market share loss or category headwinds.
The revenue trajectory has deteriorated sharply from positive growth in early 2024 to a consistent and accelerating decline. This pattern indicates the company is facing fundamental demand challenges, not just cyclical softness. The sustained negative growth suggests the business is shrinking in real terms, which pressures all other income statement lines.
Volatile Gross Margin Recovery
Gross margin swung from a severely depressed 15.7% in 2025Q4 to a robust 48.4% in 2026Q2, a recovery that appears driven by cost normalization rather than pricing power, given the concurrent revenue decline.
The extreme margin volatility, particularly the collapse in 2025Q4, points to significant operational or inventory-related disruptions. While the recent rebound to 48.4% is a positive signal, it is occurring against a backdrop of falling sales, which raises questions about its sustainability. The margin recovery may reflect one-time benefits or cost cuts rather than a structural improvement in the company's competitive position.
SG&A Discipline Drives Operating Leverage
Operating income swung to $9.6M in 2026Q2 as SG&A was slashed to $15.0M from $32.0M a year prior, demonstrating powerful operating leverage from aggressive overhead reduction.
The company has achieved a dramatic improvement in operating leverage by cutting SG&A by more than half year-over-year. This suggests a major restructuring or cost-containment initiative is underway. However, the durability of this leverage is questionable if revenue continues to decline, as further cuts may become increasingly difficult without impairing core operations.
EPS Volatility and SBC Impact
Diluted EPS surged to $0.09 in 2026Q2 from a loss, but this was aided by a $5.5M stock-based compensation charge, which appears as a non-cash add-back in some contexts, warranting scrutiny of true cash earnings.
The reported EPS improvement is substantial, but the quality of earnings is mixed. The significant stock-based compensation expense, which was zero in several prior quarters, dilutes shareholders and represents a real economic cost. The swing from a net loss to a profit is encouraging, but investors should assess whether this is driven by sustainable operational improvements or one-time accounting benefits.
Aggressive Cost Restructuring
Total operating expenses were cut by 54% year-over-year in 2026Q2, with SG&A reduced to $15.0M from $32.0M, indicating a severe and likely disruptive cost-cutting program.
The magnitude of the SG&A reduction is extreme and suggests a fundamental re-engineering of the company's cost structure. While this has restored near-term profitability, such deep cuts often involve significant workforce reductions, marketing pullbacks, or other actions that could harm long-term brand health and growth prospects. The sustainability of this lean cost base is a key question.
Profitability on a Shrinking Base
The recent return to profitability is built on a foundation of severe revenue contraction, raising the risk that cost cuts are masking a deteriorating core business that may not be viable at its current scale.
A short-seller would focus on the fact that HNST is achieving positive operating income only by drastically reducing its cost structure while its top line is in freefall. The 2026Q2 operating margin of 11.5% is impressive but is calculated on a revenue base that has shrunk by nearly 20% year-over-year. If the revenue decline continues, the company may soon exhaust its cost-cutting options, potentially leading to a return to losses.