HNSTThe glow-up is real, even if sales look weird at first
Honest just handed in its Q1 2026 report card, and it’s one of those earnings releases where the headline number looks rough until you read the fine print. Revenue fell 19.7% to $78.1 million, which sounds like the kind of print that makes investors reach for the caffeine. But strip out the company’s “Powering Honest Growth” exits, and organic revenue actually rose 3.9%.
Profitability got the main-character treatment
The bigger story is margin. Gross margin hit a record 42.6%, up 390 basis points from last year, while adjusted gross margin climbed to 43.5%. That’s the kind of improvement that says the company is squeezing more juice out of every dollar it sells — always a better look than chasing growth at any cost.
- Net loss was basically a rounding error at less than $0.1 million
- Adjusted net income came in at $1.3 million
- Adjusted EBITDA was $4.0 million, down $3.0 million year over year
- Cash and cash equivalents rose to $90.4 million
Why investors should care
This is Honest trying to prove it can be smaller, cleaner, and more profitable all at once. Management said the reset is transforming the company into something more strategically focused and structurally profitable, which is corporate-speak for: we’re trying to stop doing stuff that looks busy but doesn’t help the bottom line.
The catch? Revenue is still shrinking on a reported basis, so the market will likely care a lot about whether the organic growth story can keep going without margin getting bullied again.
Big picture: Honest is still in the awkward middle of its turnaround — the part where the haircut looks intentional, but you’re not fully convinced until the mirror shows better results for a few more quarters.