The Honest Company, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the Honest Company's fourth quarter 2023 earnings call. At this time, all participants are on listen-only mode. After the speaker's presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I will now turn the conference over to your host, Ms. Elizabeth Bucard, Senior Director, Investor Relations at the Honest Company. Please go ahead.

Good afternoon, everyone, and thank you for joining our fourth quarter 2023 conference call. Joining me today are Carla Vernon, our Chief Executive Officer, Dave Loretta, our Chief Financial Officer, and Kate Barton, our Chief Growth Officer. Before we start, I would like to remind you that we will make certain statements today that are forward-looking, within the meaning of the federal securities laws, including statements about the outlook of our business and other matters referenced in our earnings release issued today. These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially. Please refer to our earnings release issued today as well as our FCC filings for a more detailed description of the risk factors that may affect our results. Please also note that these forward-looking statements reflect our opinions only. as of the date of this call, and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events, except as required by law. Also during this call, we will discuss non-GAAP financial measures, which adjust our GAAP results to eliminate the impact of certain items. you will find additional information regarding these non-GAAP financial measures and a reconciliation of these non-GAAP to GAAP measures in the financial results section of today's earnings release. A live broadcast of this call is also available on the investor relations section of our website at investors.honest.com. With that, I'll turn it over to Carla.

Thanks, Elizabeth. Good afternoon, everyone, and thank you for joining us today. On today's call, we hope to achieve several objectives. First, we're excited to share our successful results for the fourth quarter and details on key financial milestones that leave us strengthened as we close out 2023. Second, we will share our outlook for 2024 And third, we will provide our new long-range financial algorithm and a strategic update detailing the differentiated attributes of our company and key drivers for our long-term growth. To complement our discussion today, please find our new investor presentation available on Honest's investor relations website. As I round the corner on my first year as CEO of The Honest Company, I'm extremely proud of the results we will share today, but I must acknowledge that 2023 has been a year of tremendous change. As I mentioned when I was with you a year ago, we were not satisfied with our past results. We were a company in need of a transformation and our teams quickly went into action to define our transformation initiative and a new operating mindset. As a result of these efforts, we strengthened our business performance, our team culture, and our financial results. These 2023 improvements include expanding our gross margins by 930 basis points since Q1, doubling our cash position year over year, and achieving a major milestone in the fourth quarter by delivering positive adjusted EBITDA and positive net income we expanded margins and achieved our profitability goal while also driving double-digit top-line growth in the quarter but among our most meaningful accomplishments this year is the way our honest team collaborated to drive focus clarity and alignment on our ambitious business goals so i want to take a moment to thank our entire honest team for the remarkable ways that they strengthened our culture and delivered and even exceeded their commitments this year. Our transformation initiative pillars of brand maximization, margin enhancement, and operating discipline have each contributed meaningfully to our business model improvements. We exited 2023 with growth in both units and dollar sales, strong marketing efficiency, a healthier balance sheet, and a clear path to ongoing profitability. And our brand continues to grow in relevance and scale, as shown by the growth of our household penetration, which has now crossed the threshold of 5%. I'm confident that with our stronger foundation, growing consumer residents, and a clear vision for the future, we will continue to advance honest mission is a personal care company that courageously challenges ingredients, ideals, and industries through the power of our brand, our team, and our honest standard. And now, I'll turn it over to Dave to share the financial details of our strong fourth quarter and our 2024 outlook.