The Honest Company (NASDAQ: HNST) saw its stock plunge 5.8% in after-hours trading on Wednesday, despite reporting strong financial results for the fourth quarter and full year 2024.

In Q4 2024, the personal care company achieved record quarterly revenue of $100 million, an 11% increase from the prior year. Gross margin expanded significantly by 530 basis points to 39%, driven by cost savings and higher sales volume. Adjusted EBITDA was positive at $9 million, improving by $4 million year-over-year.

For the full year 2024, Honest Company's revenue grew 10% to $378 million, surpassing its outlook range. Gross margin expanded by a remarkable 900 basis points to 38.2%, reflecting cost savings, price increases, and efficient trade spend. The company reported its first full year of positive adjusted EBITDA as a public company at $26 million, compared to negative $11 million in 2023.