Hims & Hers Just Posted 49% Growth, and the Margins Are the Price of Admission

Hims & Hers Health posted $890.4 million in third-quarter revenue on Monday, up 49 percent year-over-year, with Chief Financial Officer Yemi Okupe calling it the company's "second consecutive quarter of acceleration." The split tells the real story: domestic revenue grew a respectable 21 percent, while international revenue, still a small slice of the business, grew more than 300 percent as the brand pushes its subscription model into new markets.

That growth came at a cost. Gross margin fell to 57 percent from 74 percent a year earlier, and the company posted a net loss of $33.0 million against adjusted EBITDA of $82.4 million. Subscribers climbed 13 percent to roughly 2.79 million, but Hims & Hers also trimmed its full-year adjusted EBITDA guidance to $257–277 million, even as it raised full-year revenue guidance to $3.13–3.15 billion. Some of the margin pressure traces back to a shift in the company's U.S. weight-loss business earlier this year, when it moved to match its global approach by leaning on branded GLP-1 access over compounded alternatives, a change that came with its own restructuring charges.

Management is framing the spending as an investment, not a leak: more treatments, more specialties, and an "AI-native" customer experience are all queued up for the fourth quarter. For a brand that built its name on being the discreet, DTC alternative to a doctor's office, the bet is that volume and retention eventually outrun the margin math. Wall Street will be watching Q4 to see if that math actually works out, or if "acceleration" just means a faster way to spend more to make more.

Source: Hims & Hers Health Investor Relations (SEC 8-K)

Kyle Duford, Founder & Editor, BRNDWIRE. More from Kyle →