Q4 2024 Earnings Summary
- Hims & Hers plans to integrate whole body lab testing into their platform in the first half of the year, unlocking more precise treatments, vitamin supplementation, and multi-condition treatments, which will expand their customer base and increase the stickiness of the relationship.
- The company expects continued expansion on revenue per subscriber, driven by the rollout of multi-condition treatments that carry a premium to existing treatments, and increased adoption of oral-based offerings and liraglutide in the back half of the year.
- Hims & Hers is investing in AI and technology to enhance diagnostics and long-term patient outcome management, aiming to build possibly the most powerful data set in health care, enabling more precise diagnoses, personalized treatments, and improved patient care, thus strengthening their competitive advantage.
- Supply chain challenges in sourcing branded medications like semaglutide may limit Hims & Hers' ability to offer these at scale, potentially impacting growth in the weight loss segment. Andrew Dudum mentioned difficulties in sourcing branded medications due to limited supply, stating that they "really can't actually source the branded medications from our pharmacies for our own platform," which prevents them from having a durable offering at their scale.
- Higher costs and challenges associated with launching liraglutide could result in higher prices for patients, potentially limiting adoption and affecting revenue growth. Andrew Dudum acknowledged that bringing liraglutide to market is more expensive due to factors like daily injections and increased packaging costs, predicting a price point similar to commercial dosing in the "couple of hundred dollar range."
- Uncertainty and potential delays in rolling out new offerings such as menopause testing and low testosterone treatments could impact expected growth in customer base and revenue per subscriber. Andrew Dudum stated that they hope to launch these offerings in the first half of the year, "but if not, early second" half, indicating possible delays.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue Q3 2023 (vs Q3 2022) | +57% (from $144.8M to $226.7M) | Revenue grew strongly due to a 57% surge in online revenue from increased subscribers (56% rise from 916K to 1.4M) and a 19% boost in AOV ($83 to $99), along with an expanding personalized solutions segment and enhanced operational efficiency through affiliated order fulfillment. |
Total Revenue Q3 2024 (vs Q3 2023) | +77% (from $226.7M to $401.6M) | Accelerated growth was driven by a 44% increase in subscribers (rising above 2M), a 24% uplift in monthly online revenue per subscriber (from $54 to $67), and the introduction of new personalized offerings (including GLP-1 treatments), alongside a robust 79% rise in online revenue and a modest boost in wholesale revenue. |
Operating Income Q3 2023 (vs Q3 2022) | Loss reduced by 57% (from $(20.0)M to $(8.6)M) | Improved operating income was achieved by a 57% revenue increase, which lifted gross margins from 79% to 83% through better cost control (via affiliated pharmacies) and operational leverage in marketing (despite a 48% rise, its ratio to revenue dropped), along with moderated G&A expenses as revenue scaled. |
Operating Income Q3 2024 (vs Q3 2023) | Turned positive to $22.4M | The recovery was driven by a 77% increase in revenue, resulting in a 70% jump in gross profit—even though gross margin slightly dipped from 83% to 79% due to higher costs on new offerings—and disciplined cost management with marketing expense ratios dropping (from 51% to 45%) and GA&A expense falling from 16% to 11%. |
Net Income Q3 2023 (vs Q3 2022) | 60% improvement (loss from $(18.8)M to $(7.6)M) | Net loss narrowing was driven by a 57% growth in revenue and improved gross margins (from 79% to 83%), which were reinforced by efficient expense management that reduced the net loss and drove adjusted EBITDA from $(6.1)M to $12.3M. |
Net Income Q3 2024 (vs Q3 2023) | Swing from $(7.6)M to $75.6M | A significant turnaround resulted primarily from a $60.8M tax benefit (release of a tax valuation allowance) combined with the strong 77% revenue growth and improved operating leverage that lowered GA&A expenses (from 16% to 11%), thereby converting a loss into a substantial profit. |
EPS – Basic Q3 2023 (vs Q3 2022) | Improved from $(0.09) to $(0.04) | EPS improvement was mainly due to the 57% increase in revenue, higher gross margin (rising from 79% to 83%), and a significant reduction in net loss (from $(18.8)M to $(7.6)M), supported by better operating leverage and a 300 basis point reduction in marketing expense as a percentage of revenue. |
EPS – Basic Q3 2024 (vs Q3 2023) | Increased from $(0.04) to $0.35 | EPS turned positive driven by the combined effect of strong 77% revenue growth, a massive improvement in net income (largely due to the tax benefit and heightened operational efficiency), and continued cost discipline that improved margins and reduced expense ratios. |
Total Revenue Q4 2024 (vs Q4 2023) | ~+95% (from $246.619M to $481.139M) | The dramatic 95% YoY revenue jump reflects sustained momentum from previous quarters with continued subscriber growth and operational improvements building on earlier digital and personalized service successes. |
Operating Income Q4 2024 (vs Q4 2023) | Turned positive: $18.596M vs a loss of $4K | A dramatic operating turnaround occurred due to persistent revenue scaling combined with improved expense management, effectively converting a near-break-even result into a robust positive operating income. |
Net Income Q4 2024 (vs Q4 2023) | +2000%+ (from $1.245M to $26.025M) | The massive net income surge is attributed to a combination of streamlined operations, robust revenue expansion, and strong margin control, likely reinforced by continued tax benefits and cost efficiencies that built upon prior quarter improvements. |
EPS – Basic Q4 2024 (vs Q4 2023) | Increased from $0.01 to $0.12 | EPS recovery reflects the synergy of revenue and net income growth along with disciplined cost management, marking a continued profitability recovery from previous periods. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue (Quarterly) | Q4 2024 | $465 million to $470 million, 89%-91% YoY | No guidance | no current guidance |
Adjusted EBITDA (Quarterly) | Q4 2024 | $50 million to $55 million, 11% margin | No guidance | no current guidance |
Revenue (Quarterly) | Q1 2025 | No prior guidance | $520 million to $540 million, 87%-94% YoY | no prior guidance |
Adjusted EBITDA (Quarterly) | Q1 2025 | No prior guidance | $55 million to $65 million, 11% margin | no prior guidance |
Revenue (Annual) | FY 2024 | $1.46 billion to $1.465 billion, 67%-68% YoY | No guidance | no current guidance |
Adjusted EBITDA (Annual) | FY 2024 | $173 million to $178 million, 12% margin | No guidance | no current guidance |
Revenue (Annual) | FY 2025 | No prior guidance | $2.3 billion to $2.4 billion, 56%-63% YoY | no prior guidance |
Adjusted EBITDA (Annual) | FY 2025 | No prior guidance | $270 million to $320 million, 13% margin | no prior guidance |
Weight Loss Specialty Revenue (Annual) | FY 2025 | No prior guidance | At least $725 million | no prior guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
GLP-1 Weight Loss Program and Treatment Dynamics | Q1 discussions focused on launch timing, clinical excellence, and early brand positioning. Q2 emphasized personalized dosing, improved outcomes and customer side effect management. Q3 highlighted strong consumer demand, pricing differentiation, and adherence factors driven by personalization. | Q4 provided a detailed discussion on revenue contribution (e.g. generating $225M), a significant price reduction (from $199 to $165/month), enhanced personalized dosing to mitigate side effects, and a focus on regulatory compliance and competitive landscape. | Increased maturity and sophistication: A consistent topic now deepens with detailed revenue impact insights, price adjustments, and future ecosystem expansion. The sentiment has shifted positively with enhanced emphasis on personalization and regulatory safety. |
Personalized Healthcare Solutions and Adoption | Q1 mentioned that 35% of subscribers used personalized solutions with rapid adoption indicators. Q2 demonstrated an increase in personalized adoption across specialties and multi-condition treatments. Q3 showcased that over 65% of new subscribers benefited from personalized solutions, driving retention and cross-specialty usage. | Q4 shows continued growth, with over 55% of subscribers now on at least one personalized solution. Plans now include integrating lab diagnostics to further enhance personalization and the expansion of personalized treatment variations. | Steady and bolstered growth: The theme remains consistently positive, with a move toward deeper integration (e.g., lab diagnostics) and a continued upward trajectory in adoption. |
Subscriber Growth and Retention Metrics | Q1 reported robust growth (41% YoY to 1.7M) with strong retention expectations due largely to personalized offerings. Q2 and Q3 reinforced growth with targets around 2M subscribers and retention improvements (e.g., low early churn for GLP-1). | Q4 highlighted 45% YoY growth reaching over 2.2M subscribers, with expectations for long-term revenue retention to remain above 85% due to multi-month treatment plans and personalization. | Consistent growth with strong retention: The narrative remains positive and stable, with slight improvements in engagement and longer-term retention strategies reflected in newer metrics. |
Margin Pressure and Pricing Strategy | Q1 showed robust margins (over 82%) supported by economies of scale and strong retention. Q2 noted initial margin compression linked to scaling GLP-1 offerings with expectations for recovery. Q3 detailed a 2-point decline in gross margins while highlighting pricing experiments and operational efficiencies. | Q4 outlines ongoing margin pressure (a 2-point fall) driven by scaling new offerings, yet emphasizes strategic pricing moves – notably the reduction in GLP-1 treatment pricing – with expectations that margins will recover by Q2 2025. | Cautiously optimistic: While margin pressures persist due to growth in new offerings, proactive pricing adjustments and future recovery plans indicate a balancing act between scaling challenges and operational efficiencies. |
Supply Chain and Cost Challenges for Medications | Q1 emphasized leveraging supply chain efficiencies and economies of scale. Q2 noted challenges in sourcing branded medications and early signs of margin impacts. Q3 stressed rigorous testing protocols and quality management for medications. | Q4 details ongoing supply chain challenges such as difficulties sourcing branded medications, declining reimbursement rates, and higher raw material costs for products like liraglutide. | Persistent risk with evolving details: The theme remains a concern, with earlier operational efficiencies now contrasted by more explicit challenges in sourcing and cost management for newer offerings. |
Expansion into Diagnostic Testing and Multi-Condition Treatments | Q1 did not mention this topic. Q2 introduced multi-condition treatments to broaden care options. Q3 reinforced expansion into multi-condition regimens with low-cost treatments. | Q4 introduces a new emphasis on integrating whole-body diagnostic testing (via lab capabilities and recent acquisitions) along with expanding multi-condition treatment offerings to enable hyper-personalization. | Emerging focus: Diagnostic testing is a new strategic area, complementing ongoing multi-condition expansion to further differentiate the platform and drive future growth. |
AI and Technological Innovations in Healthcare Diagnostics | Q1 had no mention. Q2 briefly touched upon ambitions in AI, including hiring a technology leader and exploring machine learning applications. Q3 introduced the MedMatch AI tool to support provider decision making and automate patient care processes. | Q4 exhibits robust integration of AI, highlighting AI-powered diagnostic tools, MedMatch enhancements, and the vision to implement AI versions of health coaches to further personalize care and treatment outcomes. | Rapidly growing sophistication: From initial explorations to advanced, integrated AI solutions, this topic shows strong positive sentiment and promises large future impact on personalization and diagnostics. |
Legal and Competitive Risks from Pharmaceutical Companies | Q1 and Q3 had minimal or no discussion on this risk. Q2 briefly discussed competitive positioning with large pharma and the clinical justification for compounding. | Q4 provides an in-depth discussion on regulatory frameworks governing compounding and personalization, as well as concerns over Big Pharma’s opposition and market dynamics that may reduce the number of available players. | Heightened focus and caution: This topic has gained prominence in Q4, reflecting increased awareness of legal and competitive challenges, while the company remains confident in its regulatory positioning but remains watchful of Big Pharma dynamics. |
Economic Uncertainty and Its Impact on Consumer Demand | Q1 mentioned that despite economic uncertainty, diverse consumer needs and affordable pricing buoy demand. Q2 reinforced that no significant degradation in demand was observed amid economic challenges. Q3 did not feature specific commentary. | Q4 does not include any specific mention or discussion of economic uncertainty or its impact on consumer demand. | Declining focus: Earlier periods addressed economic uncertainty directly; its omission in Q4 suggests that robust consumer demand and diversified base have diminished concerns over this factor. |
Pricing Competition and Treatment Side Effects in GLP-1 Offerings | Q1 highlighted evolving price competition and underscored clinical safety and high quality as differentiators. Q2 presented competitive pricing (e.g. $199 for GLP-1, $79 for oral solutions) alongside personalized titration to mitigate side effects. Q3 detailed strong efforts in personalizing dosing to manage side effects and moderate churn. | Q4 emphasizes a strategic price reduction (reducing the injectable GLP-1 from $199 to $165) and reiterates personalized dosing to address side effects such as nausea and muscle loss while strengthening retention. | Enhanced strategic adjustments: The consistent focus remains, but Q4 shows evolved tactics in reducing prices further and more robustly addressing treatment side effects through personalization, indicating a proactive market positioning. |
Customer Churn Transparency and Retention Concerns | Q1 provided detailed qualitative insights into retention drivers and churn factors, citing guidance around 85% retention and emphasizing issues around product personalization. Q2 had limited explicit mention, and Q3 noted low early churn (e.g. 13% cancellation in the first month) with longer term “stickiness” in subscriptions. | Q4 does not explicitly discuss customer churn transparency or retention concerns, instead focusing on overall strong retention indicators (e.g. multi-month plans and 85%+ long-term revenue retention) without detailing churn metrics. | Declining explicit focus: Earlier periods had detailed churn transparency discussions; the current period’s omission suggests that retention metrics are performing stably, reducing the need to emphasize churn concerns. |
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Impact of Semaglutide Shortage Ending
Q: How will the end of the semaglutide shortage affect your business?
A: With the FDA indicating that the shortage is over, we will begin notifying customers using commercially available doses of semaglutide to seek alternative options in the coming months. While some may qualify for personalized dosing, we expect many will look to secure branded options elsewhere. This transition is built into our guidance, and we anticipate continued strong performance from our oral weight loss offerings and the upcoming launch of liraglutide. -
Weight Loss Revenue Guidance
Q: Can you elaborate on the $725 million weight loss revenue guidance?
A: Our guidance of at least $725 million in revenue from our weight loss business excludes any contribution from commercially available doses of semaglutide. We expect continued momentum from our oral offerings, which remain incredibly popular due to broader eligibility and consumer comfort. The launch of liraglutide later this year is also anticipated to be a foundational piece of our ecosystem. -
Transition for Current Semaglutide Patients
Q: What happens to patients currently on commercial semaglutide?
A: We will need to start notifying customers that they will need to seek alternative options for commercially available doses of semaglutide in the next month or two. While some may qualify for personalized solutions, we expect that many will try to secure branded options in the open market. This transition is inevitable and has been accounted for in our guidance. -
Regulatory Risks of Personalized GLP-1
Q: Are there regulatory risks in offering personalized semaglutide?
A: The regulatory framework for personalized dosing is clear, and we comply fully with it. We do not expect meaningful conflict regarding personalization, as it addresses clinical necessity. The FDA allows for compounding when there is a clinical need for personalization. -
Timing and Pricing of Liraglutide Launch
Q: When will liraglutide be available, and how will it be priced?
A: We expect to launch liraglutide in mid-year or early in the second half of the year. Due to higher costs associated with daily injections and packaging, pricing may be similar to commercial dosing, in the couple hundred dollar range. Our ambition is to bring this to market in the most affordable way possible. -
Potential Partnerships with Branded GLP-1 Providers
Q: Will you partner with branded GLP-1 companies like Lilly or Novo?
A: We have spoken with both companies and are open to partnerships. However, current supply constraints and reimbursement issues make it challenging to reliably offer branded medications on our platform at scale. We continue to monitor dynamics and remain open to expanding our offerings. -
GLP-1 Contribution to Revenue
Q: What was the GLP-1 revenue contribution in Q4 2024?
A: The vast majority of our revenue still comes from non-GLP-1 offerings. Our core specialties remain incredibly strong, and the increase in personalized subscribers is driven by shifts to these tenured categories. -
Growth Drivers on the Hers Platform
Q: What is driving growth on the Hers platform outside GLP-1?
A: Hers is benefiting from marketing learnings from Hims and focuses on categories that are visible in nature. Key drivers include dermatology treatments like skincare and hair loss prevention for women, which are among our fastest-scaling specialties. Our successful mental health business and weight loss ecosystem are also contributing to Hers' acceleration. -
New Testing Offerings and Revenue Impact
Q: When will new testing offerings like menopause and low testosterone launch?
A: We plan to introduce whole body testing in the first half of the year or early in the second half. This will unlock opportunities for more precise treatments and multi-condition care, potentially expanding customer numbers and deepening relationships. We expect this to contribute to continued expansion in revenue per subscriber.