Branded GLP-1 transition brings restructuring charges to weight loss business
Hims & Hers Health on Monday raised its full-year revenue projection to between $3.1 billion and $3.3 billion, up from a previous target of $2.8 billion to $3 billion, while reporting a swing to a loss in the second quarter. The telehealth platform posted a net loss of $127.9 million, or 37 cents a share, compared with a profit of $43.5 million, or 17 cents a share, in the year-earlier quarter. Analysts had been looking for a loss of just 5 cents a share.
Higher costs drove the quarter’s swing to a loss, which came even as revenue climbed 38% to $753.2 million, past analyst forecasts of $699 million. The cost of revenue more than doubled year over year to $272.4 million, reducing the company’s gross margin, and total operating costs rose 48%. Alongside its revenue target, the company lifted its outlook for a key adjusted earnings metric.
The company said its subscriber count jumped 19% to 2.89 million, while monthly revenue per average subscriber rose 21% to $92.
For the third quarter that began July 1, Hims & Hers expects $880 million to $900 million in revenue, ahead of current analyst estimates for $792 million, according to FactSet.
Chief Financial Officer Yemi Okupe said Hims & Hers expects its domestic business to keep accelerating through the back half of the year. The company has even more conviction now in its ability to achieve a 2030 target for at least $6.5 billion in revenue, Okupe said.
The result includes restructuring charges tied to a strategic shift in the U.S. weight-loss segment toward branded GLP-1s and more limited compounded offerings. The costs include inventory write-downs, third-party costs, and non-recurring employee compensation charges.
The earnings report followed a lawsuit the Federal Trade Commission filed against Hims & Hers alleging misuse of users’ information with third-party advertising platforms. Hims & Hers is disputing the claims and said it would defend itself in court.