TLDR
- HIMS stock fell 4% after hours despite 111% year-over-year Q1 revenue growth to $586 million
- Q2 guidance of $530-550 million falls below analysts’ expectations of $563.9 million
- Subscriber base grew 38% to 2.4 million with monthly revenue per subscriber up 53% to $84
- Gross margin contracted from 82% to 73.5% year-over-year as product costs increased
- Marketing expenses jumped 77% to $231.2 million, raising questions about long-term sustainability
Hims & Hers Health Inc. (HIMS) reported impressive first-quarter results that were overshadowed by a cautious outlook for the next quarter. The telehealth company saw its stock drop more than 4% in after-hours trading despite beating earnings estimates.
The company reported Q1 revenue of $586 million, representing a massive 111% increase compared to the same period last year. This figure surpassed analysts’ expectations by 8.9%.
Earnings per share came in at 20 cents, significantly higher than the 5 cents reported in the year-ago period. This beat the Zacks Consensus Estimate by 66.7%.
The strong performance was driven primarily by the company’s online channel, which generated $576.4 million in revenue, up 115.3% year-over-year.
Wholesale revenue, however, declined by 7.3% to $9.6 million, making up just 1.65% of total revenue.
Growth Metrics Shine
One of the brightest spots in the earnings report was subscriber growth. Hims & Hers expanded its subscriber base to 2.4 million, a 38.4% increase from the previous year.
Monthly online revenue per subscriber jumped 52.7% to $84, driven largely by the uptake of the company’s GLP-1 weight loss offerings and changes in product mix.
Net income soared over 300% to $49.5 million, while adjusted EBITDA increased by 182% to $91.1 million.
The operating margin expanded by 632 basis points to 9.9%, reflecting improved operational efficiency despite rapid growth.
Hims & Hers exited the quarter with a strong financial position, reporting $322.7 million in cash and cash equivalents, up from $300.3 million at the end of 2024.
Margin Pressure and Future Outlook
Despite the impressive revenue growth, there are some warning signs for investors to monitor. Gross margin contracted by 886 basis points to 73.5% compared to 82% in the same quarter last year.
Operating expenses increased by 70.1% year-over-year to $372.8 million, with marketing costs representing the largest portion at $231.2 million, up 77.1%.
The company’s aggressive marketing strategy has helped fuel growth but raises questions about long-term sustainability and margin pressure.
For the second quarter of 2025, Hims & Hers projected revenue between $530 million and $550 million, representing 68-74% year-over-year growth but falling short of analysts’ expectations of $562.2 million.
The company maintained its full-year 2025 revenue guidance of $2.3 billion to $2.4 billion, which represents growth of 56-63% from 2024 levels.
Year-to-date, HIMS stock has climbed more than 70%. Shares have surged over 40% following Novo Nordisk’s announcement to distribute its weight-loss drug Wegovy through telehealth platforms like Hims & Hers.
In recent developments, Hims & Hers announced a long-term collaboration with Novo Nordisk to make obesity care and treatments more accessible and affordable for Americans.
The company also acquired a U.S.-based peptide facility in California earlier this year, which should strengthen its domestic supply chain to meet growing demand for personalized healthcare options.
Additionally, Hims & Hers announced plans to introduce at-home lab testing through its platform, further expanding its service offerings.
Net cash provided by operating activities reached $109.1 million at the end of Q1 2025, compared to $25.8 million a year ago, demonstrating the company’s improving cash flow generation.
Wall Street analysts currently have a Hold consensus rating on HIMS stock based on four Buys, seven Holds, and two Sells assigned in the last three months.
The average HIMS stock price target stands at $41.67, which is close to its current trading level.
