Hims & Hers Health, Inc. Q1 FY2025 earnings call

• 2025 is a landmark year for Hims & Hers, with a vision of healthcare that's convenient, affordable, transparent, and personalized. By 2030, aiming for at least $6.5 billion in revenue and $1.3 billion in adjusted EBITDA. • Core drivers of growth include deepening personalization capabilities, expanding into new specialties, elevating precision care, building strategic partnerships, and scaling globally. • First quarter results showed strong momentum with revenue doubling year-over-year, adjusted EBITDA nearly tripling, and subscriber base growing. • Partnership with Novo Nordisk is a pivotal milestone, expanding access to branded Wegovy and setting the blueprint for future partnerships. • Acquired an at-home lab testing provider to make blood testing easier and more accessible, supporting current specialties and unlocking new ones. • Nader Kabbani joined as Chief Operating Officer.

Revenue grew 111% year-over-year to $586 million. Subscriber base grew to nearly 2.4 million, a year-over-year increase of 38%. Over 70% of new subscribers partner with a provider for a personalized solution. In sexual health, the number of subscribers using a daily offering doubled year-over-year and now represents nearly 40% of sexual health subscribers. Weight loss is a large specialty, with the collaboration with Novo Nordisk expanding access to branded Wegovy. Revenue outside of GLP-1 offering grew nearly 30% year-over-year. Monthly online revenue per average subscriber climbed to $84, up over 50% year-over-year.

• Second quarter revenue expected between $530 million to $550 million, year-over-year growth 68% to 74%; adjusted EBITDA range $65 million to $75 million. • Full year 2025 revenue expected between $2.3 billion and $2.4 billion, up 56% to 63% year-over-year; adjusted EBITDA range $295 million to $335 million. • Expect continued strong growth in tenured offerings, but uneven trends in sexual health due to treatment mix transitions. • Expect to complete transition of subscribers from commercially available semiglutide by end of second quarter. • Expect gross margins to expand in second quarter. • Expect some volatility in marketing efficiency, but committed to capital allocation framework with payback period less than a year. • Long-term revenue retention expected above 85%.

• Potential uneven trends in sexual health as navigate transitions in treatment mix. • Macro-economic factors such as tariffs could impact gross margins. • Volatility in marketing efficiency from quarter-to-quarter.

Q: Can you elaborate on the future roadmap Hims & Hers and Novo Nordisk are developing together and what do you see as the next possible steps on this roadmap? Over time, could Hims platform play a role in partnering with companies with newly approved drugs for the sake of post-approval monitoring of side effects and efficacy?

A: Andrew Dudum said there are shared visions and brainstorming across categories, product lines, and geographies. This partnership is a blueprint for the next 5-10 years, and Hims & Hers can bring together players to broaden the ecosystem.

Q: What type of longevity product is the team looking to build for its customers with the recent acquisition of the peptide facility? And how does this facility fit in with the plan to roll out lab testing and grow your ability to offer precise and more targeted treatments?

A: Andrew Dudum said peptide innovation is expanding rapidly across areas like pain management, recovery, and generalized longevity. The peptide facility is a vital component, and the intersection of lab testing and longevity will enable more proactive and preventative care.

Q: On the weight loss category and the target for $725 million revenues this year, can you just touch on what you see as the key drivers in just looking for color across how the personalized offerings are going?

A: Andrew Dudum said the shortage ending and offering a breadth of options like liraglutide, branded Wegovy, and existing products give confidence to meet or exceed the target.

Q: I appreciate all the color on the transition within the sexual health vertical. Can you maybe just talk about sort of some of the initiatives to reaccelerate growth in that vertical?

A: Andrew Dudum said the business is transitioning to hyper-personalized care, more daily multi-action care, with daily solutions doubling year-over-year and now accounting for nearly 40% of the business.

Q: It seems like very clear near-term opportunity for you to shift subscribers to commercial dosages. But it's also pretty clear that the manufacturers will be watching your positioning on personalized GLP-1s closely. So how do you approach the opportunity for growth in personal lines? Is that a growth opportunity versus the opportunity to grow via brand partnership?

A: Andrew Dudum said they aim to be blue chip, follow rules, and personalized semaglutide exists for clinically necessary cases. It's additive to the ecosystem as it's for patients with intolerable side effects of commercial doses.

Q: As we think about the shortage ending here and sort of that transitionary period for the commercially dosing customers, can you talk about what retentions looked like on the base? And then as you are offering this portfolio approach where you're seeing sort of those commercial dosage customers shifting into within the Hims platform, whether it be personalized, liraglutide, oral, ex cetera.

A: Andrew Dudum said patients on commercial available doses split between generic treatments (oral and LERAs) and branded options. The oral medication is attractive with low cost and no eligibility requirements, seeing robust growth.

Q: I have a similar question, but I'm curious if you can provide what percent of folks who are on commercially available doses transition to personalized doses. And when you were inking the partnership with Nova was there any discussion around limiting the uptake of personalized doses that you're offering? And then finally, just given some recent lawsuits that were filed against competitors of yours, can you just put a finer point for us on how Hims, the corporate entity, interacts with its affiliated provider groups when making medical decisions.

A: Andrew Dudum said they don't disclose the percentage of transition. There was alignment on clinical necessity for personalized semaglutide. Hims doesn't engage in clinical decision making with provider groups; providers have independent judgment.

Q: I wanted to get further color on the monthly revenue line. Obviously, it grew nicely this quarter, but you mentioned moderating throughout the year. How should we just think about the put-then-takes there? And would love additional color on the oral medication. You mentioned potentially more people opting into that. Any color on how you are thinking about that opportunity within this year and just going forward would be helpful.

A: Andrew Dudum said monthly online average revenue per subscriber may moderate in Q2 due to transition from commercially available semaglutide, but tailwinds from branded partnerships and premium products. Oral medication has attractive price points, no eligibility requirements, and is seeing strong growth with subscriber count growing north of 300% year-over-year.

Q: I wanted to come back to Daniel's question about the relationship between Novo and Hims, and I guess like there is kind of this natural tension between the dispensing of the personalized product and the commercial Wegovy that you guys are selling. So was there any, like interaction or any discussion around, like a ratio of the dispensing of the personalized product versus the commercial product.

A: Andrew Dudum said clinical decision making is independent. There's no ratio discussion as it's about provider discretion. Hims & Hers aims to bring broad choice to patients, benefiting everyone.

Q: Can you talk about your willingness or ability or desire to at some point in time take insurance? It seems to me like if you were taking insurance you would potentially be more aligned with drug manufacturers when the price of their brand products are fairly high because the members could then have those products covered by insurance and the out-of-pocket costs wouldn't be so high. So can you talk about that please? And then also, what is your relationship with Lilly? Are you connected with Lilly Direct? And just any thoughts around your relationship with Lilly would be very helpful.

A: Andrew Dudum said no interest in integrating insurance as it's complicated and inefficient. Hims & Hers aims to put consumers first with cash pay. On Lilly, they have branded Mounjaro and Zepbound pens on the platform, but no direct integration with Lilly Direct yet, and continue to have conversations.

Q: Maybe just on gross margins, how to think about that through the remainder of the year? Maybe any color on the branded partnerships margins? And then just you mentioned kind of longevity, sleep and preventative opportunities. Just how are you thinking about those opportunities specifically.

A: Yemi Okupe said gross margins are expected to sequentially increase due to economies of scale and strength in non-GLP-1 offerings. Andrew Dudum said preventative care is an exciting category with cultural desire for proactive care, and Hims & Hers aims to curate consumer friendly offerings through partnership, M&A, and building it themselves.