Hims & Hers (HIMS): Q2 2025 Earnings Review
Yesterday, HIMS reported its Q2 2025 results.
For the first time in the company’s history, it missed analysts’ expectations.
The stock is down ~13% so far. Overreaction or justified?
In this article, I’ll break down everything you need to know from the Earnings Report.
Financial and Business Highlights
Revenue: $544.8M vs. $552.1M est. (+73% YoY)
This marks a sharp deceleration from the 111% YoY growth in Q1, though it was expected given the decline in revenue from compounded GLP-1s, which has been the main growth driver.
Breaking it down:
Compounded GLP-1s: ~34.9% of total revenue (from ~39.2% in Q1)
This is trending down both in percentage terms and in absolute dollars (from $230M to $190M QoQ). That’s a positive sign IMO, it suggests HIMS is slowing its aggressive push to sell as many GLP-1s as possible, something that has recently brought significant litigation risk. However, GLP-1s still represent too large a share of total revenue, which remains a key concern. The company also stated it expects continued growth across all weight-loss specialties, including GLP-1s, indicating they will keep pursuing the 503A compounding loophole, something I’ve been openly critical of.
Core business: ~65.1% of total revenue
Core business YoY growth slowed from “nearly 30%” in Q1 to “nearly 20%” in Q2, not a great sign. The deceleration was somewhat expected due to marketing spend being shifted toward compounded GLP-1s, but here’s the issue: GLP-1 revenue actually decreased QoQ, and marketing spend fell in absolute terms. That probably means customer acquisition costs (CAC) for the core business are rising.
Last quarter, the company said:
“We're seeing more subscribers come to our platform through organic and other lower-cost channels.”
They even suggested the core business could reaccelerate after the semaglutide shortage ended, but that’s not showing up in the numbers.
From yesterday’s earnings call:
“We see continued robust subscriber growth across our dermatology, oral weight loss and daily sexual health offerings that all sustained YoY subscriber growth rates above 55% in the second quarter. Strong performance across these offerings helped offset headwinds that came from offboarding GLP-1 subscribers on commercially available dosages as well as a decline in our on-demand sexual health subscriber base.”
This helps explain the sharp slowdown in the core business. HIMS has never broken down revenue by treatment category, which would be extremely useful. I suspect that erectile dysfunction (ED) treatments still make up a meaningful share of the core business. There’s no shame in that, it’s how the company started, but the drop in the on-demand sexual health subscriber base likely played a big role in the slowdown. The move toward daily treatments is a known strategy and likely aimed at differentiating from competitors like Amazon, which has been aggressively pursuing the ED market with cheaper, equally convenient options.
Hopefully, HIMS can reaccelerate the core business while building a healthier revenue mix with less ED dependency. As management noted:
“We expect headwinds from the rotation of our sexual health specialty toward more premium daily offerings for the next couple of quarters but are excited to see over 40% of total sexual health subscribers and roughly 65% of new sexual health subscribers in the quarter benefiting from a daily offering.”
That’s encouraging, but it also means headwinds will persist in the near term. Long term, though, this shift could improve retention rates and prove to be a net positive, provided core business growth picks back up.
Subscribers: 2,439M (+31% YoY)
This was the lowest quarterly net adds since Q2 2023, reinforcing the idea that CAC may be rising. Competition could also be an important factor.
Personalized Subscribers as a % of Total Subscribers increased by less than 1% from Q1 to just above 60%, the slowest pace ever. While that’s still progress toward better customer retention and differentiation, it’s still far from the 80–90% Andrew Dudum once projected for the near future.
That said, there is a positive trend worth noting:
“At the end of the second quarter, subscribers utilizing personalized treatment plans to target multiple conditions increased nearly 170% YoY to over 500 thousand subscribers.”
This is likely linked to the shift from on-demand to daily sexual health solutions:
“Today, our daily sexual health offerings allow subscribers to partner with providers to treat hair loss concerns, improve their cardiovascular health, support testosterone levels and optimize vitamin levels.”
Monthly Online Revenue per Avg Subscriber: $74 (+30% YoY but -12% QoQ)
The YoY increase is due to a higher share of GLP-1 revenue compared with last year, while the QoQ drop reflects the decline in GLP-1’s share this quarter.
Q3 Revenue Guidance: $570-590M vs. $584.1M est.
It’s good to see sequential growth, but the midpoint of guidance implies another sharp slowdown: from 73% YoY in Q2 to 44% in Q3. If this reflects a more cautious approach to GLP-1s, that’s positive, but HIMS must also reignite its core business or risk a market re-rating (on the negative side).
Gross Margin: 76% (down from 81% YoY but up from 73% QoQ)
The company’s gross margins remain exceptionally healthy. Both the YoY decline and the QoQ increase can be attributed to the mix of revenue from GLP-1s.
If there's one thing this company excels at, it's enhancing efficiency while passing the cost savings on to its customers.
Adj. EBITDA: $82.2M vs. $72.2M est. (+109% YoY)
GAAP EPS: $0.17 vs. $0.16 est.
Operating Cash Flow: ($19.1M)
Free Cash Flow: ($69.4M)
While Adjusted EBITDA and GAAP EPS were positive and exceeded expectations, many investors were surprised to see HIMS posting negative free cash flow for the quarter. This marks the first time in several years that the company hasn’t generated cash in a quarter, though the company has stated that this is a temporary issue.
“The YoY decline was primarily driven by temporary working capital investments, and an increase in capital expenditures as we continue to invest in the level of automation and broader capabilities of our underlying pharmacy infrastructure. The former is expected to normalize through the rest of the year.”
Provided these investments lead to the expected efficiency gains, I don’t view this as a concern.
The company now holds over $1.1B in cash and cash equivalents, having raised $1B through convertible notes under extremely favorable conditions. That also means it has $1B in debt, which may eventually be converted into shares rather than repaid. This could result in a small dilution, but it’s likely a worthwhile trade if they deploy the capital effectively.
Reiterates FY2025 Revenue guidance of $2.3-2.4B vs. $2.347B est. (+56-63%)
Reiterates FY2025 Adj. EBITDA guidance to $295-335M vs. $319.4M est. (+67-90%)
It’s good to see HIMS reiterating its full-year guidance after missing Q2 expectations. However, it’s important to note that the company expects at least $50M in revenue from the ZAVA acquisition (which I’ll discuss later). This means the full-year guidance reiteration is at least partly supported by that inorganic contribution.
There’s also the possibility HIMS is being conservative, but it’s still worth noting.
GAAP Operating Expenses as a % of Revenue: 71% (down from 78% YoY, but up from 63% QoQ)
It’s clear HIMS had an unusually strong quarter in terms of efficiency in Q1. Still, the YoY trend is encouraging. Management has always said this metric can be lumpy from quarter to quarter, but as long as they continue to deliver at least modest efficiency improvements each year, the trajectory looks healthy.
What I found odd was the decrease in absolute marketing expenses: from $231.2M in Q1 to $217.9M in Q2. This could be explained by the Super Bowl ad in Q1, but I’d still expect the company to redirect marketing efforts to the core business, especially as it faces significant deceleration. Hopefully, this doesn’t mean what I said earlier, that CAC is increasing rapidly.
It’s also possible that marketing efficiency being down QoQ is related to the partnership with Novo Nordisk. When it launched, HIMS rushed to run a lot of social media ads, but just a few weeks later, the partnership ended, and they had to offboard the existing clients.
There was also a notable QoQ increase in G&A costs as a % of revenue, but that could be explained by recent executive hires, namely the new COO, CTO, and CPO. These seem to be important hires, so probably nothing to worry about here.
Technology and development costs as a % of revenue also ticked up slightly, but that was expected and should help the company pursue its long-term vision.
We should continue to see an uptick in investments:
“We expect that we are entering an investment period for at least the next year, particularly in marketing and technology. Augmentation of our engineering talent with expertise in AI development and the scaling of global platforms is expected in the coming quarters.”
While this could be a temporary headwind for efficiency, it’s likely a good decision for the long-term optimization of the business.
Finally, HIMS reaffirmed its long-term financial targets for 2030:
Revenue of at least $6.5B
Adjusted EBITDA of at least $1.3B
I wasn’t expecting anything less. It would be crazy to issue a five-year target and change it the following quarter. However, I’d love to see Andrew address what he previously said would be one of the five key growth drivers to achieve this target: partnerships with blue-chip healthcare players.
After signing a partnership with Novo Nordisk, he spent a lot of time during Q1 results talking about how game-changing it could be for HIMS. Now that the partnership has ended, we didn’t hear a single word about this supposed growth lever. Even if he didn’t want to comment on the Novo Nordisk situation for obvious reasons, I’d like to know if the company still plans to partner with other pharmaceutical giants. My guess is they don’t, but it’s not a great look to call something a significant growth driver and then completely ignore it the following quarter.
To be clear, I’m not saying this will affect the company’s ability to reach its 2030 targets. If you’ve read my Q1 earnings review, I’ve always said this partnership didn’t seem as deep as Andrew claimed and was probably a strategy to shift attention away from litigation risk, which proved to be true.
All in all, this was probably one of the least impressive quarters HIMS has had since I started covering the company in 2020, but at the same time, it wasn’t as bad as it seems. It was definitely not as good as the company is used to delivering, and probably not as good as the market had priced in, but if you were an investor before this report and paying attention to every detail of the business, you should have expected most of what happened.
However, there are significant risks worth monitoring. In my opinion, the most relevant, apart from the expected lawsuit from Novo Nordisk, are CAC trends and the sharp deceleration in core business revenue growth. The company enjoyed significant multiple expansion because of accelerating growth and operating leverage, so it wouldn’t be surprising to see a multiple contraction if it fails to maintain that trajectory.
New Verticals
Something very important, and potentially key to reigniting core business growth, is the upcoming launch of new verticals.
Hormone Therapy
The first of these is hormone therapy, set to roll out in the coming months. Management framed it as an entry into one of the most overlooked areas in healthcare:
“In the coming months, we’ll launch new offerings in hormone health, bringing our world-class approach to one of the most overlooked areas in healthcare.”
This is a space with clear, unmet demand. For men, low testosterone can lead to fatigue, reduced libido, and an overall diminished quality of life. For women, menopause often brings hot flashes, sleep disturbances, and mood swings. Beyond quality of life, evidence suggests that proper treatment can also help reduce long-term risks such as heart disease and cognitive decline.
If executed well, hormone therapy could become a strong growth driver, bringing in both new customers and recurring revenue while increasing lifetime value per patient.
At-Home Lab Testing
Another major initiative is at-home lab testing. Initially, this will be rolled out to support hormone therapy treatments, but the company plans to make it a standalone service in 2026. This move fits perfectly with HIMS’ vision of evolving from a reactive healthcare provider to a preventive one:
“As we move into 2026, we plan to introduce standalone lab testing and expand into longevity-focused care. Together, these additions will help transform our platform from a place people turn to when something’s wrong, to one they turn to proactively to monitor their health and prevent issues before they arise.”
The strategy here is clear: use diagnostics not only to support treatment decisions but to create an ongoing, subscription-like relationship with patients. The long-term goal is a Costco-style healthcare membership, where customers engage with HIMS regularly for a variety of needs, rather than just for a single condition. This type of platform model could significantly increase stickiness and reduce churn.
Longevity (Peptides)
Longevity is another high-potential frontier for HIMS, and one that management is already preparing for. At-home lab testing will serve as the foundation for this effort, providing the data needed to personalize treatments.
“As we move into 2026, these insights will provide the foundation for our initial entry into longevity. In recent years, there has been an explosion of innovative treatments across immunity, recovery and improved metabolic function. We believe that by combining access to comprehensive lab work with a growing network of compounding and peptide facilities, we are well positioned to unlock broader access to thoughtful, proactive interventions that are not just reacting to certain conditions, but focused on helping individuals live longer, healthier lives.”
Given the rising consumer interest in proactive health, anti-aging, and wellness optimization, this could be a natural next step for the brand. Peptides, in particular, have been gaining traction among health-conscious consumers and could position HIMS as an early leader in mainstream longevity solutions.
Overall, I see these new verticals as critical to reaccelerating core business growth, something VERY important for the long-term investment thesis to remain on track. They target large addressable markets, play into long-term preventive healthcare trends, and deepen HIMS’ positioning as a multi-solution provider.
International Expansion
HIMS has recently started to place more emphasis on international expansion, positioning it as one of the key growth drivers to help achieve its ambitious 2030 targets. Management now talks about global markets with the same optimism they once reserved exclusively for the U.S.
While international growth can indeed play a role in the long-term story, I think the near-term execution risks, and the potential distraction from the U.S. opportunity, deserve careful attention.
Europe
“We believe international expansion represents one of the most compelling growth opportunities ahead of us. Our success in the UK in recent years has reinforced this belief and with our recent acquisition of ZAVA Global, a leading European digital health provider, we’re furthering our commitment to serving global markets in a more meaningful way.
With ZAVA, we’ve expanded our presence in the UK and gained the infrastructure to serve customers across Germany, France, and Ireland; four markets with a combined population of roughly 160M adults. We believe there are relatively near-term opportunities that will allow us to drive at least $50M of revenue from ZAVA through the remainder of the year at a positive Adjusted EBITDA margin.”
As always, I have to be honest: I don’t think expanding into Europe is the smartest move right now. The company has repeatedly emphasized that the U.S. opportunity is still in its early innings, so why dilute focus by entering regions where the value proposition is fundamentally different?
The strengths HIMS offers to U.S. consumers don’t translate as easily to the European market. The healthcare systems are fundamentally different, affordability gaps vary, and the overall consumer behavior differs significantly. And I say this as a European.
It’s not that there’s no demand here. But in my view, the company simply isn’t at the stage where it can scale internationally without risking its execution. Unless HIMS sees signs of saturation or slowing growth in the U.S. (which would be a serious red flag), this expansion feels premature.
That said, I was pleasantly surprised by the deal’s structure:
$147.6M paid upfront
Up to $118.1M in performance-based earn-outs
So if ZAVA doesn’t deliver, the downside is capped at the initial price, which is way better than I expected. Still, I would’ve preferred to see that capital reinvested into U.S. expansion or the rollout of new verticals. Yes, they can technically do both, but we all know that staying laser-focused tends to yield better results over time.
Maybe I’m wrong and this turns into a strong source of growth. But I’ve got a feeling this move isn’t as bullish as it sounds on paper.
Canada
In contrast, HIMS’ entry into Canada, scheduled for 2026, looks much more aligned with its strengths. The company plans to start this expansion by launching generic semaglutide at C$75–100/month, offering significantly lower prices compared to the C$200+ currently charged for branded versions (which often come without any clinical support).
The Canadian rollout will be done through partnerships with large generic manufacturers already bringing these treatments to market, avoiding any cross-border movements.
This strategy is much safer and easier to scale. It’s a lot simpler to replicate HIMS’ U.S. model in Canada, especially since both countries speak English and are very close to each other. Starting with a single product and expanding gradually also keeps risk low.
In my opinion, international expansion, at this stage, should be focused purely on English-speaking countries like Canada and the UK, where operational adjustments are minimal.
Latin America & Asia
For the first time, HIMS mentioned a possible long-term expansion into Latin America and Asia:
“We see opportunities to expand into other regions, which may include additional European countries, Latin America, and Asia.”
Based on the tone of the call, this doesn’t sound like something imminent. Still, I want to be clear: if they actually pursue expansion into these regions anytime soon, I’d consider it a terrible move.
In Asia, maybe they could have some success in countries like Japan, South Korea, Singapore, or even China (though that’s still a big maybe). But in Latin America, I just don’t see the unit economics working. Most of the population doesn’t have the purchasing power to make this model viable, and chasing growth there could damage margins without much payoff.
This is one of the things I’ve grown to dislike about Andrew over time. In the early days after going public, he stayed laser-focused and avoided flashy distractions, and that’s why I liked him so much back then. Now it feels like he’s more interested in throwing out fluffy headlines to excite the market.
It’s worth noting that I seriously doubt anything material will happen in Latin America or Asia anytime soon. But if it does, I don’t think it’s a smart move at all. And if it doesn’t… it just reinforces my point: these types of vague announcements are more about short-term optics than a real strategy.
New Executive Team Members
As we know, HIMS has been hiring some very experienced names for its executive team. More specifically, the company hired Nader Kabbani as COO, Mo Elshenawy as CTO, and Dheerja Kaur as CPO.
This investment in fresh blood is aimed at “entering the next phase” of HIMS’ platform. Here's an explanation of where each of the new hires will help:
Nader Kabbani (COO) is focused on building a complex infrastructure that can scale new capabilities while maintaining a simple customer experience. He’s already improving the strength and speed of the company’s operations, with upcoming additions like lab testing and expanded sterile injectable capacity expected to support broader treatment offerings.
Mo Elshenawy (CTO) will lead the effort to unlock deeper data insights, leveraging new lab data to personalize every customer experience. His work will enable HIMS to power more accurate recommendation engines, match customers with more relevant treatments, and move from reactive care to proactive health management.
Dheerja Kaur (CPO) is tasked with unifying the customer experience across the platform. By collaborating with Mo and the technical team, she’s reshaping how users interact with HIMS, making it easier to access personalized care, whether for routine lab testing or ongoing support for chronic conditions like weight loss.
It’s still early to say whether these additions will deliver the long-term impact HIMS is aiming for, but it’s clear that Andrew is determined to build a high-caliber team around a focused and well-defined vision for the platform’s future.
The end goal is clear: to accelerate the flywheel effect of the overall platform.
Final Thoughts: Is The Long-Term Thesis Broken?
In my honest opinion, it would be a stretch to claim that based solely on this quarter. However, it’s definitely being tested.
HIMS still claims a massive addressable market, with more verticals to launch and a long-term vision to lead in personalized and preventative healthcare. This quarter fell well below the standard the company has set in the past, and the pace of execution is clearly slowing, but the core mission hasn’t changed. What’s changed is the level of confidence in its ability to deliver on it.
There’s an important and growing emphasis on technology: real-time digital coaching, behavioral tools, improving AI-driven treatment personalization, and even talk of virtual nutritionists and CBT-trained agents for insomnia. If executed well, these could deepen patient engagement and improve lifetime value. But right now, these are largely unproven concepts that sound more like a pitch deck than a near-term product roadmap. They’re interesting ideas, but it’s unclear whether the company will get there.
At the same time, HIMS is pushing ahead with European expansion, despite not having fully maximized its U.S. footprint. Andrew Dudum seems confident in the company’s domestic moat, but I think that’s premature. In this phase, with execution already slowing, expanding into Europe feels like a distraction.
Finally, beyond competitive pressure (higher CAC) and slower growth in some verticals, the legal risk around compounded GLP-1s is becoming a real problem. Novo Nordisk has just filed over 130 lawsuits across 40 states, explicitly targeting telehealth companies for allegedly pushing patients toward unauthorized knockoffs under the guise of “personalization.” That language hits uncomfortably close to HIMS’ own model in this space, and the risk of being pulled into a costly legal fight is rising fast.
I’ve owned HIMS before, buying in the single digits during earlier periods of uncertainty. But those were different kinds of risks, not legal, and the valuation back then easily compensated for them. That’s not the case today. In my opinion, the current valuation doesn’t justify the rising execution risks, legal exposure, or the potential long-term damage if a major lawsuit hits. I’m not saying HIMS will fail in the long term, not at all, I just wouldn’t feel comfortable owning it when none of the risks seem to be priced in.
Our job isn’t to avoid risk, it’s to take smart risks when the odds are in our favor. Right now, they aren’t good enough for me personally.
Could I have timed my sale better? Sure, my average selling price was ~$40/share (average cost was $10.07). But I don’t regret the decision at all. Most of that capital went into NBIS in the low $20s, which has even been outperforming. More importantly, I stuck to one of my cardinal rules: never hold a position that keeps you up at night.
Please, understand the following: This isn’t about rooting against HIMS. I’ve followed this company longer than any other, and it’s played a huge role in my development as an investor. A lot of readers got in based on my earlier research, and that’s exactly why I feel a responsibility to cover it now with honesty and transparency. No spin. No ego. Just the facts as I see them today.
That’s it. Thanks for reading!
Disclaimer: As of this writing, M. V. Cunha does NOT hold a position in Hims & Hers.
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Great analysis. I sold out when it popped after the earnings drop. I didnt like the earnings very much and you are absolutely right. The reward vs the risk isnt there, at least for me.
Fact based! Well done