GLP-1 Shift Weighs on Hims & Hers Margins Despite Strong Revenue Growth

Strong Growth Meets a Sharp Profitability Squeeze

Hims & Hers Health (HIMS) reported second-quarter revenue of $753.2 million, up 38% year over year and above analyst expectations. Subscribers increased 19% to nearly 2.9 million, while monthly revenue per average subscriber climbed 21% to $92.

The growth, however, came with significantly weaker profitability. Hims & Hers swung to a net loss of $86.3 million from net income of $42.5 million a year earlier, gross margin fell to 64% from 76%, and adjusted EBITDA declined to $60.3 million from $82.2 million. HIMS shares moved lower following the report as investors weighed accelerating revenue against the costs of the company's evolving weight-loss strategy.

Key Points

• Hims & Hers Q2 revenue increased 38% to $753.2 million as subscribers rose 19% to nearly 2.9 million and monthly revenue per average subscriber increased 21% to $92.
• Gross margin dropped to 64% from 76% a year earlier, adjusted EBITDA declined to $60.3 million, and free cash flow was negative $68.2 million.
• Hims & Hers raised its full-year revenue outlook to $3.1 billion to $3.3 billion but reduced the upper end of its adjusted EBITDA guidance, highlighting the profitability trade-off accompanying its growth.

Revenue Growth Accelerates as Hims & Hers Expands

Hims & Hers continued to expand its customer base and generate more revenue from each subscriber during the second quarter.

Revenue reached $753.2 million, up 38% from the prior-year period. Domestic revenue increased 16% to $621.8 million, while international revenue reached $131.4 million compared with $7.5 million a year earlier. The company attributed much of the international increase to the Eucalyptus acquisition, which closed in June.

Subscriber count rose 19% to nearly 2.9 million. Monthly revenue per average subscriber increased 21% to $92, showing that growth came from both a larger customer base and higher revenue generated per subscriber.

Management also raised its sales outlook. Hims & Hers now expects full-year 2026 revenue of $3.1 billion to $3.3 billion, up from its previous forecast of $2.8 billion to $3 billion.

Third-quarter revenue is expected to reach $880 million to $900 million, above the analyst estimates cited in the provided reports.

The company also reaffirmed its longer-term targets of at least $6.5 billion in revenue and $1.3 billion in adjusted EBITDA by 2030.

Why Did HIMS Stock Fall Despite Higher Revenue Guidance?

The earnings reaction centered on profitability rather than sales growth.

Hims & Hers reported a second-quarter net loss of $86.3 million compared with net income of $42.5 million a year earlier. Its reported loss of $0.37 per share was also wider than analyst expectations cited in the provided reports.

Costs increased substantially. Cost of revenue more than doubled to $272.4 million, while total operating expenses climbed 48% to $578 million.

Gross margin consequently declined by 12 percentage points to 64% from 76% a year earlier.

The changing weight-loss product mix was an important contributor. Hims & Hers has shifted its U.S. weight-loss offering toward branded GLP-1 medications while pulling back on compounded alternatives. The transition generated restructuring charges that included inventory write-downs, third-party costs and one-time employee compensation expenses.

The quarter also included $47.5 million in legal contingencies.

Adjusted EBITDA, which excludes several of these expenses, declined to $60.3 million from $82.2 million a year earlier. Adjusted EBITDA margin fell to roughly 8% from 15%.

Free cash flow was negative $68.2 million, adding another profitability and cash-conversion issue for investors to monitor.

What Matters Next for Hims & Hers?

The contrast between Hims & Hers' revenue outlook and profitability guidance is becoming a central part of the company's financial story.

While management increased its full-year revenue forecast substantially, it narrowed adjusted EBITDA guidance to $275 million to $325 million from $275 million to $350 million. The low end remained unchanged while the high end fell by $25 million.

That combination means the company now expects more revenue than previously forecast while maintaining a lower ceiling for adjusted EBITDA.

For the third quarter, Hims & Hers expects adjusted EBITDA of $75 million to $95 million alongside revenue of $880 million to $900 million.

The company ended Q2 with more than $840 million in cash and short-term investments after paying approximately $225 million upfront for Eucalyptus. It also had $225 million remaining under its share-repurchase authorization.

Management expects free cash flow to turn positive again during the second half of the year.

Artificial intelligence is another part of the company's operating strategy. Hims & Hers said its AI-native weight-loss service tripled customer messaging, answered 80% of questions and reduced non-clinical tasks by nearly 50%. The company expects its AI investment to pay back within 12 to 18 months.

Legal and regulatory developments also remain part of the picture. The Federal Trade Commission and several U.S. states have sued Hims & Hers over allegations involving consumer health data, billing and subscription cancellation practices. The company has denied wrongdoing and said it plans to contest the claims.

What It Means for Investors

Hims & Hers' Q2 results show that demand remains strong while the economics of that growth are changing.

Subscriber growth, higher revenue per subscriber, international expansion and increased full-year guidance all point to a business continuing to scale. The company is also forecasting another sequential increase in revenue during the third quarter.

At the same time, gross-margin compression, lower adjusted EBITDA, negative free cash flow and the reduced upper end of full-year EBITDA guidance show that additional revenue is currently arriving with weaker profitability than before.

The company's weight-loss strategy is an important part of that shift. Moving toward branded GLP-1 medications changes the economics of the offering, while restructuring and acquisition-related expenses add additional near-term costs.

For HIMS stock, the central question has therefore moved beyond revenue growth alone. The company's ability to translate its expanding subscriber base and higher sales outlook into stronger margins and more consistent cash generation is becoming an increasingly important measure of operating performance.

Conclusion

Hims & Hers delivered another quarter of strong top-line expansion, with revenue rising 38% to $753.2 million and subscribers approaching 2.9 million. Management reinforced that growth story by lifting its 2026 revenue forecast to as much as $3.3 billion.

But the earnings reaction highlights the other side of the company's expansion. Gross margin fell sharply, adjusted EBITDA declined, free cash flow turned negative, and Hims & Hers swung from a year-earlier profit to an $86.3 million net loss.

The next phase of the HIMS stock story will depend heavily on whether the company can maintain its current growth trajectory while improving the profitability and cash-flow characteristics of its evolving weight-loss business.

FAQs

Why did HIMS stock fall after Q2 earnings?

HIMS stock moved lower as strong revenue growth and higher guidance were overshadowed by a wider-than-expected loss, gross-margin compression, lower adjusted EBITDA and negative free cash flow.

How much revenue did Hims & Hers generate in Q2 2026?

Hims & Hers generated $753.2 million in second-quarter revenue, an increase of 38% from the same period a year earlier.

Why did Hims & Hers' gross margin decline?

Gross margin fell to 64% from 76% a year earlier as the company's weight-loss product mix changed, including greater exposure to lower-margin branded GLP-1 medications.

What is Hims & Hers forecasting for 2026?

Hims & Hers expects full-year 2026 revenue of $3.1 billion to $3.3 billion and adjusted EBITDA of $275 million to $325 million.

What is Hims & Hers forecasting for Q3?

Hims & Hers expects third-quarter revenue of $880 million to $900 million and adjusted EBITDA of $75 million to $95 million.

This article was created with AI assistance and reviewed by an editor. For details, please refer to our Terms of Use.

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