Hims & Hers Q1 revenue jumps 74% as company looks to expand virtual behavioral health services

Hims & Hers wellness branding with a man and a woman
Last spring, in response to the COVID-19 pandemic, Hims & Hers fast-tracked an expansion of its telehealth services to offer access to primary care and also rolled out online mental health services, starting with free support groups. (Hims & Hers)

Hims & Hers, a consumer telehealth and wellness brand, saw its first-quarter 2021 revenue grow 74% to $52 million, beating both the company's expectations and Wall Street estimates.

The company brought in revenue of $30 million during the same quarter a year ago. In its fourth-quarter 2020 earnings report, the company estimated Q1 revenue to be in the range of $48 million and $50 million.

In January, Hims & Hers went public in a blank check deal that valued the company at about $1.6 billion.

The digital health company reported a net loss of $51 million for the first quarter of 2021 compared to a loss of $6 million for the first quarter of 2020. The year-over-year increase in net loss was primarily driven by one-time stock-based compensation and transaction bonus expenses related to the merger with Oaktree Acquisition Corp., the company reported in its first-quarter 2021 earnings report.

Hims & Hers' adjusted EBITDA for the quarter was a loss of $8.6 million compared to a loss of $4.6 million for the first quarter of 2020. Despite the year-over-year increase, the result still beat the company's expectation of a loss between $9.5 million and $11.5 million for the quarter.

The company reported earnings per share of a loss of 14 cents,  topping the Zacks' consensus estimate of a loss of 15 cents in the quarter.  

RELATED: Hims & Hers expands into virtual mental health services

Revenue for the quarter also exceeded Wall Street estimates, as the consensus estimate was for revenue to come in at $49 million, according to MarketBeat.

Hims & Hers’ stock was up 4.76% to $10.56 Wednesday afternoon.

The quarter’s gross profit margin was 77% for the second quarter in a row, up from 69% in the first quarter of 2020. The company ended the quarter with 391,000 subscriptions on its platform, up 79% year-over-year.

During the company's Q1 earnings call Tuesday, Andrew Dudum, CEO and co-founder of Hims & Hers, said robust growth in the core Hims brand and accelerated growth in the Hers business line contributed to the company's outperformance in the quarter.

Revenue from the Hers dermatology product line more than doubled quarter over quarter, he said, noting that dermatology is a $44 billion market.

"Building on our momentum from last year, Hims & Hers kicked off 2021 with a very strong first quarter, delivering robust revenue growth of 74%, gross profit growth of 95%, and ending the quarter with 391,000 subscriptions on our platform, up nearly 80% year-over-year," he said.

The company, which combines telehealth and medication delivery, started with four products and has since added a women’s health business, called Hers, that focuses on birth control, sexual health and skin and hair care products.

RELATED: Wellness brand Hims & Hers moving deeper into healthcare with Privia Health partnership

Last spring, in response to the COVID-19 pandemic, Hims & Hers fast-tracked an expansion of its telehealth services to offer access to primary care and also rolled out online mental health services, starting with free support groups.

The company conducted more than 2 million telehealth consultations in 2020. Hims & Hers also collaborates with Privia Health to provide patients with direct access to providers for in-person visits and virtual primary care in a handful of states.

Dudum said he was optimistic about Hims & Hers' long-term prospects and its position in the market providing a personalized, digital healthcare experience to a "digitally native" generation of consumers.

"We are meeting the younger generation, millennials and Gen Z, where they are," he said, noting that the company's services are tailored to the "exact needs of each individual, across a broad range of conditions and preferences."

"Personalized medicine that is focused on the consumer is something that has never been done before at this level of reach," he said.

Hims & Hers reported that its net orders during the first quarter increased to 687,000 and averaged $74 per order, compared to 546,000 orders at an average price of $52 for the first quarter of 2020.

RELATED: Hims & Hers, Grapevine Health, ATA partner to advance equitable access to virtual care amid COVID-19

While some virtual care companies benefitted from consumers switching from brick and mortar doctor visits to telehealth during the COVID-19 pandemic, Hims & Hers' audience did not materially grow during the pandemic, Spencer Lee, the company's chief financial officer said during the earnings call.

"Our audience is a digitally native, mobile-first, younger demographic. They were never at brick and mortar to begin with. There is an opportunity to harness the enormous demand from this digitally native audience," he said.

Expanding virtual behavioral health

In an interview with Fierce Healthcare, Pat Carroll, M.D., Hims & Hers chief medical officer, said the company is focused on building its virtual behavioral health services to offer the full spectrum of care. 

"We are working to bring on providers, board-certified psychiatrists and psychiatric nurse practitioners, to enable consumers access to prescription medications, when it is appropriate for them," he said.

"We can now serve 90% of the population and within the next few months, we will be in all 50 states," he said.

Going forward, Hims & Hers is looking to expand in the at-home testing space through partnerships and is exploring broadening its scope of care into chronic disease conditions, Carroll said.

For the second quarter of 2021, the company expects revenue to be in the range of $55 million to $57 million and adjusted EBITDA to be a loss of $10 million to a loss of $12 million.

The company raised its revenue guidance for the full year 2021 to be in the range of $221 million to $227 million. Adjusted EBITDA is expected to be a loss of $35 million to a loss of $45 million for the year.