Bucking the downward market trend, Hims & Hers saw its top line jump 88% in the first quarter, buoyed by strong growth of its online health and wellness business.
The multispecialty telehealth platform connects consumers to medical care for numerous conditions related to mental health, sexual health, dermatology and primary care and brought in revenue of $191 million in the first quarter of 2023, up from $101 million a year ago, according to its first-quarter 2023 financial results released Tuesday.
The company, which went public two years ago and sells hair loss and sexual health products, narrowed its losses in the first quarter to a loss of $10.1 million, or a loss of 5 cents a share, compared with a loss of $16.3 million, or 8 cents a share, in the same period a year ago.
Hims & Hers' top and bottom lines beat Wall Street analysts' estimates for the quarter.
The company posted another EBITDA-adjusted profitable quarter, bringing in $6.1 million compared to a loss of $6.1 million for the first quarter of 2022.
Hims & Hers sells prescription and over-the-counter drugs online as well as personal care products. Its core products include solutions for men for dermatology issues, hair loss and sexual health. The company's women’s health business, called Hers, focuses on birth control, sexual health and skin and hair care products.
"Our platform is scaling in a unique way that is enabling us to leverage economies of scale that we believe few others can," Dudum said.
Hims & Hers' subscribers grew to over 1.2 million, up 87% year over year in the first quarter of 2023. "These results are in large part due to over 90% of our Q1 revenue coming from online recurring subscriptions," Andrew Dudum, CEO and co-founder of Hims & Hers, said in prerecorded remarks during the company's first-quarter earnings call.
"We're able to gather insights and feedback to garner better personalized customer care and preferences. That helps us refine our technology platform, which then informs our product road map to deliver access to more personalized products and treatments. All of this done in partnership and collaboration with leading clinical pharmaceutical specialists enables an experience, which we believe is unlike anything available in the market," he said.
Hims & Hers sells its health and wellness products directly to consumers through its online store, its app and through at least 13 retail partners including CVS, Walgreens, Walmart and GNC. The virtual care company also is teaming up with Carbon Health to offer patients in California direct access to providers for in-person medical appointments at clinics.
The company recently added five new members to its medical advisory board including specialists in obesity medicine and menopause, which could signal potential areas in healthcare where Hims & Hers plans to expand.
During the company, Hims & Hers also tapped psychiatry and behavioral sciences industry veteran Daniel Lieberman, M.D., to lead its psychiatry and mental wellness strategy.
"When we look at our market opportunity, there are more than 100 million Americans suffering from a chronic condition and in some cases, as high as 90% of the population have yet to be treated. These statistics are staggering," Dudum said.
Hims & Hers Chief Medical Officer Pat Carroll, M.D., told Fierce Healthcare in an earlier interview that the company planned to move into weight management, including prescription medications like GLP-1s, but wanted a "thoughtful, careful" strategy.
The price tag on weight loss drugs like Wegovy, which can cost more than $1,000 a month per person without insurance, is a challenge for a cash-pay business like Hims & Hers. The effectiveness of drugs like Novo Nordisk's Wegovy and Saxenda, which are approved for weight loss, as well as the diabetes drug Ozempic has created sky-high demand. Many telehealth and digital health companies have jumped into the market to offer prescriptions for GLP-1s as part of an existing weight loss or chronic condition management program.
"Weight management is a category that we do see as exciting because many of the characteristics of the conditions on our platform are chronic in nature, and that's also very emotionally resonant with the users on the platform. We do see ourselves eventually entering that category," Yemi Okupe, the company's chief financial officer, confirmed to analysts and investors during the earnings call Tuesday. "I think it's pretty early innings and we're going to do so in a very disciplined and thoughtful way that adheres to the standards of our platform. The recruitment of the experts will enable us to, at some point, enter that category effectively."
Okupe added, "We're looking for ways to do it in a way that's safe and effective. And also ways where we can add value to the overall category. What we're not after is just to be a me-too because our competitors are offering it. We really want to bring the distinct capabilities of our platform to enable something that's differentiated. I think at this point in time, it's a little bit too early to speak around how the economic system would work, but there are a multitude of ways to do it. We feel that we do have the time to ensure that when we do launch it, it lands with consumers. When ultimately we do that, that will probably be a more successful path over a longer, longer duration."
Hims & Hers raised its full-year 2023 revenue guidance to a range of $810 million to $830 million and adjusted EBITDA guidance to a range of $25 million to $30 million.
For the second quarter, the company projects revenue between $200 million and $205 million.