Hims & Hers' strong revenue growth streak continued in the third quarter as the digital health and wellness business brought in $227 million, up 57% from a year ago.
The company, which went public two years ago and sells hair loss and sexual health products, saw its online subscribers jump 56% year over year to 1.4 million in the third quarter, Hims & Hers announced in its third-quarter financial results Monday.
Online revenue was $219.7 million, up 57% from the third quarter of 2022.
Buoyed by this growth, Hims & Hers once again raised its 2023 revenue outlook and now expects to bring in between $868 million and $873 million, representing a year-over-year increase of 65% to 66% from 2022. That's up from its previous outlook of $830 million to $850 million the company provided last quarter.
The company now expects to be profitable by the first half of 2024.
"Accelerating momentum could bring attainment of this milestone as early as the fourth quarter of 2023," Yemi Okupe, Hims & Hers' chief financial officer, told investors and analysts during the third-quarter earnings call.
In the third quarter, Hims & Hers lost $7.6 million, or four cents a share, in the quarter, compared with a loss of $19 million, or nine cents a share, in the same period a year ago. The company posted another EBITDA-adjusted profitable quarter, bringing in $12.3 million compared to a loss of $6.1 million a year ago.
Hims & Hers' top line beat Wall Street analysts' estimates for the quarter, and its bottom line met expectations.
In previous remarks, company executives have projected Hims & Hers to hit $1.2 billion in revenue by 2025.
The multispecialty telehealth platform connects consumers to medical care for numerous conditions related to mental health, sexual health, dermatology and primary care.
The telehealth company sells prescription and over-the-counter drugs online as well as personal care products. Hims & Hers' core products include solutions for men for dermatology issues, hair loss and sexual health. Hims has since added a women’s health business, called Hers, with offerings that include birth control, sexual health and skin and hair care products. The number of subscribers to the Hers platform doubled year over year in the third quarter, Andrew Dudum, CEO and co-founder of Hims & Hers, said.
The company has increasingly focused on offering personalized treatments to consumers by leveraging technology and data.
"Our unique offering of personalized solutions at compelling price points resulted in increased market share across categories, such as sexual health care for both men and women and mental health. Our mental health offering surpassed 125,000 subscribers in the third quarter while maintaining triple-digit growth," Dudum said during the third-quarter earnings call.
The company is building out its analytics and artificial intelligence capabilities to leverage data to support precision treatments. It launched this week a new AI-driven service that helps providers prescribe personalized treatments.
Called MedMatch, the service taps into the company's massive platform that includes data from millions of patient encounters to identify in real time which treatments are best suited for each patient's needs. The service is initially deployed across its mental health service line, but the intention is to roll it out across the entire Hims & Hers platform, company executives said Monday.
"Psychiatric conditions result in some of the most frustrating patient experiences. With a wide range of pharmaceutical formularies and dosages, along with varying degrees of provider experience and expertise, treatment for mental health disorders can be long, burdensome, full of side effects and often feel like a process oriented around trial and error," Dudum told investors during the call.
He added, "In this initial psychiatric beta, MedMatch improved remission rates, time to remission and customer satisfaction. Within this initial cohort, providers are overwhelmingly utilizing the insights and recommendations MedMatch is delivering, helping providers improve their speed to decision for patients, which we believe will ultimately increase the likelihood of a better patient outcome."
Hims & Hers also announced Monday that its board authorized a share repurchase program of up to $50 million of outstanding Class A common stock over the next two years.
"The durability of our business and solid balance sheet will allow us to act on this opportunity without the need to sacrifice on either the current momentum of innovation or wealth of growth prospects in front of us," Dudum said.
Capitalizing on the booming weight management market and the growth of pricey GLP-1 medications, Hims & Hers plans to launch an offering in that category in a few weeks.
"Rolling out in the coming weeks, this offering will deliver a comprehensive portfolio of generic pharmaceutical treatments at mass-market pricing. Leveraging widely studied treatment compounds and sophisticated pharmacy capabilities, we believe wave management will deliver exciting treatment efficacy by helping curb cravings, reduce binge eating and supporting healthy metabolism," Dudum told analysts.
Dudum told investors he expects weight management to be an "extraordinarily valuable category" in the long term as employers continue to make investments.
"It affects a very large chunk of the population. I think what the GLP-1s have done in the last year have really educated the population that there are pharmaceutical treatments that are highly effective, and more of them are coming. There might be 15 to 20 different medications currently under clinical review that are showing incredibly good data profiles and safety profiles that in the next couple of years will be live in the market," he said.
During the summer, Hims & Hers also took its first step into cardiovascular health with the launch of Heart Health by Hims. The offering enables providers to personalize a treatment that combines ingredients found in clinically proven ED medications and statins, according to the company.
The company's strong financial performance also comes as big players like Amazon are moving into the healthcare market. Amazon now operates a virtual medical clinic that aims to treat common conditions like allergies, hair loss and skin conditions.
To make its supply chain more efficient, the company is working to verticalize its affiliated pharmacies. Nearly 80% of orders in the third quarter were filled through its affiliated pharmacies, Dudum said. "It is our expectation that nearly all orders will be filled via affiliated facilities by year-end. The successful completion of this effort is years in the making, and we have strong conviction that it will unlock further differentiation in pharmaceutical capabilities unmatched by the majority of offerings in the market," he told investors Monday.