Online health and wellness company Hims & Hers reported fourth-quarter earnings that beat Wall Street analysts' expectations and gave upbeat guidance for 2025.
But shares of the company dropped 19% in after-hours trading as skittish investors are still concerned about shifts in the GLP-1 market. The company's stock has fallen 41% since closing at $66 per share on Thursday after the Food and Drug Administration (FDA) on Friday announced that semaglutide, the active ingredient in weight loss drugs Ozempic and Wegovy, is no longer in short supply.
That means compounding of semaglutide will no longer be permitted under current regulations. Shares of Hims & Hers plummeted 25% on Friday following the FDA announcement. The company's stock is up 56% year to date.
Hims & Hers brought in $1.48 billion in revenue in 2024, up 69% year over year from $872 million in 2023, the company reported in its fourth-quarter and full-year earnings report.
The company posted a profit of $126 million in 2024 compared to a net loss of $25 million a year ago. For the full year, Hims reported earnings of 53 cents per share. Adjusted EBITDA was $177 million in 2024 compared to $50 million in 2023.
Hims & Hers now boasts 2.2 million subscribers, a 45% jump from a year ago.
For the fourth quarter, revenue came in at $481 million, soaring 95% from $247 million in the same quarter a year ago. Hims & Hers reported $26 million in profit in the fourth quarter compared to $1.2 million in net income in the fourth quarter of 2023. Adjusted EBITDA was $54 million for the fourth quarter as compared to $21 million during the same period a year ago.
For the fourth quarter, the company reported earnings of 11 cents per share.
Analysts surveyed by FactSet had expected adjusted fourth-quarter earnings of 11 cents a share and revenue of $470 million.
The company's gross margin in the fourth quarter was 77% compared to 83% for the fourth quarter of 2023.
Chief Financial Officer Yemi Okupe told investors the decline in gross margin was due to scaling its GLP-1 offerings and strategic pricing for those products. "We expect margins to start to recover in the second quarter," he said on the company's earnings call Monday.
Hims & Hers gave a sunny outlook for 2025. It expects revenue to hit $2.3 billion to $2.4 billion, roughly 59% growth on the low end of the range.
The company also projected adjusted EBITDA of $270 million to $320 million.
In the first quarter, Hims & Hers projects revenue of $520 million to $540 million and adjusted EBITDA of $55 million to $65 million.
"We believe we are building the next generation healthcare platform, a platform that leverages personalization and technology unlike any traditional healthcare system, delivering access to affordable, on-demand, high-quality and precision-tailored care to millions of people, the future model of health and wellness that centers around the consumer and the consumer alone," CEO Andrew Dudum said on the call Monday.
Hims & Hers is focused on bringing disruption to healthcare similar to what Amazon did for e-commerce, Netflix for media consumption and PayPal for digital payments, Dudum said, namely, services that are "on-demand," "hyper-personalized" and transparent around pricing.
Business has been booming for the company, a multispecialty telehealth platform, with rapid growth in its weight loss offering, including compounded GLP-1 injection products.
Hims & Hers expects its weight loss business to bring in $725 million in revenue in 2025, Okupe told investors Monday.
But that figure excludes commercially available dosages of semaglutide, which the company will no longer offer after the first quarter, executives said.
Hims & Hers will now pivot to focus on other weight loss products given the FDA's announcement that the semaglutide shortage is resolved.
"We see our steady state weight loss offering being primarily composed of our evolving oral-based solutions, as well as liraglutide later this year," Okupe said.
The company plans to sell a generic version of Novo Nordisk's diabetes drug, liraglutide. Hims & Hers also plans to sell personalized doses of semaglutide "for the subset of consumers for whom it is a clinical necessity," he said.
In a letter (PDF) to shareholders, executives said the company has a legal pathway to sell "personalized titration schedules and dosage levels that are not essentially copies of commercially available medications" that allow providers to "meet the needs of individual patients regardless of shortage dynamics."
Hims & Hers said revenue from its non-GLP-1 offerings totaled $1.2 billion of the $1.48 billion that it brought in last year, suggesting the company sold roughly $200 million in compounded GLP-1 drugs last year.
The company expanded into weight loss in late 2023 with oral medication kits and added compounded GLP-1 medications to its offerings last May. Hims & Hers also offers subscriptions for Wegovy and Ozempic, starting around $1,800 a month, while compounded GLP-1 medications are priced at $165 a month for a subscription.
Hims & Hers is betting big on personalized treatments across its portfolio, which includes providing medical care for numerous conditions related to mental health, sexual health, dermatology and primary care.
The company has made significant investments to drive this strategy.
Last week, Hims & Hers announced it was buying at-home lab testing company Trybe Labs, which will allow the company to offer at-home blood draws and lab testing. The company said the acquisition will broaden its ability to offer a "wide range of personalized treatments, supplements and medications and accelerate the expansion into new high-impact clinical categories including low testosterone, perimenopausal and menopausal support."
The blood tests also can give the company data on hormone levels, cardiac risk, stress markers, cholesterol, liver function and other indicators important for understanding whole-person care and weight loss.
Lab diagnostics, combined with the company's investment in its affiliated pharmacies, will enable it to advance personalized offerings, the company said in its shareholder letter.
"My ambition is really to go from a place where we have 300 personalized treatments, which exist today on the platform, to a place in the not-so-distant future where you've got thousands of treatment variations," Dudum told investors Monday.
Two days later, Hims & Hers revealed it also bought a U.S.-based peptide facility based in California to expand its domestic supply chain.
"The peptide capabilities made possible through this acquisition position the company in the coming years to explore exciting advances in peptide innovation, including across areas of consumer need such as preventive health, metabolic optimization, cognitive performance, recovery science, and biological resistances," executives said in a press release.
The company also has been expanding its pharmacy operation capabilities. It bought MedisourceRx, a 503B outsourcing facility in California. It also built a fulfillment center in Ohio.
As Hims & Hers scales, it plans to up its investment in technology, Dudum said Monday.
"We're powering more than 10,000 visits on the platform per day. You need to be able to power 20, 30 and 40,000 visits on the platform per day. There's a real necessary investment across decision-making tools for providers to help them be more efficient and more precise and more long-term capabilities with AI that allow the customer to have a higher-touch experience after they've been treated," he said.
BTIG analyst David Larsen contends that Hims & Hers' obesity care program will thrive despite the changes in the GLP-1 market. In an analyst note, Larsen estimated the company had about 100,000 GLP-1-related members on its platform by the end of 2024, bringing in about $240 million in annualized revenue.
"Our view is that HIMS will work with solutions that 'personalize' compounded GLP-1 products, by adding vitamins or by changing the doses so that various members' metabolism can respond more effectively to GLP-1-related products. We believe that this 'personalization' process can bring HIMS through March, 2026, when HIMS can then start working with generic semaglutide," Larsen wrote in the analyst note.
Larsen also noted that Marty Makary, M.D., President Donald Trump's pick to lead the FDA, will have "influence over the enforcement of semaglutide compounding and personalization efforts."
Makary is an executive at Sesame, another telehealth company that connects consumers with physicians to prescribe compounded weight loss drugs.
"Since Dr. Makary has an interest in Sesame, we believe his views on compounded GLP-1s may be different than those of the current FDA administrators, and we find it interesting that this announcement was made before Dr. Makary's potential confirmation," Larsen wrote.