Why Hims & Hers’ Revenue Acceleration Is Coming With a Lower-Quality Profit Mix
$Hims & Hers Health Inc.(HIMS)$ delivered faster growth, more subscribers and higher spending per customer in the second quarter. Yet gross margin, adjusted EBITDA and cash flow all weakened, showing that international expansion and a shift toward branded medicines are making each dollar of near-term revenue less profitable.
The company reported after the August 10 market close for the quarter ended June 30. Revenue increased 38% year over year to $753.2 million, subscribers rose 19% to 2.89 million and monthly revenue per average subscriber increased 21% to $92. US revenue grew 16%, while international revenue jumped after the June acquisition of Australian telehealth company Eucalyptus. Hims & Hers’ official second-quarter release provides the operating metrics and financial statements.
The bullish thesis is that Hims is building a broad consumer-health platform rather than a collection of isolated prescription products. A larger subscriber base creates opportunities to add primary care, diagnostics and treatment programmes. The Eucalyptus acquisition gives the company a faster route into international markets, while technology and automation may eventually lower the cost of clinical support and customer service.
Management raised expected 2026 revenue to $3.1–$3.3 billion from $2.8–$3.0 billion and projected third-quarter revenue of $880–$900 million. It continues to target at least $6.5 billion of revenue and $1.3 billion of adjusted EBITDA in 2030.
The bearish evidence is in the income statement. Gross margin fell to 64% from 76%, adjusted EBITDA declined to $60.3 million from $82.2 million and the company recorded an $86.3 million net loss after earning $42.5 million one year earlier. Free cash flow remained negative at $68.2 million. Selling more branded medicines carries a lower margin than Hims’ earlier product mix, and acquisition, restructuring and legal-contingency costs added further pressure. Reuters’ August 10 report details the shift in product mix and the larger-than-expected loss.
HIMS Daily Chart
Hims closed regular trading at $31.77, up 0.6%, after ranging from $30.90 to $32.29. It then fell approximately 7% to around $29.55 after hours. That reaction places near-term support around $29.50–$30, with $31.75–$32.30 becoming resistance. Because after-hours markets are thinner, the next regular session is needed to confirm the signal.
The evidence leans neutral to moderately bearish in the near term. Revenue and subscriber momentum are strong, but lower gross margin, weaker adjusted EBITDA and negative cash flow reduce the quality of that growth. The cautious view would be invalidated by gross margin stabilising, free cash flow turning sustainably positive and international growth producing clear operating leverage; it would strengthen if losses widen despite another revenue increase. This is personal opinion for education and is not financial advice.
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