Hims & Hers Health Reports Mixed Q2 Results
Shares of Hims & Hers Health experienced a 9% decline in after-hours trading following the release of second-quarter earnings that fell short of analysts’ revenue projections.
Financial Performance Overview
According to the average expectations of analysts compiled by LSEG, here are the key financial metrics for Hims & Hers:
- Adjusted Earnings per Share (EPS): 17 cents, compared to the anticipated 15 cents.
- Revenue: $544.8 million, falling short of the expected $552 million.
Despite the revenue miss, Hims & Hers reported a remarkable year-on-year revenue growth of 73%, increasing from $315.6 million in Q2 of the previous year. The company also announced a net income of $42.5 million, or 17 cents per share, which is a significant increase from $13.3 million, or 6 cents per share, in the same quarter last year.
For the upcoming third quarter, Hims & Hers anticipates revenues in the range of $570 million to $590 million, slightly below analysts’ consensus of $583 million. The adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) are projected between $60 million and $70 million, also beneath the $77.1 million expected by analysts.
Compounded Medications and Regulatory Challenges
In recent months, Hims & Hers has faced criticism for its sale of compounded GLP-1 medications, unapproved alternatives to popular diabetes and weight loss drugs. Compounded drugs can be produced in larger quantities to address shortages of brand-name options. However, the U.S. Food and Drug Administration (FDA) announced that these supply issues have been resolved, leading to scrutiny of companies like Hims & Hers that continue to market these compounded options.
Patients may legally obtain personalized doses of these alternatives under specific circumstances, such as allergies to certain ingredients in branded products. Hims & Hers has indicated that consumers could still access customized doses via its platform if clinically appropriate.
The company’s stock took a significant hit in June, plummeting over 30% after a partnership with Novo Nordisk was abruptly terminated. The pharmaceutical company cited Hims & Hers for allegedly violating legal restrictions on the mass sale of compounded medications under the pretext of personalization.
EBITDA and Investor Outlook
In Q2, Hims & Hers reported an adjusted EBITDA of $82 million, up from $39.3 million in the same period last year and exceeding the $73 million expected by analysts.
Investors are keeping a close eye on Hims & Hers as the company prepares to discuss its quarterly results during a call with investors at 5 p.m. ET.
As Hims & Hers navigates growth and regulatory challenges, its future trajectory remains a focal point for investors and market analysts alike.
