Hims & Hers Health, Inc. Reports Second Quarter 2023 Financial Results and Raises Full Year 2023 Outlook
- Q2 revenue up 83% YoY
- Adjusted EBITDA profitability of $10.6M
- Subscribers grew 74% YoY
- Raises full year revenue guidance to $830M-$850M
- Raises Adjusted EBITDA guidance to $35M-$40M
- None.
Revenue of
Net loss of
Subscribers grew to 1.3 million, up
Raises full year 2023 revenue guidance to a range of
“This quarter marks a significant turning point for Hims & Hers, where step-change progress was made in transforming our company from an access-oriented company, towards a platform offering a personalized patient experience,” said Andrew Dudum, co-founder and CEO. “The capabilities that we have spent years building allow us to offer unique and differentiated products across our current categories, as well as seamlessly enter new categories such as Cardiovascular Health and Weight Management. These are some of the most commonly occurring and emotionally resonant conditions, and by addressing them, we are one giant step closer towards having the ability to improve the life of every individual in the world.”
“We are excited by the progress made this quarter, which we believe sets that foundation for long-term growth at an attractive margin profile through distinct competitive advantages,” said Yemi Okupe, CFO. “Our economic flywheel is clearly working. It has enabled us to strategically bring highly sought after personalized products to very attractive price points, and simultaneously expand margins. We believe this uniquely positions us for significant market share gains.”
Key Business Metrics (In Thousands, Except for Monthly Online Revenue per Average Subscriber and AOV, Unaudited) |
||||||||||||||||||
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||
|
|
2023 |
|
2022 |
|
% Change |
|
2023 |
|
2022 |
|
% Change |
||||||
Subscribers (end of period) |
|
|
1,300 |
|
|
748 |
|
74 |
% |
|
|
1,300 |
|
|
748 |
|
74 |
% |
Monthly Online Revenue per Average Subscriber |
|
$ |
53 |
|
$ |
51 |
|
4 |
% |
|
$ |
55 |
|
$ |
52 |
|
6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net Orders |
|
|
2,109 |
|
|
1,385 |
|
52 |
% |
|
|
4,156 |
|
|
2,592 |
|
60 |
% |
AOV |
|
$ |
95 |
|
$ |
78 |
|
22 |
% |
|
$ |
93 |
|
$ |
78 |
|
19 |
% |
Revenue (In Thousands, Unaudited) |
||||||||||||||||||
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||
|
|
2023 |
|
2022 |
|
% Change |
|
2023 |
|
2022 |
|
% Change |
||||||
Online Revenue |
|
$ |
201,178 |
|
$ |
107,462 |
|
87 |
% |
|
$ |
385,353 |
|
$ |
201,564 |
|
91 |
% |
Wholesale Revenue |
|
|
6,734 |
|
|
6,101 |
|
10 |
% |
|
|
13,329 |
|
|
13,313 |
|
— |
% |
Total revenue |
|
$ |
207,912 |
|
$ |
113,563 |
|
83 |
% |
|
$ |
398,682 |
|
$ |
214,877 |
|
86 |
% |
Second Quarter 2023 Financial Highlights
-
Revenue was
$207.9 million $113.6 million 83% year-over-year. -
Gross margin was
82% for the second quarter of 2023 compared to77% for the second quarter of 2022. -
Net loss was
$(7.2) million $(19.7) million -
Adjusted EBITDA was
$10.6 million $(7.5) million
A reconciliation of Adjusted EBITDA, a non-GAAP measure, to net loss, its most comparable financial measure under generally accepted accounting principles in
Financial Outlook
Hims & Hers is providing the following guidance:
For the third quarter 2023, we expect:
-
Revenue of
$217 million $222 million -
Adjusted EBITDA of
$10 million $13 million 5% to6% .
For the full year 2023, we expect:
-
Revenue of
$830 million $850 million -
Adjusted EBITDA of
$35 million $40 million 4% to5% .
The guidance provided above constitutes forward-looking statements and actual results may differ materially. Refer to the “Cautionary Note Regarding Forward-Looking Statements” safe harbor section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
We have not reconciled forward-looking Adjusted EBITDA to its most directly comparable
Conference Call
Hims & Hers will host a conference call to review the second quarter 2023 results on August 7, 2023, at 5:00 p.m. ET. The conference call can be accessed by dialing +1 (888) 510-2630 for
About Hims & Hers Health, Inc.
Hims & Hers is the leading health and wellness platform on a mission to help the world feel great through the power of better health.
We believe how you feel in your body and mind transforms how you show up in life. That’s why we’re building a future where nothing stands in the way of harnessing this power. Hims & Hers normalizes health & wellness challenges—and innovates on their solutions—to make feeling happy and healthy easy to achieve. No two people are the same, so the Company provides access to personalized care designed for results.
For more information, please visit https://investors.forhims.com/.
Cautionary Note Regarding Forward-Looking Statements
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believe,” “estimate,” “anticipate,” “expect,” “assume,” “imply,” “intend,” “plan,” “may,” “will,” “potential,” “project,” “predict,” “continue,” “could,” or “should,” or, in each case, their plural, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, any statements relating to our financial outlook and guidance, including our mission to drive top-line growth and profitability and our ability to attain our long-term financial targets; our expected future financial and business performance, including with respect to the Hims & Hers platform, our marketing campaigns, investments in innovation, and our infrastructure, and the underlying assumptions with respect to the foregoing; statements relating to events and trends relevant to us, including with respect to our financial condition, results of operations, short- and long-term business operations, objectives, and financial needs; expectations regarding our mobile applications, market acceptance, user experience, customer retention, brand development, our ability to invest and generate a return on any such investment, customer acquisition costs, operating efficiencies and leverage (including our fulfillment capabilities), the effect of any pricing decisions, changes in our product or offering mix, the timing and market acceptance of any new products or offerings, the success of our business model, our market opportunity, our ability to scale our business, the growth of certain of our categories, our ability to innovate on and expand the scope of our offerings and experiences, our ability to reinvest into the customer experience, and our ability to comply with the extensive, complex and evolving regulatory requirements applicable to our business, including without limitation state and federal healthcare, privacy and consumer protection laws and regulations. These statements are based on management’s current expectations, but actual results may differ materially due to various factors.
The forward-looking statements contained in this press release are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in the “Risk Factors” section of each of our most recently filed Quarterly Report on Form 10-Q, our most recently filed Annual Report on Form 10-K, and any of our subsequent filings with the Securities and Exchange Commission (the “Commission”).
Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in reports we have filed or will file with the Commission, including our most recently filed Annual Report on Form 10-K, our most recently filed Quarterly Report on Form 10-Q, and any of our subsequent filings with the Commission. In addition, even if our results of operations, financial condition and liquidity, and developments in the industry in which we operate are consistent with the forward-looking statements contained in such reports, those results or developments may not be indicative of results or developments in subsequent periods.
Key Business Metrics
“Online Revenue” represents the sales of products and services on our platform, net of refunds, credits, and chargebacks, and includes revenue recognition adjustments recorded pursuant to
“Wholesale Revenue” represents non-prescription product sales to retailers through wholesale purchasing agreements. We sell only non-prescription products to wholesale partners. In addition to being revenue generative and profitable, wholesale partnerships have the added benefit of generating brand awareness with new customers in physical environments.
“Subscribers” are customers who have one or more “Subscriptions”, which are agreements pursuant to which they have agreed to be automatically billed on a recurring basis at a defined cadence. The Subscription billing cadence is typically defined as a number of months (for example, billed every month or every three months), which are excluded from our reporting when payment has not occurred at the contracted billing cadence. Subscribers can cancel Subscriptions in between billing periods to stop receiving additional products and services and can reactivate Subscriptions to continue receiving additional products and services.
“Monthly Online Revenue per Average Subscriber” is defined as Online Revenue divided by “Average Subscribers”, which amount is then further divided by the number of months in a period. “Average Subscribers” are calculated as the sum of the Subscribers at the beginning and end of a given period divided by 2.
“Net Orders” are defined as the number of online customer orders minus transactions related to refunds, credits, chargebacks, and other negative adjustments. Net Orders represent transactions made on our platform during a defined period of time and exclude revenue recognition adjustments recorded pursuant to
Average Order Value (“AOV”) is defined as Online Revenue divided by Net Orders.
CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share and Per Share Data, Unaudited) |
|||||||
|
June 30, 2023 |
|
December 31, 2022 |
||||
|
(Unaudited) |
|
|
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
65,417 |
|
|
$ |
46,772 |
|
Short-term investments |
|
127,725 |
|
|
|
132,853 |
|
Inventory |
|
21,417 |
|
|
|
21,562 |
|
Prepaid expenses and other current assets |
|
20,089 |
|
|
|
15,408 |
|
Total current assets |
|
234,648 |
|
|
|
216,595 |
|
Restricted cash |
|
856 |
|
|
|
856 |
|
Goodwill |
|
110,881 |
|
|
|
110,881 |
|
Intangibles, net |
|
19,962 |
|
|
|
21,841 |
|
Operating lease right-of-use assets |
|
4,735 |
|
|
|
4,936 |
|
Other long-term assets |
|
18,802 |
|
|
|
11,232 |
|
Total assets |
$ |
389,884 |
|
|
$ |
366,341 |
|
Liabilities and stockholders' equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
38,267 |
|
|
$ |
32,363 |
|
Accrued liabilities |
|
19,607 |
|
|
|
12,448 |
|
Deferred revenue |
|
2,058 |
|
|
|
1,472 |
|
Earn-out liabilities |
|
4,776 |
|
|
|
— |
|
Operating lease liabilities |
|
1,839 |
|
|
|
1,658 |
|
Total current liabilities |
|
66,547 |
|
|
|
47,941 |
|
Operating lease liabilities |
|
3,252 |
|
|
|
3,649 |
|
Earn-out liabilities |
|
— |
|
|
|
2,975 |
|
Other long-term liabilities |
|
14 |
|
|
|
35 |
|
Total liabilities |
|
69,813 |
|
|
|
54,600 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders' equity: |
|
|
|
||||
Common stock – Class A shares, par value |
|
21 |
|
|
|
21 |
|
Additional paid-in capital |
|
682,161 |
|
|
|
656,626 |
|
Accumulated other comprehensive loss |
|
(258 |
) |
|
|
(277 |
) |
Accumulated deficit |
|
(361,853 |
) |
|
|
(344,629 |
) |
Total stockholders' equity |
|
320,071 |
|
|
|
311,741 |
|
Total liabilities and stockholders' equity |
$ |
389,884 |
|
|
$ |
366,341 |
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In Thousands, Except Share and Per Share Data, Unaudited) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue |
$ |
207,912 |
|
|
$ |
113,563 |
|
|
$ |
398,682 |
|
|
$ |
214,877 |
|
Cost of revenue |
|
37,754 |
|
|
|
26,387 |
|
|
|
75,099 |
|
|
|
52,945 |
|
Gross profit |
|
170,158 |
|
|
|
87,176 |
|
|
|
323,583 |
|
|
|
161,932 |
|
Gross margin % |
|
82 |
% |
|
|
77 |
% |
|
|
81 |
% |
|
|
75 |
% |
Operating expenses:(1) |
|
|
|
|
|
|
|
||||||||
Marketing |
|
107,219 |
|
|
|
60,490 |
|
|
|
204,464 |
|
|
|
108,583 |
|
Operations and support |
|
29,227 |
|
|
|
17,448 |
|
|
|
55,409 |
|
|
|
33,131 |
|
Technology and development |
|
11,804 |
|
|
|
6,861 |
|
|
|
22,552 |
|
|
|
12,949 |
|
General and administrative |
|
31,144 |
|
|
|
22,567 |
|
|
|
61,657 |
|
|
|
44,378 |
|
Total operating expenses |
|
179,394 |
|
|
|
107,366 |
|
|
|
344,082 |
|
|
|
199,041 |
|
Loss from operations |
|
(9,236 |
) |
|
|
(20,190 |
) |
|
|
(20,499 |
) |
|
|
(37,109 |
) |
Other income: |
|
|
|
|
|
|
|
||||||||
Change in fair value of liabilities |
|
(173 |
) |
|
|
121 |
|
|
|
(468 |
) |
|
|
562 |
|
Other income, net |
|
2,239 |
|
|
|
402 |
|
|
|
4,116 |
|
|
|
722 |
|
Total other income, net |
|
2,066 |
|
|
|
523 |
|
|
|
3,648 |
|
|
|
1,284 |
|
Loss before income taxes |
|
(7,170 |
) |
|
|
(19,667 |
) |
|
|
(16,851 |
) |
|
|
(35,825 |
) |
Benefit (provision) for income taxes |
|
13 |
|
|
|
(12 |
) |
|
|
(373 |
) |
|
|
(106 |
) |
Net loss |
|
(7,157 |
) |
|
|
(19,679 |
) |
|
|
(17,224 |
) |
|
|
(35,931 |
) |
Other comprehensive (loss) income |
|
(147 |
) |
|
|
(145 |
) |
|
|
19 |
|
|
|
(331 |
) |
Total comprehensive loss |
$ |
(7,304 |
) |
|
$ |
(19,824 |
) |
|
$ |
(17,205 |
) |
|
$ |
(36,262 |
) |
Net loss per share attributable to common stockholders: |
|
|
|
|
|
|
|
||||||||
Basic and diluted |
$ |
(0.03 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.18 |
) |
Weighted average shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic and diluted |
|
208,422,825 |
|
|
|
203,949,535 |
|
|
|
207,785,104 |
|
|
|
203,326,215 |
|
| ______________ | |
(1) |
Includes stock-based compensation expense as follows (in thousands): |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
Marketing |
|
$ |
1,487 |
|
$ |
1,072 |
|
$ |
2,483 |
|
$ |
1,895 |
Operations and support |
|
|
1,854 |
|
|
667 |
|
|
3,008 |
|
|
1,153 |
Technology and development |
|
|
2,092 |
|
|
1,090 |
|
|
3,553 |
|
|
1,996 |
General and administrative |
|
|
11,412 |
|
|
7,803 |
|
|
21,968 |
|
|
14,444 |
Total stock-based compensation expense |
|
$ |
16,845 |
|
$ |
10,632 |
|
$ |
31,012 |
|
$ |
19,488 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands, Unaudited) |
|||||||
|
Six Months Ended June 30, |
||||||
|
|
2023 |
|
|
|
2022 |
|
Operating activities |
|
|
|
||||
Net loss |
$ |
(17,224 |
) |
|
$ |
(35,931 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
||||
Depreciation and amortization |
|
4,494 |
|
|
|
3,562 |
|
Stock-based compensation |
|
31,012 |
|
|
|
19,488 |
|
Change in fair value of liabilities |
|
468 |
|
|
|
(562 |
) |
Net (accretion) amortization on securities |
|
(2,517 |
) |
|
|
863 |
|
Benefit for deferred taxes |
|
(20 |
) |
|
|
(258 |
) |
Impairment of long-lived assets |
|
429 |
|
|
|
— |
|
Non-cash operating lease cost |
|
914 |
|
|
|
755 |
|
Non-cash acquisition-related costs |
|
1,066 |
|
|
|
58 |
|
Non-cash other |
|
75 |
|
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Inventory |
|
145 |
|
|
|
(6,115 |
) |
Prepaid expenses and other current assets |
|
(4,756 |
) |
|
|
(6,762 |
) |
Other long-term assets |
|
(32 |
) |
|
|
(27 |
) |
Accounts payable |
|
5,438 |
|
|
|
7,453 |
|
Accrued liabilities |
|
7,159 |
|
|
|
150 |
|
Deferred revenue |
|
586 |
|
|
|
(851 |
) |
Operating lease liabilities |
|
(928 |
) |
|
|
(772 |
) |
Earn-out payable |
|
— |
|
|
|
(6,848 |
) |
Net cash provided by (used in) operating activities |
|
26,309 |
|
|
|
(25,797 |
) |
Investing activities |
|
|
|
||||
Purchases of investments |
|
(65,376 |
) |
|
|
(89,146 |
) |
Maturities of investments |
|
72,334 |
|
|
|
101,259 |
|
Proceeds from sales of investments |
|
676 |
|
|
|
22,291 |
|
Investment in website and mobile application development and internal-use software |
|
(4,062 |
) |
|
|
(2,397 |
) |
Purchases of property, equipment, and intangible assets |
|
(5,312 |
) |
|
|
(276 |
) |
Deferred consideration paid for acquisitions |
|
— |
|
|
|
(459 |
) |
Net cash (used in) provided by investing activities |
|
(1,740 |
) |
|
|
31,272 |
|
Financing activities |
|
|
|
||||
Proceeds from exercise of vested stock options |
|
560 |
|
|
|
1,470 |
|
Payments for taxes related to net share settlement of equity awards |
|
(7,411 |
) |
|
|
(1,183 |
) |
Proceeds from employee stock purchase plan |
|
898 |
|
|
|
553 |
|
Payments for earn-out consideration for acquisitions |
|
— |
|
|
|
(23,014 |
) |
Net cash used in financing activities |
|
(5,953 |
) |
|
|
(22,174 |
) |
Foreign currency effect on cash and cash equivalents |
|
29 |
|
|
|
(52 |
) |
Increase (decrease) in cash, cash equivalents, and restricted cash |
|
18,645 |
|
|
|
(16,751 |
) |
Cash, cash equivalents, and restricted cash at beginning of period |
|
47,628 |
|
|
|
72,640 |
|
Cash, cash equivalents, and restricted cash at end of period |
$ |
66,273 |
|
|
$ |
55,889 |
|
Reconciliation of cash, cash equivalents, and restricted cash |
|
|
|
||||
Cash and cash equivalents |
$ |
65,417 |
|
|
$ |
55,033 |
|
Restricted cash |
|
856 |
|
|
|
856 |
|
Total cash, cash equivalents, and restricted cash |
$ |
66,273 |
|
|
$ |
55,889 |
|
Supplemental disclosures of cash flow information |
|
|
|
||||
Cash paid for taxes |
$ |
626 |
|
|
$ |
528 |
|
Non-cash investing and financing activities |
|
|
|
||||
Purchase of property and equipment included in accounts payable |
$ |
466 |
|
|
$ |
— |
|
Right-of-use asset obtained in exchange for lease liability |
|
591 |
|
|
|
— |
|
Vesting of early exercised stock options |
|
— |
|
|
|
76 |
|
Non-GAAP Financial Measures
In addition to our financial results determined in accordance with
However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with
Adjusted EBITDA is a key performance measure that our management uses to assess our operating performance. Because Adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure for business planning purposes. “Adjusted EBITDA” is defined as net loss before stock-based compensation, depreciation and amortization, acquisition-related costs (which includes consideration paid for employee compensation with vesting requirements incurred directly as a result of acquisitions, inclusive of revaluation of earn-out consideration recorded in general and administrative expenses), change in fair value of liabilities, impairment of long-lived assets, income taxes, and interest income. “Adjusted EBITDA margin” is defined as Adjusted EBITDA divided by revenue.
Some of the limitations of Adjusted EBITDA include (i) Adjusted EBITDA does not properly reflect capital commitments to be paid in the future, and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these capital expenditures. In evaluating Adjusted EBITDA, you should be aware that in the future we will incur expenses similar to the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or non-recurring items. We compensate for these limitations by providing specific information regarding the
Net Loss to Adjusted EBITDA Reconciliation (In Thousands, Unaudited) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue |
$ |
207,912 |
|
|
$ |
113,563 |
|
|
$ |
398,682 |
|
|
$ |
214,877 |
|
|
|
|
|
|
|
|
|
||||||||
Net loss |
|
(7,157 |
) |
|
|
(19,679 |
) |
|
|
(17,224 |
) |
|
|
(35,931 |
) |
Stock-based compensation |
|
16,845 |
|
|
|
10,632 |
|
|
|
31,012 |
|
|
|
19,488 |
|
Depreciation and amortization |
|
2,377 |
|
|
|
1,821 |
|
|
|
4,494 |
|
|
|
3,562 |
|
Acquisition-related costs |
|
583 |
|
|
|
150 |
|
|
|
1,229 |
|
|
|
266 |
|
Change in fair value of liabilities |
|
173 |
|
|
|
(121 |
) |
|
|
468 |
|
|
|
(562 |
) |
Impairment of long-lived assets |
|
— |
|
|
|
— |
|
|
|
429 |
|
|
|
— |
|
(Benefit) provision for income taxes |
|
(13 |
) |
|
|
12 |
|
|
|
373 |
|
|
|
106 |
|
Interest income |
|
(2,173 |
) |
|
|
(356 |
) |
|
|
(4,086 |
) |
|
|
(531 |
) |
Adjusted EBITDA |
$ |
10,635 |
|
|
$ |
(7,541 |
) |
|
$ |
16,695 |
|
|
$ |
(13,602 |
) |
|
|
|
|
|
|
|
|
||||||||
Net loss as a % of revenue |
|
(3 |
)% |
|
|
(17 |
)% |
|
|
(4 |
)% |
|
|
(17 |
)% |
Adjusted EBITDA margin |
|
5 |
% |
|
|
(7 |
)% |
|
|
4 |
% |
|
|
(6 |
)% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230807545114/en/
Investor Relations
Alice Lopatto
Investors@forhims.com
Media Relations
Press@forhims.com
Source: Hims & Hers Health, Inc.
