Hims & Hers reported its second quarter on Monday, 10 August 2026, after the market closed. We are writing about it today.
Errors or inaccuracies are possible. Spotted something that looks wrong? Write to me and I will correct it.
What Hims & Hers Does
Hims & Hers sells medical treatment on subscription, direct to the consumer, without going through a clinic.
The customer fills in a questionnaire online, a licensed physician reviews and approves, and the medication arrives at home each month. The main categories: hair loss, sexual health, skincare, mental health, and weight loss - the last of which turned the company into a stock market story.
And the business model is a subscription, not a sale. So the two numbers that matter are how many subscribers there are and how much each pays per month - and both rose this quarter.
What changed recently: the company left the United States. The Eucalyptus acquisition, which closed in June, took it into international markets - and that changes the entire shape of the report, as we will see shortly.
The Quarter
| The quarter | A year ago | |
|---|---|---|
| Revenue | $753.2 million | $544.8 million |
| US revenue | $621.8 million | $537.3 million |
| Rest of world revenue | $131.4 million | $7.5 million |
| Cost of revenue | $272.4 million | $128.6 million |
| Gross profit | $480.8 million | $416.2 million |
| Gross margin | 64% | 76% |
| Marketing expense | $262.2 million | $217.9 million |
| Net income (loss) | $86.3 million loss | $42.5 million income |
| Diluted EPS | $0.37 loss | $0.17 income |
| Adjusted EBITDA | $60.3 million | $82.2 million |
And the subscriber metrics:
| The quarter | A year ago | |
|---|---|---|
| Subscribers, end of period | 2.891 million | 2.439 million |
| Monthly revenue per average subscriber | $92 | $76 |
Revenue rose 38%, subscribers rose 19%, and revenue per subscriber rose 21%. By those three measures this is a very strong quarter.
And then you get to the second line of the table above.
The Number That Explains the Report
Cost of revenue rose from $128.6 million to $272.4 million - more than doubling.
Revenue rose 38%. Cost of revenue rose more than 110%.
Which took gross margin from 76% to 64% - a fall of 12 percentage points in a single quarter. For the first half as a whole, margin fell from 75% to 64%.
What makes this particularly significant: in a subscription model, gross margin is almost the whole story. A company charging $92 a month and keeping 76% of it is one business entirely; a company keeping 64% is a different one.
The release does not itemise the drivers of the margin decline, so we will not guess. What can be said from the data itself is that the mix changed dramatically: international operations went from roughly 1.4% of revenue to roughly 17.4% of it in one quarter. Correlation is not causation, and the release does not explicitly link the two.
And Hence the Loss
The company swung from $42.5 million of net income a year ago to an $86.3 million loss this quarter.
And loss per share: $0.37, against diluted earnings of $0.17 a year ago. For the first half as a whole: a loss of $0.78 per share, against diluted earnings of $0.37.
Adjusted EBITDA also fell, from $82.2 million to $60.3 million - even though revenue grew by $208 million.
And on cash: $35.9 million used in operating activities, against $19.1 million a year ago. Free cash flow was negative $68.2 million, close to the $69.4 million a year ago. On the balance sheet: $609.8 million in cash and equivalents.
The Growth, and What It Is Actually Made Of
This is the part to take apart carefully, because the 38% headline hides two different stories.
In the United States revenue rose 16% - from $537.3 million to $621.8 million. CFO Yemi Okupe describes this as an acceleration in the domestic run rate, and expects it to continue through the second half.
Outside the United States revenue rose from $7.5 million to $131.4 million - meaning international contributed roughly $124 million of a total increase of roughly $208 million. Close to sixty percent of the revenue growth came from outside the US, and most of it from an acquisition that closed in June.
That does not invalidate the growth - but it does mean it is not mostly organic, and that year-over-year comparisons in coming quarters will be more complicated.
Guidance: Raised
The company raised its 2026 revenue outlook.
For the third quarter:
- Revenue: $880 to $900 million - a jump of 17% to 20% over the reported quarter
- Adjusted EBITDA: $75 to $95 million, a margin of 9% to 11%
For the full year:
- Revenue: $3.1 to $3.3 billion
- Adjusted EBITDA: $275 to $325 million, a margin of 9% to 10%
Beyond that, the company repeated its 2030 targets: revenue of at least $6.5 billion and adjusted EBITDA of $1.3 billion, and said its conviction in those targets has increased.
A note on the EBITDA: the full-year range of $275 to $325 million follows a first half in which the company delivered $60.3 million in the second quarter. So here too, as with several of the day's reporters, the weight of profitability sits in the second half.
What Management Emphasises
CEO Andrew Dudum talks about an AI-based clinical engine:
"As we rebuild the consumer health experience from the ground up with a doctor-led AI clinical engine, the depth and breadth of our relationships with customers worldwide has never been greater"
And the CFO links the technology investment to the price paid by the customer:
"This momentum, combined with the meaningful efficiencies we're generating from our investments in AI and technology, positions us to make access to high touch, comprehensive care more affordable for our customers while also significantly expanding our reach internationally"
So the claim is that investment in technology will lower costs and allow a lower price for the customer. This quarter, that is not yet visible on the margin line.
The Market Reaction
The report was published after the close, so no regular session reflecting it has taken place yet.
The stock closed Monday at $31.77, against $31.59 on Friday - but that close preceded the report. The market's response will only be visible in Tuesday's session.
הזווית שלי
דעה אישית של אילן אברמוב - לא ייעוץ ולא המלצה
This is exactly the kind of report that starts an argument, and I think both sides are partly right.
The positive side is real and should not be dismissed: 2.9 million people pay this company every month, revenue from each of them rose 21%, and the international market opened up. A company that raises both its customer count and its price per customer in the same quarter is doing something right.
But gross margin is the story here, not growth.
A fall from 76% to 64% is not a fluctuation. It is a change in the structure of the business. And in a subscription company, gross margin is what determines what each customer is worth over their lifetime. If the company doubles in size while the margin falls by a third, it may be selling more and earning less on each unit.
And what I am cautious about is that the release does not explain the decline. I can see that international went from 1.4% to 17.4% of revenue in the same quarter the margin fell, and I can speculate that an acquisition operating a different local model carries a different cost structure. But that speculation has no confirmation in the release, so I am presenting it as a question rather than an answer.
What is clear: the company chose growth over profitability, deliberately. It raised the revenue outlook and not the EBITDA outlook in the same proportion, and it holds a long-term target of $1.3 billion of EBITDA by 2030. That is a bet that international scale pays off later.
What I will check next quarter is one line: gross margin. If it settles around 64% and starts climbing, the decline was a one-off cost of entering new markets. If it keeps falling, then what we saw here is not investment in growth but a deterioration in the quality of the revenue - and that will show up eventually in both EBITDA and the price.
