Hims & Hers Health Inc. Stock

And welcome to the Hims & Hers Health Second Quarter 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Bill Newby, Director of Investor Relations. Bill, please go ahead.

Good afternoon, everyone, and welcome to the Hims & Hers Health second quarter 2026 earnings call. On the call with me today are Andrew Dudum, our Co-Founder and Chief Executive Officer; Oluyemi Okupe, our Chief Financial Officer; and Mo ElShenawy, our Chief Technology Officer.

Before I hand it over to Andrew, I need to remind you of legal safe harbor and cautionary declarations. Certain statements and projections of future results made in this presentation constitute forward-looking statements that are based on, among other things, our current market, competitors and regulatory expectations and are subject to risks and uncertainties that could cause actual results to vary materially. We take no obligation to update publicly any forward-looking statement after this call, whether as a result of new information, future events, changes in assumptions or otherwise.

The risks, uncertainties and other factors that could cause actual results to differ from our forward-looking statements are described in our earnings release and SEC filings. Please see our recent earnings release and most recently filed 10-K and 10-Q reports for a discussion of these risk factors as they relate to forward-looking statements. In today's presentation, we also have certain non-GAAP financial measures. We refer you to the reconciliation tables to the most directly comparable GAAP financial measures contained in today's press release. You can find this information as well as a link to today's webcast at investors.han.com. After the call, this webcast will be archived on the website for 12 months. And with that, I'll turn the call over to Andrew.

Thanks, Bill. Good afternoon, everyone, and thank you for being here. This quarter, we made significant progress on building a first-of-its-kind health experience that proves it is possible to deliver access to world-class care on a global scale at a reasonable price. As our customer base grows and our influence on the industry deepens we are showing that a business can both take care of people and to be profitable. Before Yemi walks us through financials, I want to highlight 3 key areas driving our continued growth. First, our investment in AI and technology is delivering a health experience that we believe no other company can replicate. Our CTO, Mo ElShenawy, is on the call today to walk us through how that is coming to life in both deeper customer relationships and increasing business efficiencies. Second, our world-class infrastructure means we can not only support customers across a greater spectrum of needs from beginning to end but also safely enter more complex categories at a faster pace and at a greater scale than others in the industry. And third, our global reach. When paired with our technology and infrastructure has created a platform that shows customers and industry leaders alike that access to high-quality care can be personal and widely accessible. -- ins and hers is building something entirely new, and it is increasingly difficult to replicate. Nearly 3 million customers believe in the future of health that is proactive, personal and built for their lives. -- and we are thrilled to be the partner bringing it to them every day. Let's start with our investment in AI. By reading AI into the entire platform will deliver a fed AI-native health experience, we believe no other peer or LLM can match. No, our CTO, will walk us through what that looks like for our customers and the early success we've seen. -- but I want to start with the why. Why we are taking this approach and why we know it is the path to dramatically improving the care experience for customers everywhere. In the second quarter, we welcomed more than 300,000 subscribers, bringing our global subscriber base to nearly 3 million people. To put that into context, we are now serving a patient population that rivals some of the largest health care systems in the United States. And unlike Frontier AI companies that many people currently rely on for day-to-day advice we support customers through their entire health journey from their very first question to their clinical treatment and continued follow-up care. That end-to-end closed-loop relationship, combined with our scale, is incredibly powerful. Customer trust isn't something you can buy. It has to be earned. For 9 years, millions of people have trusted him and her to help them feel comfortable seeking care for conditions that should be normalized. .

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keeping people well. Our customers don't just ask us about their health or seek out specific treatments through a platform. They go on a long journey with us. And we believe the intelligence we are building around that relationship will make him and her their preferred everyday health partner. I'd now like to turn it over to Mo to speak more on how this is coming to life.

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Thanks, Andrew. Our AI center technical strategy is the difference between adding a feature and reimagining the entire customer experience. We are making AI load bearing not decorative. We are replacing the traditional telehealth model with something entirely new for our industry. The unified care experience, where customers care team lives in a single platform that already knows them. no porters, no starting over, no explaining yourself to a tool that can only give you 1 size fits all advice. -- just care that is built for you, guided by data delivered by clinicians and powered by seamless technology. This is the foundation of customer experience, which we plan to roll out across our entire platform over time. It leverages our closed-loop data, and it is becoming the basis for personalization across the entire journey. Smarter outreach, earlier risk signals and tools that help providers tailor treatment to each patient. We are seeing impacts for our customers and our business as a result of this approach. And I would like to walk you through both. To start, the AI native experience we just launched for her Weight customers is driving meaningful change for the people who come to us for care. We began a phased rollout in early July,

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our customers. In the coming months, we plan to add new AI talent to the team, continue to develop our existing talent and open an AI R&D lab in Menlo Park, where the team responsible for this innovation can work together in the heart of Silicon Valley. We expect this investment to pay for itself in short order. Importantly, we're not doing this to replace providers. but instead to elevate them. We feel strongly about always keeping clinicians in the loop and in charge of clinical decisions. At Hims & Hers, AI takes the routine work of clinicians plate so they can spend their time on judgment, complexity and the person in front of them. Our AI is bound by clinical protocols and guidelines developed by our medical experts, not the open internet, and every interaction is traceable and audited by design. We are taking this approach because we know AI models are becoming a commodity. And on their own, they are an incomplete part of a wider health experience. the only way to confidently build an AI infrastructure that can improve clinical outcomes is by tracking those outcomes. We believe we are the only company operating a closed loop that includes the intake, the treatment, the follow-up and the outcome at this case. And the system learns from all of it. We believe this will have a transformative impact on our business as well. As we roll out this new experience to more customers, we expect we will improve the quality and depth of care access on the platform which will, in turn, keep customers with us longer and bring new customers through the door. We believe this is something only we can do well.

Our advantage is being an everyday partner to customers rather than just the chat lives on their home screen. We walk alongside our customers throughout their entire journey. Helping them find qualified providers and treatments that work. We've built an AI infrastructure that learns not just what works, but what works best for each person. And we have the scale to do it with millions of customers globally, creating an ongoing cycle of improvement. Better Care produces better understanding and better understanding produces better care. This is how we are reshaping what the world thinks is possible in health, and we are only at the start.

I am excited to come back next quarter with updates on the progress we will continue to make here. Thank you.

Thanks, Mo. I'd like to move us to the second area of focus for today, our growing ability to do more for the people who trust us with their health and why that matters now more than ever. We can support customers across a wide spectrum of needs from beginning to end because we spent years building an infrastructure, no one has had. It's why we've been able to and will continue to enter more complex categories with more tailored accessible solutions. This is how we support the deep customer relationship you've heard me talk about so often. Our customers are increasingly trusting us with their care across more than one condition, and each additional need they bring to the platform, strengthen their trust and extends our relationship with them. We believe we are in the best position to help millions of people get proactive about more complex health challenges that often go unseen or ignored.

Testosterone is a powerful example. Most men experiencing low test testosterone, don't know it, and they chalk up symptoms to fatigue or aging. We've designed an experience that changes that. At-home blood collection, longitudinal tracking and provider gated treatment that adapts over time and that experience is resonating. Only three quarters after launch, testosterone is going faster than any other specialty outside of weight loss. That gives us real confidence in our ability to expand not only into injectable and oral TRT before the end of this year, but also to extend this model across other specialties. That's part of why we welcome Dr. Nant Vinjamori as our new Chief Medical Officer of HIMS, joining Dr. Pat's incredible team of medical leaders to provide our clinical backbone. Dr. Vinjamori more has more than a decade of clinical experience in internal medicine, primary care and longevity, which will be a critical part of how we build and expand our offerings in categories like hormonal health, longevity medicine and peptide therapy. His participation the recent PTAC hearing demonstrated just how valuable and trusted his voice is among industry leaders and regulators, and his expertise will be a fundamental part of how we accelerate into our next chapter.

We've developed the infrastructure to succeed in higher complexity categories. Over 1 million square feet of pharmacy and lab testing facilities, deep expertise in sterile compounding and a global reach. Our verticalization efforts are focused on delivering a better, higher quality experience at a price no one else can match, which brings me to peptides. Moments like this where a category is surging in popularity, while the market is struggling to find a sustainable way to support it is where our scale, infrastructure and ecosystem drive. We are currently developing a best-in-class peptide experience, including U.S. manufactured products, clinical led guidance and ongoing blood testing. While we wait to hear the FDA's decision on the 6 peptides recommended at the last month's PAC hearing, we've started validation and stability testing on APIs for those peptides developed in our Menlo Park facility. This will ensure we can bring them to the market with a safe, verified supply chain if the FDA decides to allow them for compounding.

In the meantime, we plan to offer access to already allowed peptide with safe and well-established supply chain before the end of the year. This will include solutions like Simoralin, glutifion and [indiscernible].

Finally, I'd like to discuss our third area of growth, which underpins everything we've already discussed today, our global scale. The promise of our platform started with what we could do for our customers in the U.S. where we have 5 specialties operating above a $100 million annual run rate. We are now bringing that comprehensive experience to customers across the world.

In June, we became the leading global consumer health platform when we closed our acquisition of eucalyptus. This was the largest acquisition in our company's history, and we now have three international markets outside of the U.S. also pacing above a $100 million annual run rate. This is the evolution of the company we always knew was possible. For the first time, a single platform can deliver a truly personal accessible and effective weight management experience to customers around the world, whether home is Boston, Bristol or Byron Bay. We plan to make this true for customers in all of our specialties, and I can't wait to share more on our global plans with all of you in the coming quarters. We have the ability to create sticky relationships with millions of customers worldwide, and we believe that makes us invaluable to our industry partners. We have been thrilled with the strength of our relationship with Novo Nordisk. By working with the leading innovators in one of the highest demand categories, we're expanding our addressable market, and we look forward to finding ways to work with other partners of the same caliber. We are now giving more people access to a world-class weight loss experience than any other digital platform in the world. This isn't just a sign of our scale. It's proof that health care is finally adopting the consumer-centric model that is already standard in industries like entertainment, travel and transportation. We are leading a transformation that removes the middle layer and ensure that access goes straight from innovators to consumers. We believe our growing scale and our increasing investment in our technology and infrastructure makes us structurally more efficient than anyone else in health care.

We plan to continue to leverage our leadership position to deliver more value to customers at better prices. Put more plainly, we're playing offense and we have the balance sheet and cost structure to sustain it in a way others cannot. This is the beginning of what our platform will deliver for both our customers and our industry partners. We believe we are not far from the future where all of us will be able to access preventive screening the innovative medications we need to feel great and the guarantee supporting our progress, all for an affordable monthly price and tailored for the life we are actually living.

I'll end by saying that this quarter has been about a single word proof proof that you can build a world-class health experience at global scale and a reasonable price, proof that deeper customer relationships and a profitable business aren't in conflict, they strengthen each other. We are proving that Hims & Hers is the destination for the most comprehensive personal health experience in the industry. Nearly 3 million people rely on us daily and that's a responsibility too big to meet anything less than the best technology, infrastructure, treatment providers and platforms that we can provide. You've heard me say this before that we're building the future of health, but that future is closer than it's ever been, and it's because of the strides we are making on behalf of our customers every day.

I'll now pass it over to Jamie to walk through the financials.

Thanks, Andrew. Today, I'll walk through progress made in the second quarter across our key growth levers as well as investments we are making to bring a better health experience to millions of consumers globally and capture the immense opportunity in front of us. In the second quarter, revenue grew nearly 40% year-over-year to more than $753 million, expanded assortment, new geographic markets and elevated consumer experience allowed us to add 300,000 net new subscribers and end the quarter with nearly 3 million subscribers on our platform. Domestic revenue growth accelerated to 16% year-over-year in the second quarter as U.S. operations generated $622 million of revenue. The pivot we made in March to expand the assortment of branded weight loss products on our platform was a key driver of the reaccelerating growth in the second quarter as more subscriber additions offset revenue recognition headwinds from the shift to a monthly cadence and branded weight loss offerings.

Increasingly, we view specialties with large audiences such as weight loss and sexual health as strategically important beyond just their direct revenue contributions as they provide advantages such as, first, a meaningful expansion of the cross-sell opportunities across the platform as consumers often seek treatment for conditions beyond weight. Cross-sell potential increases further as we extend the reach of lab testing on our platform, which can surface underlying needs for treatment within specialties like low testosterone and cardiovascular health that subscribers may not know they have and would not otherwise act upon.

What begins the weight loss treatment has the potential to become a pathway to providing access to care for a much broader range of subscriber needs. Second, it allows us to rapidly deepen the structured data set across our platform. the more subscribers we serve, the richer our data set becomes. This allows us to equip providers with tools to better match subscribers with effective treatments as well as design more customized subscriber tools for follow-up care. Each subscriber makes the platform smarter and better for the next.

Finally, our infrastructure is built to continuously capture economies of scale. As our subscriber base grows, we realize efficiencies across our supply chain, including our provider network, pharmacy fulfillment and follow-up care operations. This reduces our cost to serve, expanding our ability to reach more subscribers at accessible price points. Strength in our domestic operations has provided us with the conviction to invest internationally, and bring our value proposition to millions of consumers overseas.

In the second quarter, international revenue increased over 17 fold year-over-year to $131 million. We welcome the Equity team in June, deepening our presence in Europe, and extending our reach to Australian and Japanese consumers. Eucalyptus contributed approximately $40 million of revenue in the second quarter, further accelerating our already strong existing international business that grew 13% quarter-over-quarter organically. Our revenue footprint continues to rapidly diversify across specialties and now also across geographies. Hers is on track to deliver north of $1 billion of revenue this year, and new specialties such as low testosterone, continue to serve as strong growth drivers for Hims. In fact, in the coming quarters, we expect testosterone will become our sixth U.S. specialty to reach a $100 million annual revenue run rate. Our growing international business makes this diversification even more robust. The U.K., Australia and Germany are each already generating more than $100 million in annualized revenue with Canada also on track to join this group as well as we scale our generic weight loss offering.

We believe we have the infrastructure to improve the overall quality and efficiency of our platform as we continue to scale. Our aim is to continue to drive scale but do so in a thoughtful way, lays the foundation for robust EBITDA and cash flow generation. Our second quarter results reflect that discipline. Adjusted EBITDA in the quarter was $60 million, representing an 8% adjusted EBITDA margin. This represented a 1-point improvement quarter-over-quarter as operating leverage more than offset gross margin headwinds from the ongoing mix shift toward weight loss and accelerating revenue contributions from our international business. These results exclude approximately $81 million of nonrecurring costs incurred during the quarter, consisting of acquisition and transaction costs, primarily related to the closing of our Eucalyptus acquisition, restructuring costs following the strategic pivot in our weight loss specialty earlier this year and legal contingency accruals related to recent litigation with the FTC.

Let me briefly address that last item directly. As disclosed in our filings, following nearly 3 years of cooperation throughout the FTC's investigation and several months of good faith settlement negotiations, the FTC filed a complaint on July 29. Ultimately, we were not prepared to accept the terms we do not believe reflect the facts or the law. We are confident in our position and intend to defend it vigorously. These onetime costs primarily impacted G&A, operations and support costs during the quarter. Unless otherwise noted, the remainder of my commentary today reflects our results excluding these costs.

Gross margin in the second quarter was 64%, down approximately 6 points quarter-over-quarter on an adjusted basis. This compression reflects deliberate strategic action to scale the specialties and markets that we believe will drive the long-term value of our platform. We do not believe anyone else in consumer health has to scale, infrastructure and balance sheet to invest in this way. As branded weight loss products and international revenue become a larger portion of the business, we expect gross margins will remain below the levels we have historically achieved. What matters to us is that the underlying unit economics of the platform remains strong and that each of these investments expands the base of subscribers we can serve and positions us to unlock efficiencies across our platform over time.

In recent quarters, a meaningful portion of our investment has gone into technology and G&A. As we've leaned into the engineering and AI organizations and the leadership talent required to deliver a first-of-its-kind health experience to consumers around the world. That investment will continue, but we were encouraged to see modest sequential leverage across both lines this quarter, which we believe offer an early signal that investments here can be meaningfully accretive over time. Those investments are also beginning to generate cost savings elsewhere in the business. Operations and support delivered sequential leverage in the second quarter. This is a reflection of the improving efficiencies we are driving across our pharmacy operations as we increase throughput and early cost savings from the AI initiatives we have deployed across customer support. As Mo mentioned, successful pilots have demonstrated that AI has the capacity to drive a 50% reduction in non-clinical tasks handled by our support teams. Early signs in the same pilot are also demonstrating stronger engagement and lower cancellations for the participating subscribers. As these capabilities mature, we expect the overall subscriber experience to improve and our cost to serve to decline.

Finally, we continue to increase efficiency in our marketing spend as we scale. Marketing as a percentage of revenue improved 5 points year-over-year and 2 points quarter-over-quarter to 34%. Many of the drivers that remain consistent with past quarters, strengthening the retention, improving rates across the platform and years of brand investment, helping to lift customer acquisition and lower cost channels. With that said, we also see two new net dynamics that are presenting additional opportunities.

First, our collaboration with the pharmaceutical innovators like Novo Nordics are resulting in real marketing talents. We've seen groundbreaking treatments draw enormous consumer attention to categories like weight loss, but when people go looking for a trusted approachable place to start, they increasingly start with Hims & Hers. We built a platform that makes health simple, personal and easy to stay with, and that is allowing us to turn consumer curiosity into new care relationships in an increasingly efficient way.

Additionally, our expanded international presence unlocks the potential for larger global brand moments while also driving far greater optionality and where we can deploy capital to drive awareness of our platform. We believe we are in one of the most exciting stages in our history. It is a stage that demand we lean into investment, act decisively on the right M&A opportunities and attract the caliber of talent that enables us to capitalize on the significant growth run rate in front of us. Periodically, we expect this long-term oriented mindset will impact our GAAP results, and that was the case in the second quarter.

GAAP net income was a loss of $86 million, which was impacted by the previously mentioned nonrecurring acquisition, restructuring and legal costs. Over the last 12 months, our platform generated over $260 million of operating cash flow. That's inclusive of second quarter results or operating cash flow momentum took a pause due to the increased working capital demands associated with our rapidly expanding branded weight loss offering. During the quarter, operating cash flow was negative $36 million and free cash flow was negative $68 million.

Since the end of the first quarter, we successfully completed two actions that we believe will help ensure our balance sheet will not limit our ability to capture the growth opportunities in front of us. First, we established a $400 million receivables facility, giving us an efficient mechanism to convert the growing base of short-dated receivables generated by our branded weight loss offering into cash with capacity that scales alongside the business.

Second, we completed a convertible debt offering of over $400 million, further reinforcing our balance sheet. Our expectation is to resume free cash flow generation in the second half of the year. After accounting for the approximately $225 million upfront payment made at the closing of Eucalyptus, we ended the quarter with more than $840 million of cash and short-term investments. We also have $225 million remaining on our share repurchase program, which continues to give us the ability to act when we believe the market value of our stock disconnect from its intrinsic value. Taken together, our balance sheet or access to efficient sources of liquidity and the cash generation of our domestic business give us the flexibility to fund an accelerating platform while continuing to invest with conviction.

Our investments will continue to orient around our core strategic growth levers, which we believe will solidify the pathway of 2030 financial ambitions. Utilizing technology to elevate the quality of care for our users, expanding into new specialties brought in access to personalized care across specialties, leveraging partnerships to become a best-in-class curator of health services and expanding internationally.

I'll highlight a few of these where we expect heavier near-term investment. First, we are accelerating investment in our technology and AI capabilities. AI investments on our platform are driving a meaningfully better consumer experience that is resulting in a reduction in cancellations. Subscribers are able to get faster answers to questions alongside a more consistent and personalized experience. Early signals are already demonstrating AI's ability to improve the efficiency with which we serve our subscribers. We expect these benefits to compound a time and marking a powerful combination of stronger revenue growth and cost savings. Our expectation is that the AI investments will pay back within 12 to 18 months. More importantly, we believe these capabilities, combined with our scale, provide structural advantages to invest in ways that others cannot across key growth areas like weight loss in international markets.

Starting with weight loss, we will deploy a portion of efficiency improvements from AI into making our platform the most accessible place for consumers to begin their weight loss journey. The success across our AI efforts continues. Our expectation is that we will unlock more value for our weight loss subscribers by the end of the year in the form of lower prices and/or additional tools. This is a playbook we know well. And our sexual health and hair loss specialties scale allowed us to steadily lower prices for our customers, which expanded our addressable market, strengthen retention and ultimately drove stronger LTVs and margin expansion. We see a similar opportunity taking shape in weight loss, where our growing scale, improving operational efficiencies and AI-supported care model enable us to make treatment more affordable for more people. Delivering more for less is how we extend the advantages of our platform, and we believe and consumer health are positioned to do the same. We also expect to redeploy a portion of efficiencies to accelerate growth within our international business. We have the necessary talent to meaningfully evolve the way consumers access their health and wellness needs across Australia, Japan, Canada, Germany and the U.K. And we expect to invest aggressively in these markets as we build category leadership.

Importantly, adoption of weight loss solutions across many of these markets still lags the U.S. meaningfully and the same investments to strengthen our leadership position can accelerate growth of the category itself, expanding the market for us and for our industry partners. We expect these markets to emerge as meaningful profit centers as they scale.

Lastly, we will continue investing in the operational capabilities and clinical oversight required to bring new offerings to the platform responsibly, including higher complexity offerings like injectable testosterone in the near term and peptide therapies if the regulatory landscape allows.

With that, I will walk through outlook for the remainder of the year. In the third quarter, we're anticipating revenue in the range of $880 million to $900 million, representing a year-over-year increase of approximately 47% to 50%. We expect adjusted EBITDA to be between $75 million to $95 million, representing an adjusted EBITDA margin of 10% at the midpoint of both ranges. For the full year, we are raising our 2026 revenue outlook to $3.1 billion to $3.3 billion, representing a year-over-year increase of 32% to 41%. It is our expectation that 2026 adjusted EBITDA will be between $275 million and $325 million. These adjusted EBITDA and revenue ranges imply an adjusted EBITDA margin of 9% at the midpoint of both ranges.

To help contextualize our outlook, I will highlight a few points. First, we expect the gross margin dynamics we saw in the second quarter to persist through the second half as branded weight loss offerings and international revenue continue to grow as the share of our business. As I discussed earlier, this mix shift reflects a deliberate decision to scale the specialties and markets we believe will drive the long-term value of the platform. Second, we expect the compounding effect of the weight loss cohorts acquired throughout the first half to drive a meaningful step-up in adjusted EBITDA dollars in the second half, accompanied by continued leverage across our operating expenses as revenue growth in the U.S. reaccelerates.

At the same time, our guidance is designed to preserve the flexibility to lean further into the investment priorities outlined today as opportunities materialize. Finally, we expect our international business to generate at least $600 million of revenue in 2026, which will continue to operate at or near breakeven on an adjusted EBITDA basis as we prioritize scale. Our platform is delivering a combination of value to consumers that we believe cannot be found anywhere else in health care. We are addressing more health needs for our subscribers through an experience that becomes more personal with every interaction at prices that become more accessible as we scale. That combination is why more people are choosing our platform than ever before, and why they are staying longer entrusting us with more of their health. What's most exciting is that now this is a truly global story. The re-acceleration underway in our U.S. business is paired with leadership positions across key international markets, giving us more consumers to serve, more markets to scale and more ways to component our advantages than at any point in our history. All of which reinforce our confidence in achieving our 2030 ambitions of at least $6.5 billion in revenue and $1.3 billion in adjusted EBITDA.

Our success would not be possible without the significant efforts of Hims & Hers employees around the world. I'd like to thank them, our subscribers and our shareholders for supporting us in our mission to help the world feel great through the power of better health.

With that, I will now turn the call back over to Bill to kick off Q&A with two questions from our retail community.

Thanks, Yemi. And thank you to everyone who sent questions over the weekend. Our first question comes from the [indiscernible] community who would like to better understand how we're approaching the developing opportunity in peptides. They ask, following the July PAC recommendations for the 503 peptide list, can you provide more detail on your go-to-market time line once final FDA guidance is provided? Are you compliance ready to launch within weeks given your existing California facility, or are there additional buildup steps that pushed this into 2027? And do you still intend to let others go first, or has the July recommendation change that calculus?

Yes. Great question. Thank you for that. As we said in the past, I'm extremely excited about this category, holistically, the peptide and wellness category and was very excited to see 6 of the 7 go through successfully with the PTAC meeting at the FDA a couple of weeks back. To your question on timing, we've made incredible progress in the last couple of quarters on the clinical guidelines as well as the supply chain that gives me confidence that if and when the FDA does decide to move these peptides to the Category 1 list, we'll be able to move extremely quickly. Specifically, we brought on Dr. [indiscernible] Vanjamori as our Chief Medical Officer on the HIM side of the house, who is an expert across hormonal therapy longevity and peptide therapy. He's been building out the clinical protocols, the guardrails, the dosing regimens and the provider training. In addition, in Menlo Park in our API facility, where we have committed to actually manufacture the raw APIs in the U.S., which we think is extremely rare and likely the only company capable of delivering that, we are in the process of actually putting on PPC 157 on distability and validation testing to be ready shortly and following course with the remainder. So in the meantime, as we await FDA decision-making and rule making, we will be moving forward with the word wellness and peptide category with a broader set of offerings. These include things like [indiscernible], glutathion [indiscernible] and other wellness therapies and injections, and we expect hopefully that to come out by the end of this year.

Great. Thanks, Andrew. The next question comes from Tom T., who asked about the investments we're making in AI and our longer-term vision for kind of what the Hims & Hers customers experience can look like, yes. Between labs, potential wearable partnerships and the treatment and outcome data you're collecting for millions of customers? Is there a plan to bring all of that together so a customer can eventually see something like a real-time health score, where the AI is connecting those data points, flagging things early and recommending next steps before they become actual problems. How far away do you think something like that is? And is that something the team is actively building toward today?

Absolutely. The short answer to that question is yes. We are also hiring. So you're able to piece a lot of that together, so please apply. But the vision really is to be able to bring together all of the elements with 360 [ persons ] health, whether that's variable data, our own devices, external devices, lab testing data, our own labs, external labs, all the way to preventative screening and genetics to be able to have an ecosystem of doctors, specialists, coaches, agents, pharmacists, on call for you, 24/7 actively monitoring how best we can assist you with living healthiest and best life. I think this sets up very well for a natural membership offering for Hims & Hers, as you can imagine, coming out in the coming year or two. I think this also sets up a really powerful freemium offering for Hims & Hers, where patients could just have the opportunity to come leverage these tools that him and her in a free manner to just get benefits of the 360 view of their health, a unified platform with an ecosystem, all powered by AI on the bottom layer of actual doctors, actual trained nutritionalists as well as agents and care pilots. And so when you really step back, like what this is that we're building is currently available. This is what most would consider concierge care today. And it costs anywhere from $50,000 to $150,000 annually. I think in the simplest way, my vision is to make that same level of proactive, preventative, always-on care affordable to everybody globally for a price that is universally accessible.

[Operator Instructions] Your first question comes from the line of Maria Ripps with Canaccord.

I wanted to ask about the Novo partnership, which clearly has been very successful on the volume side. Now that the branded cohorts, a couple of quarters kind of in a couple of quarters mature, how does the retention and engagement compared to what you saw historically across other products? And then how are you thinking about sort of deepening the Nova relationship from here?

Maybe me I can speak a little bit about the relationship generally and opportunities, and then you can dive into the retention and profiles Maria, a high level, we're extremely excited by the ongoing relationship with Novo Nordisk, top down from Mike as CEO, the team has been incredibly collaborative in thinking through ways in which we can broaden access to patients in the U.S. The Wegovy pill has had a staggering launch. And I think we are the largest or one of the largest players that are helping people access that pill, which has really opened up the floodgates of people who had injection fears, price point fears and [indiscernible]. And so very strong relationship domestically. We also have extremely strong relationships internationally and are adopting many of those relationships from our acquisition with Eucalyptus. So this is across Germany, across the U.K., where we were actually able to help generate tens of thousands of individuals on a wait list for the Wegovy pill within just a couple of days in some of these markets as they were getting ready to prepare the lawn. I think there's an increasing amount of collaboration around key strategic markets that are valuable to both businesses and thinking about how to collaborate into expanding the market and getting people more access I think there is increasing ability to share data with regard to what's working for patients, adherence benefits, what we're seeing with regard to side effects or how to mitigate that in different dosing regimens. So I do think there's a really powerful flywheel here when you start getting the leading drug manufacturers actually closer to the data on the ground of the consumers in a way that can not only help when it comes to commercializing therapies but also thinking through how we bring new therapies to market. And so I think there's a growing set of opportunities that I think both of the teams are very excited by.

And then the second part of your question, Maria. Really, I think we're seeing retention in with our expectations. Part of the Q2 or large part of the [indiscernible] was a result of really the weight category amongst others being much stronger than we thought. As we saw that, that's what gave us conviction to elevate the guidance for the rest of the year. For us -- it's even more exciting for us is that we see the experience continue to get better. And in the prepared remarks, we spoke around how with a more immersive experience through the next evolution of the app and some of the AI tools as well as physical tools like the scale of the consumers are getting, that enables more connectivity with their providers. And ultimately, we're already seeing signs of lower cancellation rates for the court of users that are receiving that. And as we look to continue to investment experience, and we see opportunities as we get more efficiencies to make price points more affordable, we see an already smaller retention rate getting stronger and stronger.

Your next question comes from the line of Ryan MacDonald with Needham.

Congrats on a nice quarter. Andrew, as we think about, as you're integrating Eucalyptus now and the international acquisitions you've made, can you just talk about what some of the key specialty areas that you're seeing the most success with in those international markets, and where you see the potential low-hanging fruit to expand assortment in some of those markets, particularly for eucalyptus that are already quite strong within the U.S. market?

Yes. Great question, Ryan. Some of the specifically Eucalyptus has done a wonderful job building real dominance in the U.K., Australia and Germany and newly in Japan and Canada in the way they lost category. So they are serving that demographic very well, one of the leading, if not the leading providers in those markets and in aggregate, the leading digital health providers in those markets. where we think there's real opportunity is actually bringing some of the core specialties that the Hims & Hers business have gotten very good at here domestically overseas. And so these include things like testosterone replacement therapy, menopause therapy for women. This is basic assortment in the dermatology categories such as men's and women's hair, men's and women's sexual health and reproductive health as well as categories like peptides in some of these markets where actually there are different regulatory opportunities to expand and allow patients to have some of these more cutting-edge longevity therapies. And so I would say, at the very high level, there is some very low-hanging fruit in bringing some of the best and highest performing and even some of the fastest growing like testosterone categories that are here domestic into at least 5 or 6 markets overseas with the engine and the go-to-market commercial strategy that the Eucalyptus team is already well equipped to deliver on.

Appreciate that. And then as a follow-up, maybe just a clarifying point within the peptides. I know you talked about -- addressed it a little bit in the question earlier and all the preparations going on there. But in terms of when you could -- or I guess maybe the catalyst you're waiting for, would you be waiting for sort of the full formal FDA guidance that's in the register that can take sort of the 6- to 12-month process to start selling those 6 of the 7? Or does it simply sort of the proposed rule-making process kicking off with the commenting period, et cetera, sort of act as more of the signal sort of a nearer-term opportunity for you to start selling those 6 approved peptide?

Yes. Thanks, Ryan, for the clarification. Our operating model today is that we are waiting on full and final rule making from the FDA. And so that could come in a lot of different forms and factors that could come on different time lines. But we think it's really important for them to complete that process before we bring this to market.

Your next question comes from the line of Mark Mahaney with Evercore.

Two questions, please. Just on the Eucalyptus contribution in the back half of the year. First, to the EBITDA kind of shading down or cut in the full year guidance? I know you mentioned investing in AI and in further international expansion. But as [ Eucalypsis ] dilution part of that kind of shade down in the EBITDA growth for the full year? And then just on the U.S. acceleration, you saw in Q2 and you talked about -- I think it's implied in your guidance for the back half of the year. And I think that's largely due to the kind of the broadening of the weight loss offerings that you have. Could you -- would you want to help us quantify like how much more acceleration we could expect in the back half of the year?

Yes. Thanks for the question, Mark. Let me take the second question in that effectively the catalyst behind the first. So we are expecting a great acceleration on both revenue and EBITDA in the U.S. in the back half of the year. Really, one of the driving forces behind that are a few things. The first is, just given the switch, particularly on the branded products to a monthly cadence as you start to see more cohort stock due to greater tenure of the offering on the platform. That inherently results in both more revenue EBITDA. So we would expect those effects to start to compound in both Q3 as well as Q4. You already saw that to some degree with the roughly a 12-point acceleration in the first quarter. I think to compound that as the experience gets better with some of the elements that Andrew mentioned as well as Mo mentioned in the prepared remarks around the AI and some of the tools that subscribers will be equipped with inevitably, our view is that the ability for retention to get strong role increases, which will drive that acceleration further. But I think what we're seeing is as we see efficiencies across the portfolio, both in the U.S. and particularly some of the early statements that we're receiving from AI, that will be reinvested into really two areas. The first is taking some of the savings and reinvesting it into a more immersive weight experience that passes more value to the consumers. That can be in the form of making the price points more accessible. It can also be in the form of more tools in thinking through how to increase the stickiness on the platform. The other area where we're prepared to invest, we see an ability to secure leadership across many areas as we look at particularly attractive markets in Western Europe, like the U.K., Germany, as well as Canada, having the strength of the U.S. and domestic portfolio to really lean in there something that's reflected in our guidance. So our guidance is the flexibility to make price points more accessible here domestically, but also relates to as we see opportunities to invest in ways that adhere to our capital allocation standards of the one year or less breakeven period. We will do those particularly across international markets.

Your next question comes from the line of Craig Hettenbach with Morgan Stanley.

On the push to drive AI adoption, anything unique on the Her side in terms of starting there and then the rough timing of when you'd expect to see that on the Him side as well?

Yes. Thanks, Craig, for the question. We're incredibly excited by this, as we shared in the prepared remarks. I think seeing on the Her side, meaningful acceleration in engagement. Patients are interacting and messaging with their care teams 33x as much with the new care operating plan and operating system that we've rolled out. And at the same time, the actual tasks for humans has dropped 50% when you're talking about nonclinical tasks. And so this really rare combination of extreme engagement that we know has long-term trickle-down benefits when it comes to cancellation reductions and retention as well as very real cost savings that, to Yemi's point, we can immediately redeploy into more aggressive pricing and market capture opportunities in the weight category as well as the international category. We started with the women's weight loss business because that is one of the highest engagement parts of the business. It's a category that there are a tremendous amount of questions. There's an incredible complexity with regard to injection fears, dosing regimens, side effect mitigation. It is just -- it is probably the most complex category we operate in today. And so building the operating system and kind of this AI platform that can connect to pharmacists, a doctor, care coaches, agents all together in that environment, we thought was the best place to start. We are quickly rolling this out to other markets. We plan to bring, as we've shared some of the other therapies and peptides to market that are on -- that are currently already on the Category 1 list as well as expanding the TRT offering with injection, testosterone as well as oral testosterone. And the plan is to be able to have this new experience powered by AI for some of those new category launches on the Him side of the business as those come out in the next couple of quarters.

That's helpful. And then just a quick follow-up, Andrew, as you kind of step on the gas here with new product categories. You've talked about all the technology capabilities in AI as well as kind of the reach and capacity. How are you prioritizing these new categories? Is there anything in terms of like thresholds or things that you look at from a market perspective that kind of greenlight some of these new categories versus others that maybe you might ultimately take more time with the launch?

Yes, it's a great question, Craig. We're out of scale now with nearly 3 million subs globally, where the patients do a fantastic job of telling us where the business needs and the clinical needs exist. And so really core to this strategy was the lab testing infrastructure that we acquired and have rolled out in the last few quarters, that will be bundled with a lot of these categories that we were just talking about and essentially free with your care. And what we've seen from that adoption is exactly where we need to be going. We're going towards metabolic health with broader set assortment on the GLP-1 side. We're going towards hormonal health because we're seeing both on men and women massive overlap between those patient populations or going towards sleep and recovery and longevity focus because that's what people are telling our providers that they're interested in or struggling with. And so we're at this really powerful point in the flywheel where the scale of the business, the high engagements we have with patients on singular categories, really feeds and accelerates our understanding of new categories or our understanding of the cross-sell potential of those categories and ultimately what the overlap will be. And so I think over time, that assortment and that breadth is a massive competitive advantage. As we shared in the remarks, with testosterone, we're approaching 6 categories, growing over $100 million run rate. I think that assortment is going to continue to accelerate the pace at which we can bring new things to market and the pace at which they hit that $100 million run rate threshold, just because they will be more informed by existing patient populations with much more clear targeting and the ability to bridge patients to more comprehensive care.

Your next question comes from the line of Eric Percher with Nephron Research.

Andrew, I'd like to follow up on that comment about 3 million subs. I'd be interested to hear your perspective on the recent growth, and how much of that may be a bolus that was waiting versus the ability to maintain it. And then Yemi, I also want to check to see that that growth that we saw quarter-over-quarter include Eucalyptus subs as well in a meaningful fashion.

Yes. Great question, Eric. I'll let Yemi speak to Eucalyptus contribution. I think a big part of this came from the pivot in the business to expand the offerings on the weight loss side to bring some of the new therapies onto the platform. There's obviously just a tremendous amount of demand for these therapies. And I think building the business model in such a manner that allows us to have very close and mutually beneficial relationships with large drug companies and the large biotech companies. It's going to continue to allow for this type of accelerated growth as new therapies come to market where consumers have excitement, and there's great business potential. At the same time, I think there's been also a re-acceleration across categories. most notably on the men's hormonal side of the business within just a [indiscernible] -- within a couple of quarters, has been the fastest growing business outside of weight loss and quickly, we'll be eclipsing that $100 million threshold. And so we're continuing to lean in on that category, expand assortment in that category, bring that overseas. But generally, I think it's a nice combination of the business model, expanding great options on the metabolic side of the house as well as the traditional core HIMS business is reaccelerating as we put more focus into some of these new initiatives.

I am going to hit the second part of your question, Eric. The short answer is Eucalyptus as well as [indiscernible] revenue is included in the second quarter results. On the revenue side, it's roughly $4 million coming from Eucalyptus overall and material portion behind the guide is really just the accelerating domestic revenue. The assortment in the weight category definitely has been a catalyst towards us being able to accelerate the trajectory on both revenue and subs there, but then also on the hand side, as we see continued success with things [indiscernible] testosterone offering and some of our other new ones. As this scale, we continue to see the domestic business drive which provides more dry powder in from the international markets.

Your next question comes from the line of Glen Santangelo with Barclays.

Two quick ones for me. Yemi, I just want to follow up on Eucalyptus question. In the past, you told us that Eucalyptus was currently generating about a breakeven margin. Is that still the case? And any help there you can give us? And then my follow-up is really around longer-term margins. If you look at your 3Q guide, the implied margins in the fourth quarter, I think you're calling for a 12% EBITDA margins or 12% at the midpoint. Is that math correct? And is it reasonable to use that as sort of a jump-off point when we think about fiscal '27 appreciating that's still a few months away. And I appreciate you don't want to say much about fiscal '27. But I'm just trying to think about the margin trajectory given you're sort of confirming that 20% margin in 2030. Any sort of insights you can give us to how we should think about that would be helpful.

Yes. Thanks for the question, Glen. To take the first part of your question for Eucalyptus, I think that roughly they were running at breakeven to moderate losses. I think as we see continued strength in the U.S., the international markets are something that we're prepared to lead in to you in a thoughtful way. Collectively, we do expect those to be near or at breakeven. But as opportunities permit. I think that's one of the beautiful things about the domestic and the best domestic federation that we're seeing that provides the opportunity to invest there. On your second question around just the longer-term margin profile, not necessarily prepared to speak to 2027 yet, but really just kind of reorient towards what does our philosophy look like for the next couple of quarters as we continue to lean in and invest. And really, that's towards if, first and foremost, strong free cash flow generation as well as strong EBITDA dollar generation on an aggregate basis. And so you see that the stacking of the cohorts, particularly in the weight loss category that we spoke around before as well as some of the benefits coming from the ramp in neuro specialties that Andrew mentioned, those things give us conviction to be able to invest aggressively but still drive the strong cash flow generation in EBITDA dollars.

We have reached the end of the Q&A session. This concludes today's call. Thank you for attending. You may now disconnect.

Hello, and thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the Hims & Hers First Quarter 2026 Earnings Call. [Operator Instructions]

I would now like to turn the call over to Bill Newby, Head of Investor Relations. Bill, please go ahead.

Good afternoon, everyone, and welcome to the Hims & Hers Health First Quarter 2026 Earnings Call. Before we dive in, I want to provide an update on our approach to earnings communications. Moving forward, the company is transitioning to publishing an annual shareholder letter, and we'll continue to provide regular updates through our quarterly earnings call, earnings release and supplemental materials. We believe this approach will enable our shareholder letter to reflect the long-term nature of our strategy and focus on the sustained value we're building.

On the call with me today is Andrew Dudum, our Co-Founder and Chief Executive Officer; Yemi Okupe, our Chief Financial Officer; and Mo ElShenawy, our Chief Technology Officer.

Before I hand it over to Andrew to remind you of legal safe harbor and cautionary declarations. Certain statements and projections of future results made in this presentation constitute forward-looking statements that are based on, among other things, our current market competitors and regulatory expectations and are subject to risks and uncertainties that could cause actual results to vary materially. We take no obligation to update publicly any forward-looking statement after this call, whether as a result of new information, future events, changes in assumptions or otherwise.

The risks, uncertainties and other factors that could cause actual results to differ from our forward-looking statements are described in our earnings release and SEC filings. Please see our recent earnings release and most recently filed 10-K and 10-Q reports for a discussion of these risk factors as they relate to forward-looking statements.

In today's presentation, we also have certain non-GAAP financial measures. We refer you to the reconciliation tables to the most directly comparable GAAP financial measures contained in today's press release. You can find this information as well as a link to today's webcast at investors.hims.com. After the call, this webcast will be archived on the website for 12 months.

And with that, I will turn the call over to Andrew.

Thanks, Bill. Good afternoon, everyone, and thank you for joining us. It's been a strong meaningful start to the year at Hims & Hers. We've made significant progress on the strategic objectives that we believe will define our platform for the next decade. Importantly, 2026 has proven to be a year of accelerating growth. which reinforces our confidence in our ambitious 2030 targets.

Before Yemi takes us through our results, I want to highlight a few key areas that underscore our progress. First, our U.S. business is positioned to accelerate as we introduce new specialties and shift our weight loss strategy toward a globally unified approach. Second, our global scale is quickly becoming a competitive advantage, not only because it expands our TAM, but because it expands our value to industry partners and strengthens the network effects of our platform.

Third, we are deepening our customer relationships while filling real painful gaps in the traditional care system with a more proactive care offering. This means we are creating an opportunity for longer-term relationships with our customers. Fourth, continued investment in our data and technology infrastructure is building an increasingly agile platform that gets smarter with every new customer. With tens of millions of customer touch points annually in the closed loop provider network, we are matching a powerful data set that is becoming harder to replicate. These investments are enabling faster, more efficient geographic and product expansion, more valuable customer interactions and deeper platform engagement.

With that foundation, Hims & Hers is on its way to becoming an everyday health partner, not just for the nearly 2.6 million people we currently serve, but for millions more around the world.

Let's start with the building momentum we're seeing in the U.S. The breadth of care we can provide is becoming a real strategic advantage, giving customers more ways to start with Hims & Hers and more reasons to stay with us over time. We see momentum in newer specialities like testosterone, menopause and labs and our expanding selection of branded GLP-1 solutions is driving accelerating momentum in our weight loss business. The number of people we can help has never been larger or more diverse and we're working to ensure they have access to the broadest array of treatment options possible.

In weight alone, more than 100 million adults in the U.S. are struggling. Demand for effective accessible treatments is increasing and the market is evolving rapidly to meet this need with more form factors and lower prices. In March, we announced a strategic shift in our weight loss business that recognizes this evolution and focuses on providing customers on our platform with access to the broadest possible assortment of innovative medications, alongside a comprehensive experience that includes access to the data-driven clinical care and lifestyle support our customers have come to expect.

Platforms like ours are the place pharma, biotech and diagnostic companies are increasingly relying on to reach more people with innovative treatments and services. For example, our collaboration with Novo Nordisk shows what's possible when health innovators work together to help more people feel great. We are seeing adoption in weight loss near record levels, even beyond the demand we saw following this year's New Year's and Super Bowl campaigns.

Within 6 weeks of introducing direct access to Novo Nordisk GLP-1 products to our platform, we have fulfilled more than 125,000 shipments for Wegovy products. Our customers are excited about the Wegovy pill in particular. We have seen them respond extremely well to the affordable price point, impressive efficacy and strong safety profile. It's clearly a strong combination of efficacy, safety and affordability. Novo has been a terrific partner for us, and I'm excited to explore further ways we might collaborate in the future.

Last month, we also announced that providers on our platform can now send prescriptions for zepbound, vials and [indiscernible] as well as [indiscernible] to the LillyDirect pharmacy and access self-pay pricing for Hims & Hers customers. Our ability to drive awareness and cultural conversations about accessibility as well as our investment in a deeply personal continuous experience gives our partners confidence that the people we are helping them reach are getting access to great care and are more likely to remain engaged over time.

Moving to the second area driving our progress, our growing global scale. We are rapidly becoming the world's largest consumer health platform, which multiplies our impact. We expect our planned acquisition of Eucalyptus to close in the second half of this year. This will extend our leadership position in consumer health across Australia, the U.K., Germany, Japan and Canada by leveraging local expertise and existing industry relationships.

As we strengthen our presence in current and new regions, we have the opportunity to impact hundreds of millions of people, bringing more data points into our ecosystem and extending the network effects of our platform globally.

But bringing customers to the platform is only the first step. We're helping customers build a long-term daily health routine that they're motivated to maintain, turning better access and expanded treatment options into better health and building relationships that we believe can last for decades.

We see ourselves as the best global platform for our industry partners for 2 reasons. First, our global presence allows us to drive category growth in new and existing markets. Second, by providing a high-touch personalized experience, our platform is designed to help customers stick to their treatment plans longer and better achieve their goals than with medication alone.

That leads me to the third area of progress I want to highlight. As we grow, we are becoming more than just a destination for anyone looking to manage existing conditions. We are a trusted, comprehensive health partner that's helping customers proactively discover early signs of conditions that may not be symptomatic yet. The strength of our testosterone offering, which is now serving tens of thousands of men, is the perfect demonstration of this. [indiscernible] signs of low testosterone can be overlooked as just being tired or part of getting older, through Hims that changes.

We've designed the offering to catch an important issue most men can't see before it becomes difficult to ignore. Customers contract the testosterone levels over time through simple at-home blood tests and work with the providers to determine what treatment is right for them and then easily adjust that treatment, if appropriate, based on their latest blood test. We're seeing this kind of proactive relationship and seamless at-home experience drive real results for customers. 95% of Hims customers relying on us for this testosterone support saw an increase in testosterone levels within 2 months.

By prioritizing investments that deepen our customer relationships, we're making it simpler for anyone to be more proactive about feeling their best. We believe our investment in [indiscernible] microneedle blood sampling technology will make deeper health insights across key biomarkers even easier to access with a simple painless blood draw. Instead of waiting for symptoms like cardiovascular risk, sexual dysfunction or hormone imbalance to appear, customers can get a full picture of their current health and manage certain risk factors before they turn into conditions that impact their daily life. That information layer will be key in supporting new specialties like testosterone and menopause as they scale. But more importantly, it allows our platform to evolve with our customers as their needs change.

More and more, we see customers looking for truly proactive and continuous care, informed by health insights that help them not just get healthy, but stay healthy. This is foundational to how the Hims & Hers customer experience improves over time.

This brings me to the fourth area of progress I want to highlight. We are building a health platform that delivers access to higher quality care as we expand, and that is becoming harder to replicate. I'd like to invite ElShenawy, our CTO, to share more on the progress this team has made and the customer experience they're bringing to life.

Given how quickly our technology infrastructure is expanding and the immense impact we expected to have on the future of the business, we are excited to have Mo join us on a quarterly basis.

Thanks, Andrew. I'm thrilled to be back to share how we are leveraging data and AI to make ourselves an irreplaceable companion to our customers and an incredibly valuable partner to other healthy innovators who want to reach and hold on to more customers.

Before I get into the platform, I want to share an update on the team. Our engineering team is lean and immensely talented driven by senior leaders who still build every day. We've also built our AI organization from scratch. We now have nearly 40 members in our AI team, including senior AI engineers and applied scientists, PhDs, from MIT, Berkeley and other top schools and seasoned leaders from top tech companies. Leaders like this are choosing Hims & Hers because they see what we see, a platform with scale, data, infrastructure and customer trust necessarily to leverage today's technological advances to change what people believe is possible in health care.

Today, our teams are squarely focused on 3 key areas. First, we are evolving our existing operating system to better serve our customers and providers across comprehensive end-to-end care rather than a single condition at the time. The next phase of our growth requires a platform that can support greater complexity while also making the customer and provider experience more approachable. Over the past year, we've been rearchitecting the platform around reusable modular capabilities. Our tech stack is built to scale efficiently across new conditions, categories and geographic regions, allowing us to launch new offerings even more quickly.

Our stack now includes a new no-code commercial engine, easily configurable clinical workflows, a modernized mobile and messaging experience and a more complete view of each customer's entire health journey. We are already seeing the benefits launching testosterone, menopause and labs are early proof points of a platform that can support faster expansion across more areas of health care. This self-serve platform that enables flexible pricing, promotions, membership models and multiple treatment plans that can be optimized for supporting customer outcomes is the foundation that lets us serve more customers across more conditions, more efficiently.

Second, with embedded intelligence at every step of the care journey, while keeping independent providers responsible for all clinical decision-making. For example, we currently have an AI copilot live on the provider side of the platform that draft contextual responses on behalf of our care coaches, which are then reviewed by the care coaches before being sent. This isn't just an efficiency play. It's a way to increase the quality of care because it produces responses informed by the full patient context that human coaches alone could not deliver at that scale.

We also recently launched Labs AI, an agent that explains biomarker results in the full unique context of each customer. Flags what matters and knows when to recommend escalation to a provider. And soon, we will launch an AI weight loss companion that will support customers along their journey, proactively reach out at the right moment to help customers hit their desired outcomes and prompt clinician engagement when their expertise is needed.

The common thread across all of these tools is that gates and evaluation frameworks are built into the architecture. Each AI-enabled workflow is designed with clear guardrails on what it can handle automatically and what should be escalated. We currently support tens of millions of customer touch points annually and independent providers' view, correct and approve AI inputs that make up our platform design. This means we are generating clinician verified training signals for our models. This is the highest quality label in AI any company can hope for, and it can't be acquired.

Third, with this infrastructure, we are strengthening the closed loop proprietary data flywheel that competitors cannot recreate. We are one of the only platforms in health care where consumer intake and diagnosis, treatment journey, provider decisions and eventual outcomes, all live in a single stack, and we've designed our platform to get stronger as these insights grow.

Instead of getting a second opinion, our goal is to bring the value of [indiscernible] thousands opinion directly into the Hims & Hers experience, informed by 9 years of learning what works across the full spectrum of customer profiles. Every patient interaction teaches our model more about the range of potential experiences and needs. Every provider decision sharpens our clinical training data. Every [indiscernible] our evidence base, eliminating what works for whom and why.

Eventually, we plan to introduce support for wearables and devices for even deeper insight into our customers every day life. Better data sets the cycle in motion, powering smarter agents, improving care, attracting top providers to our networks and continuously deepening our clinical insight.

We believe our global scale will act as a force multiplier with models reflecting the populations, disease profiles and care patterns of multiple geographies, fundamentally improving the intelligence we are building. We own the core IP that brings this experience for life. Importantly, our advantage is the integration of providers, portables and regulatory infrastructure which creates a unified care model that sets us apart from traditional LLMs or frontier AI labs.

Our advantage comes from powering the end-to-end experience, from intent to outcome across the full patient journey, including symptoms, diagnosis, treatment, titration, side effects and results. We also see the connections across multiple categories. We believe that this model, combined with our global presence is an advantage no other players can currently claim. What we're building is a platform that can continuously expand its categories of care with an intelligent layer that personalizes every step of the customer experience and a trust architecture that earns the right to operate in health care. That's why we believe we are becoming the preferred platform for customers and for partners across the ecosystem. We're not describing far out future, we're shipping it today. Thank you.

Back to you, Andrew.

Thanks, Mo. I'll add that all of the work in this area won't just power deeper insights and stronger relationships in our current categories, we believe it will also underpin our ability to enter emerging categories like peptides with a clinically rigorous information-rich intake process that is designed to meet customer safe and providers well informed. Our medical team sees meaningful potential in several peptide therapies, and we are pleased to see the FDA moving to more clearly define what is safe and allowable here.

The standard bearers in this new category will be the companies that keep the experience physician first, transparent and focused on successful customer outcomes that doesn't exist in today's gray market where the only peptide options are unregulated, inconsistent in quality and rarely include clinical support.

Our approach to this category would be different with a focus on physician insights and oversight, a commitment to advancing clinical learnings about safety and efficacy and access to high-quality treatments. We believe our verticalized infrastructure and domestic supply chain, which we strengthened by investing in our own U.S.-based peptide facility last year means that our customers can trust us to bring the same rigorous approach to peptide therapies that they've seen in other categories. Said more simply, we won't launch access to peptides until we meet these very high standards that we believe everyone should be meeting.

I'll end by saying that I have never been more confident that we are building the future of health. 9 years of data, a verticalized domestic supply chain and agile and intelligent platform, a leading global footprint and a growing network of trusted health innovators gives us distinct advantages and reinforces our confidence in our 2030 targets of at least $6.5 billion in revenue and $1.3 billion in adjusted EBITDA.

We are redefining how the world accesses care, becoming the global destination people trust to feel their best every day. On our platform, customers discover a holistic data-driven experience built for their actual lives, not a generic system. We are changing what people believe is possible, health that is simple, deeply personal and built for everyday life.

I'll now pass it to Yemi to walk through the financials.

Thanks, Andrew. In March, we made a deliberate strategic pivot within our weight loss specialty, one that we knew it to create near-term financial noise to unlock immense potential for the platform to accelerate at scale. Today, I'll walk through the initial impact of that decision, early evidence that gives us conviction that it was the right one, our investment priorities moving forward. And finally, for our financial profile built from here.

We believe the pivot that we made to prioritize branded products within our weight loss specialty will be transformational for the Hims & Hers platform, and early success signals are already emerging. As we've stated in the past, the power of our model centers around pairing the best assortment of offerings with the powerful experience our platform is able to provide. In March, we discontinued advertising of compounding products to prioritize expanding the population we are able to serve.

With the introduction of branded products such as the Wegovy pill and Wegovy pen, we are already seeing our addressable market expand significantly. Within weeks of this launch, we are on track to add north of 100,000 new subscribers per month within our weight loss specialty. Early signs point toward a high level of subscriber engagement with nearly 90% of these users downloading the app and the average subscriber of these products interacting with the provider 3 times in the first month.

Our belief is that weight loss is a critical specialty as a result of its ability to bring a broad audience of consumers to the platform that allows us to cross-sell other products in the future, achieve scale across our pharmacies to accelerate the realization of economies of scale and gather robust insights that enhance data model quality and ultimately allow us to elevate the tools and services we are able to provide to subscribers and providers.

Our aspiration is to become the default health [indiscernible] platform for consumers around the world. Near-term success centers around expanding the addressable market and becoming a leading health and wellness service provider in each of our key markets. while continuing to maintain our ability to drive healthy free cash flow. Longer term, we expect to continue to optimize our cost structure and value delivered to consumers to progressively expand margins. Strong early signals from our pivot, continued robust execution from our team and the increasing size of the opportunity in front of us, reinforce our conviction in our ability to deliver our 2030 ambitions, at least $6.5 billion in revenue and $1.3 billion in adjusted EBITDA.

Our financial focal point will be on accelerating growth to establish a leadership position in the U.S. and international markets, while maintaining discipline to ensure continued healthy free cash flow generation. To reach our longer-term aspirations, we are undergoing what is likely to be a transition period that may create volatility in GAAP results and ratios as reflected in our first quarter results.

In the first quarter, revenue grew 4% year-over-year to $608 million, subscribers grew 9% year-over-year to nearly $2.6 million and adjusted EBITDA was $44 million, representing a 7% adjusted EBITDA margin. Revenue and adjusted EBITDA within the U.S. operations was temporarily pressured by revenue recognition dynamics from shorter shipping cadences, further compounded by a tougher comparable period resulting from record level additions of weight loss subscribers in the first quarter of last year.

International growth driven by our acquisitions of ZAVA and Livewell remained strong as revenue increased nearly tenfold from the first quarter to $78 million. The strategic pivot in our weight loss specialty impacted our financials in the first quarter. Prior to our strategic pivot, we made meaningful investment in product, technology and other capabilities to support our GLP-1 compounding supply chain. As a result of our pivot, we incurred approximately $33 million of restructuring costs, primarily consisting of the write-downs related to our compounded GLP-1 supply chain that now face risk of obsolescence.

Approximately $28 million of onetime charges negatively impacted gross margins by roughly 5 points in the first quarter, which were 65% on a GAAP basis and 70% when adjusted for these costs. The remaining $5 million of onetime restructuring charges impacted operations and support costs. In the first quarter, we continued investing in talent and capabilities across several areas, inclusive of technology and operations. We expect to continue investing in technology in the near term as the benefits cascade across multiple areas of the platform. More robust infrastructure accelerates the pace at which we are able to bring new features and offerings to our consumers.

Additionally, specialized technology and engineering talent positions us to unlock even more value for our subscribers as we better leverage insights from throughout the consumer journey, what their symptoms were, what treatments worked versus did not and what behavioral patterns facilitated greater success across different demographics. These insights have the ability to drive increased tenure on the platform.

Lastly, [indiscernible], in particular, has the potential to reduce both organizational and operational costs in a way that not only does not sacrifice service quality for subscribers, but enhances it. We expect technology investments to be financially accretive in the mid- to long term with continued signs of success appearing in the near term. Additionally, we expect continued near-term investment in our operational capabilities that enable us to expand into new specialties as well as bring our costs to serve our subscribers down over time.

In the first quarter, we continued investing in talent to ensure that the organization is equipped to expand into more complex offerings such as injectable based low testosterone treatments. In addition, we invested in talent to ensure that we are well positioned to take advantage of opportunities for new offerings such as peptides as the regulatory landscape evolves.

Trust remains the cornerstone of the Hims & Hers brand today and will continue to be as we scale. As in the past, new specialty expansion will follow a thoughtful compliance consumer-centric framework that ensures the quality and safety standards of the offering align with what consumers have come to expect from Hims & Hers.

Gains in marketing efficiency have unlocked our ability to thoughtfully deploy capital to these areas. Marketing as a percentage of revenue improved 3 points year-over-year and quarter-over-quarter to 36% in Q1. Efficiency gains have come from stronger retention, increased cross-sell [indiscernible] on the platform organically and acquisition from lower-cost channels as our brand continues to gain more recognition. As we continue expanding the assortment of offerings across the platform, our belief is that these efficiency gains can continue also with some quarter-to-quarter volatility.

Before going into our investment strategy, I'll take a moment to reinforce our operational priorities. Our primary financial objective will center around continuing to grow the business while ensuring that we are generating strong free cash flow to be able to move quickly on market opportunities as they emerge. From time to time, this may result in heavier investment or even periodic strategic pivots that impact our GAAP financials as we saw in the first quarter.

GAAP net income declined to a loss of $92 million in Q1. Q1 results were impacted by nonrecurring restructuring costs related to the strategic pivot in our weight loss specialty, transaction costs related to M&A activity and legal costs. While we expect to be positioned to return to net income profitability in 2027, our primary focus will be on driving strong growth and cash flow generation.

In the first quarter, we generated $89 million of cash flow from operations and $53 million of free cash flow. We found thoughtful ways to deploy capital to capabilities that we have high confidence will drive long-term growth. For example, in Q1, we completed the acquisition of YourBio, a provider of technology that allows consumers to collect blood painlessly from the comfort of their own home. This will be a critical component of our long-term strategy to bring tens of millions of subscribers onto the platform as a [indiscernible] that prevents consumers from obtaining deeper health insights to unlocking a new level of preventative care. As of the end of the first quarter, available cash and short-term investments on our balance sheet were $751 million.

As we mentioned in the past, our primary focus will center on investments that allow our platform to scale for serving tens of millions of subscribers. We also have $225 million remaining on our share repurchase program, which allows us to take advantage of moments and we believe the intrinsic value of our stock meaningfully disconnects from the market value. Our investments in the coming quarters will orient around the strategic growth levers we outlined at the start of this year that are the cornerstones of our 2030 financial ambitions. Expanding into new specialties, utilizing technology to elevate the quality of care, providing the access to personalized care across specialties, leveraging partnerships to become a best-in-class creative health services and expanding internationally.

I'll highlight a few of these will expect heavier near-term investment. First, we will continue investing in our facilities to expand both capabilities and operating efficiency. The [indiscernible] foundation to effectively expanded new specialties while also evolving the assortment of our current specialties. Our scale provides us with the ability to continue verticalizing our existing specialties in a way that provides a level of efficiency that [indiscernible] the industry can match. We expect to invest in both talent and equipment that set a foundation to verticalize current specialties as well as those that we may launch in the future. This allows us to not only reduce our cost structure, but also ensures we can fully scale our offerings in a way that meets the high bar that we set for safety and quality.

Second, we believe that we can elevate the quality of care by removing friction through technology, both digital and physical. Our conviction is high that we can increase subscriber engagement and retention through services like at-home blood collection, AI-supported shop bots like the ones we recently began to play in labs and eventually expanding data from wearable devices that can further reinforce the feedback loop between subscribers and providers.

Finally, international expansion is the area where we expect to make the heaviest investment in the coming quarters. Eucalyptus, which we expect to close in the second half of this year, will meaningfully expand our ability to evolve the consumer experience across several additional markets. Efficiency within mature markets can allow us to invest in strategic markets that can emerge as future profit centers once they scale.

At the time of closing of eucalyptus, we expect to make a payment of approximately $240 million, with the remaining guaranteed consideration and earn-out payments extending through early 2029. Importantly, the flexible structure of the transaction gives us the ability to satisfy a meaningful portion of obligations after closing in either cash or stock, which we believe supports long-term balance sheet flexibility. As we have in the past, we will continue to monitor the landscape for opportunities to reinforce our balance sheet and preserve strategic optionality in a way that remains thoughtful around dilution.

With that, I will walk through our outlook for the remainder of the year. The exact timing of the closing of the Eucalyptus transaction remains unknown, so we have not included it in our updated outlook. In the second quarter, we are anticipating revenue in the range of $680 million to $700 million, representing a year-over-year increase of 25% to 28%. We expect adjusted EBITDA to be between $35 million to $55 million, representing an adjusted EBITDA margin of 7% at the midpoint of both ranges.

For the full year, we are raising our 2026 revenue outlook to $2.8 billion to $3 billion, representing a year-over-year increase of 19% to 28%. It is our expectation that 2026 adjusted EBITDA will be between $275 million and $350 million. These adjusted EBITDA and revenue ranges imply an adjusted EBITDA margin of 11% at the midpoint of both ranges.

To help contextualize our outlook, I will highlight a few points. First, as previously mentioned, our focus will center on maintaining strong growth. We expect gross margins to compress as we prioritize scaling areas such as weight loss, labs and international markets, which have a lower gross margin profile than our longer-tenured specialties. These specialties sets a foundation for us to build a deeper relationship with our subscribers as well as become the leading global platform for health and wellness services.

Second, our success has historically centered around verticalizing operations to bring our subscribers an exceptional level of service. Our belief is that this drives greater tenure on the platform. Our agreement with Novo Nordisk still allows us to leverage our provider network, digital tools and breadth of other offerings on the platform to better serve subscribers from beginning to end. This includes leveraging our pharmacies to fulfill medication for our subscribers for products like the Wegovy pill and Wegovy pen, which may unlock efficiencies over time.

We recognize revenue associated with the products fulfilled by our pharmacies, inclusive of those from Novo Nordics on a gross basis. Near-term margin headwinds are expected in the second quarter as the majority of our weight loss specialty moves toward 1-month shipments.

Third, we expect a meaningful step-up in adjusted EBITDA dollars in the third and fourth quarters. The compounding effect of monthly cohorts acquired throughout the year is expected to result in accelerating revenue and EBITDA growth. Additionally, we expect to gain operating leverage in G&A as well as drive continued marketing efficiency gains.

Lastly, we expect to continue making investments in technology on our platform. We believe we can elevate the overall experience for consumers on our platform, whether in the form of new apps and tooling, faster care or deeper insights. We also believe that a more robust infrastructure enables us to move faster and the technology has the ability to meaningfully reduce the cost to serve consumers. Whether that be through upgrading software to enable more efficient pharmacy operations or identifying ways to leverage AI to reduce operational and G&A costs across the company. Our expectation is that some of these efficiency benefits could start to emerge in 2027.

We've made a deliberate strategic shift in the first quarter. We believe this shift in conjunction with the strength of our other specialties and platform capabilities positions us to become the default health and wellness provider in the U.S. Our confidence is high that we can replicate the success and similarly established category leadership in key international markets such as Canada, the U.K., Australia and other European countries. The early signs are promising, giving us greater conviction in the long-term trajectory of the business.

Our trajectory provides us with confidence to keep investing and delivering on our mission. The opportunity in front of us is immense. We expect some volatility in GAAP financial margins as we continue to lean into the opportunity to drive more value to consumers. But we do not expect to change is the excellence in execution and rigorous adherence to our capital allocation framework, which we feel will allow us to generate strong free cash flow while establishing category leadership positions around the world.

This supports our continued confidence in the 2030 ambitions we outlined last year, at least $6.5 billion in revenue and $1.3 billion in adjusted EBITDA. Our success would not be possible without the significant efforts of Hims & Hers employees around the world. I'd like to thank them, our subscribers and our shareholders for supporting us and our mission to help the world [indiscernible] through the power of better health.

With that, I will now turn the call back over to Bill to kick off Q&A with 2 questions from our retail community.

Thanks, Yemi, and thank you to everyone who asked questions over the weekend. Our first question comes from [indiscernible] who asked about our vision for AI on the platform. What is the long-term vision for the recently launched Labs AI health care agent, specifically where is ultimate goal or final form that Hims & Hers aims to achieve with this product?

Yes. Thank you for the question. We're really excited to start speaking about some of these AI initiatives in more detail. And I have asked Mo actually on a quarterly basis to be joining us going forward, which I think will be great. The lab companion and the upcoming weight loss companion are really the first iterations in what I would expect eventually becomes multiple agents that are supporting each stage of the customers' journey across every specialty we serve. So eventually, you have agents that make the intake process more dynamic and conversational. You have agents that are helping with clinical decisions and recommendations, becoming better informed with tools like MedMatch, they get smarter as we scale, making really the network effects of the global consumer platform we have more broad and more refined.

And then I think you have ongoing care and support that's always available, helping you manage multiple aspects of your health on a daily basis. This is much more ongoing engagement adherence and clinical needs after treatment.

Mo made this point early in the prepared remarks, which is that we're seeing really fantastic tech leadership join Hims & Hers because I think they see what we see. We see a platform with massive scale, with unique data, with infrastructure and ultimately, customer trust that's necessary to really take advantage and leverage this breakthrough in technology. I think these recent launches are really just the first step, frankly, in leveraging the stack.

But ultimately, I think we plan to integrate it throughout the entire experience to essentially make it such that no matter where you are in the world, you can pick up your phone, click and get access to Hims & Hers and ultimately feel great and have the best care possible in your hands.

Great. Thanks, Andrew. More than half of the questions that we received over the weekend were on the developing opportunity in peptides. This is a combination of questions from the [indiscernible] community as well as [indiscernible] who asked, how do you view the company's long-term peptide strategy beyond GLP-1s, specifically around the potential differentiation that can come with personalized dosing, new categories or proprietary formulas? And along those lines, can you speak to the competitive advantage that your domestic supply chain gives you in this area?

Yes. As we noted in the prepared remarks, I think this is a category that we are extremely excited about, particularly when you pair the potential of this category with first-class physician oversight and ultimately, a safe supply chain, which really does not exist in a great market, either of those things today. I think when we step back, we believe that we've got a combination of things, the brand, the infrastructure and ultimately, the capabilities to really be a leader in this emerging category as the regulatory path becomes more clear in July.

I think to start, our 503A compounding footprint gives us personalization at scale. With more than, at this point, 1 million square feet of infrastructure, we can support individualized dosing and formulations. We can improve cost efficiencies and margins and ultimately deliver care that's meaningfully tailored to each patient's needs.

Second, as we mentioned in the prepared remarks, our peptide manufacturing facility, which we acquired last year, gives us a fully verticalized U.S. supply chain. And I think by bringing the API manufacturing in domestic we can control far more of the process end to end, giving us advantages in quality and purity and reliability and ultimately, in brand trust that I think will be incredibly difficult for others to match and I think increasingly important as these treatments and therapeutics become more mass market.

We have been actively investing in our internal as well as external team of clinical experts that are kind of at the forefront of this category. So I think that clinical oversight and the clinical protocols that will build in ultimately we'll be able to help educate patients and give them guidance with regard to what might be appropriate in what circumstance.

And then I think when you add on top of that, the lab testing work that we've been doing and the verbalization of that facility -- those facilities in order to identify areas of concern and ultimately track improvement, I think the combination of all of that is incredibly exciting.

I think given the investments we've made across the business in the last few years, I'm not really sure there's anyone better positioned to both check the box on all of these elements that we feel are absolutely critical to delivering this category safely and appropriately but also really leading in the category and empowering consumers with that access.

Great. Thanks, Andrew. With that, I will pass it back to the operator, and we can begin the regular way analyst Q&A.

[Operator Instructions] Your first question comes from the line of [ Cory Carpenter ] with JPMorgan.

Andrew, I was going to ask you about peptides but I think you covered that thoroughly in the last question. So maybe I'll ask 2 more finance questions on the strategic shift. So Yemi, I think you mentioned that there was some margin headwind as you shift to shorter shipping cadences with the branded products. Maybe zooming out a bit, could you just talk about what's like the contribution dollar profile for a branded customer versus a legacy compounded customer? That's question one.

And then question two, just for the change in your full year revenue and EBITDA guide, is there any way to isolate how much of that is due to the weight loss strategic pivot versus the rest of the business?

Great. Thanks for the question, Cory. So I think with respect to your question around the difference in economics between branded and the compounded products, I think on a dollar basis, the 2 are roughly comparable. And so I think as part of the strategic pivot, one of the things that we've always have held constant that we feel is necessary for successful platform is really bringing a broad set of assortment that's available for consumers. We feel that, that enables us to really go after a larger and larger audience. .

We saw, as we expanded assortment on the platform is that really the number of consumers and the demand and the traffic coming to our platform levels post the launch that we really hadn't seen in some of the peak periods that we saw in 2025. This does a couple of things for us. The first is, like, clearly, that will be a pretty significant beneficiary for our weight loss specialty, but also as we increasingly broaden the number of specialties that we offer on the platform, we're able to draw interest into some of those other specialties, either as the consumer is coming in or over time, as we look at the relationship that we're building with consumers and the value that we're bringing to our subscriber base as well, potentially cross-sell them over time.

And so I think the conviction in the demand that we're seeing from the site, continued strength across our other specialties in the U.S. is what gave the conviction to you to elevate the guide.

Your next question comes from the line of Maria Ripps with Canaccord Genuity.

Can you give us a sense of what portion of your compound GLP-1 subscribers sort of have transitioned to branded products since the Nova deal sort of went live and what retention looks like through this transition? And then secondly, Andrew, just wanted to follow up on peptides. How far along are you in terms of sort of -- in terms of your readiness to go to market if the FDA sort of recommends the reclassification in July? Are there any other investments that are still needed? And I guess, how are you sort of sizing the opportunity here internally relative to other specialties?

Thanks, Maria. Maybe I'll start on the peptide side. I think I've said this in the past, and I think it's worth repeating, I've never believed strategically it was critical for us to be first to market in any category. And I think that's going to be especially true when it comes to the peptide category. I think what's most critical is when we come to market we are best in market. So not necessarily first but best. And I think there was quite a long list from our perspective of what is necessary to deliver that category safely, including obviously, data transparency, really validated supply chains internally and clinical protocols that are bulletproof.

And so the team is actively working on all of those elements. We expect in end of July to get more of an understanding at least on some of the peptides that possibly could be moving to category one and then possibly more information kind of at the end of the year. But I think how I articulated the team is actively preparing for all of the elements that we think would be critical to bring that category to market. We likely will not be first to market. But when we do, we'll make sure that we feel like we've got everything done the right way.

From a scale and opportunity standpoint, it's hard to size up, although I will say the demand, both on the men's and women's side instinctively seems to be extremely large, right? I think there's a growing emergence that the GLP-1 category probably started and provoked, which -- is it about patients looking to be more proactive with health, looking to not only solve specific issues that might be acute, but also possibly get ahead and more proactive in health in a much more preventative and longevity focused manner.

I think this is appearing in a lot of ways. One in the peptide side of the house, but also in categories such as lab testing, which we have launched and are seeing great progress. Same thing with testosterone and menopause. These are much more forward-leading categories, people starting to take their house, in their own hands and getting empowered. And I think that's going to be a really strong tailwind that has emerging therapies, such as peptides or other longevity type therapies come to market.

On the question related to GLP versus branded, when we moved -- switched strategically over to the branded side, almost all of the new business is now coming in on the branded side, and many, many have transitioned over. That's how, frankly, we're delivering north of 100,000 plus new on the volume side for Wegovy. We think this was an incredibly valuable transition. We see it in the scale of new customers coming in the door today, which is larger than as Yemi said, any spikes we saw even during the most important seasonal campaigns such as New Year's and Super Bowl campaigns, really excited by that transition and are actively in conversations with Novo, I think they share the excitement as well with what they're seeing.

Your next question comes from the line of Mark Mahaney with Evercore.

All right. I just want to ask 2 financial questions. Just, Yemi, you talked about the gross margin pressures, more puts, I think, than takes or takes and puts, but can you help quantify just how much further down we could see gross margins as you go through the cycle between now and the end of the year? And then just in the -- what's implied in terms of EBITDA margins in the back half of the year, implies there is pretty high incremental margins. So just go through that a little bit. What's the confidence that you can ramp up incremental margins like that in the back half of the year?

Yes, sure. Thanks for the question, Mark. So to start with the first point, just around gross margin volatility, I think it's part of the strategic pivot. We do expect to see just general volatility in some of the GAAP measures. That said, I think that the overall conviction in the ability to deliver strong [indiscernible] EBIT dollars and strong free cash flow dollars remains very high. I think we would expect to see, probably over the coming quarters, a couple of points of degradation on gross margins. That said, I think similar to prior periods, where when we focused on developing a leadership position to ultimately take those benefits and leverage them to drive economies of still.

I think this is a similar playbook to like what we've done in the past, like where the focus right now for the company is become the default health and wellness provider in the U.S. and establish a leadership position. Ultimately, in the future, position ourselves to realize great and greater economies of scale where we're able to pass value back to consumers in a way that no one else can. And then as we are able to drive continued strong cash flow out of our domestic operation, being able to reinvest that to follow the same playbook globally really is kind of the engine and how we expect it to run in the future.

[indiscernible] the second question, maybe you mentioned around the EBITDA in the back half of the year, I think there's a few mechanics at play. The first being one of the large things that we effectively see is the weight loss transition that we spoke around to last quarter. In Q2, that will also continue. The vast majority of consumers coming on to the platform today are actually on 1-month cadences previously for the compounded business done with 2-month cadence.

There's just technical mechanics that you start to stack more cohorts each month now as opposed to each quarter throughout the year, you inherently get a benefit on EBITDA as those consumers return. Additionally, what we do expect is we made pretty extensive G&A investment in the front half of the year. As we progress through the year, g&A will experience leverage because we will not need to grow the G&A expenses on a quarter-to-quarter basis the same degree.

And lastly, I think we're seeing this, just the marketing efficiency that we're able to drive on a quarter-to-quarter basis, we would expect that to continue as we continue to see an ability to strongly cross-sell users continue to see more throughput through low acquisition channels and lastly, continue to see stronger retention patterns. Those are the elements that give us very high conviction in the ability to continue to compound EBITDA dollars in the back half of the year.

Your next question comes from the line of Craig Hettenbach with Morgan Stanley.

A question on the dynamic of kind of revenue guidance coming up, but EBITDA lowered. You touched on some of this, but also interested in some of the new category launches, be it testosterone, menopause and labs, how you think about that, just the ramp period and then when those get to a little bit more mature margins? That's number one.

And then the second point on gross margins to compress relative to how you thought about it 75% longer term, any kind of range you're thinking about it on a longer-term basis in terms of where the model is moving?

Yes. Thanks for the question, Craig. So I think in terms of taking revenue up, I think it largely mirrors the financial priorities that we spoke around a bit in the prepared remarks. So I think we've seen an immense opportunity in front of us. And so both in the U.S. as well as globally, we're going to continue to invest to effectively establish a leadership position because we've observed in the past when we're able to do that, we're able to pass value back to consumers from both leveraging the technology that Mo went through in terms of the richer data sets but we're also able to set up an industry-leading cost structure that enables us to extend margins or pass value back to consumers.

And so in the guide, the reflection of taking revenue up leaving ourselves more flexibly on EBITDA to do that really is a reflection of that priority and the confidence that we have the ability to capture the opportunity in front of us.

With respect to the gross margin dynamics, I think that that's something that we'll continue to provide visibility into but I think the overall financial equation for the company has not changed, and that's really to drive strong absolute EBITDA dollars and control our own destiny with cash flow generation while establishing the leadership position that we spoke around.

Your next question comes from the line of Justin Patterson with KeyBanc.

Could you expand on how AI could change the user experience over time and how you're thinking about incorporating feedback loops? It does seem like there's a unique opportunity there to deepen insight into the customer and gain some more outcomes data on treatments. And then secondly, I'd love to hear more about your approach to wearables and how you're thinking about building versus partnering with some of the existing players out there?

Yes, great questions. On the AI side, I think there's a few things. As I was mentioning, I think you can see we're essentially building a multi-agent model where both consumers and providers are empowered at each step of the customer journey to optimize, personalize and ultimately drive better outcomes for the patient. So part of this is efficiency. But I think a bigger part of this is actually just quality of care network effect. I think there's a very powerful dynamic with Hims & Hers Health, which is with every patient that comes to us, we can get smarter and more capable of treating the next behind you.

There's this concept in health care of a second opinion. And I tell my team all the time, the models we're building right now and the data layer we're building across the stack should enable it such that any patient anywhere in the world can get 1,000 opinions at the same time, right, through the holistic data of all of our 9 going on 10 years of experience. And so I think you should be able to experience faster responses, more personalized dosing and recommendations on care, handheld engagement experiences post original consultation, where you're actually getting nurtured and walks through all the major milestones as you were adhering to care. And ultimately, I think the outcome of this is just going to be much higher long-term retention, much better engagement rates and likely much deeper relationships with these patients.

On the wearables side, I think this is very much tied in, right, another data source similar to labs that allow us to do the high-touch care model much better. I think we are evaluating both paths, both our own devices that can be easily worn, easily charged and can track all of the basics that all of us love to track as well as partnering with the ecosystem that people love. My general philosophy on this is both is probably right. We want to be universal such that if you have very specific devices you love, they are going to integrate seamlessly with the Hims & Hers experience. We will be able to leverage that data, you provider will be able to leverage that data and we'll be able to ultimately better care for you because of that relationship.

And then on top of that, I think there's a really powerful dynamic that our team is, I think, uniquely capable of, which is actually designing and bringing to life world-class hardware experiences. We're doing this with YourBio, our at home blood testing device. I think we have the ability to do this on the device side as well where for our consumers, you can deliver this at cost extremely affordably, built into different memberships and membership tiers, such that your engagement and depth with the platform can just be much more rich and much more powerful.

Your next question comes from the line of Eric Percher with Nephron Research.

Andrew, I'd like to ask you to walk us through the brand manufacturer value proposition that you're expanding when you're out in the marketplace and the extent to which you think that will resonate beyond GLP-1s? And then, Yemi, I just wanted to double click on the comment you made relative to the second half run rate. Do you view that as a reasonable annualization rate or is your comment on investment intended to temper us from annualizing that?

Yes. Thanks, Eric. Great question. I think the relationship on the branded side of the house is a really quickly evolving dynamic. But we've had enough data points, whether it's through Novo or through companies like Grail or others, which is clear that the innovative categories of pharma, biotech, devices, advanced diagnostic testing, all of that innovation ultimately needs distribution. And I think our ability to have the largest geographic footprint and the deepest relationships with consumers as ultimately the major front door, I think is an incredibly powerful component that we can bring to these partners.

So I think it's about both building awareness for their category, it's scaling growth for specific treatment therapies and I think as more and more come to market, whether it's in any of these categories, there's going to be an immense amount of value put towards our working relationship with these ecosystem partners to figure out how we can deliver the best things to the right people.

Ultimately, for us, I think, trust with consumers as a curator of high-quality everyday care is our ultimate goal. And with that, it requires great relationships with those that are innovating across the stack. I think our relationship with Novo here domestically as well as our future relationship that we have with Eucalyptus and the drug companies globally, there's a lot of learnings there with regard to how innovators can work together to bring great products to people at scale.

And I think it's accelerating a lot of conversations that are happening right now. There's probably 2 dozen of these conversations taking place, both domestically and globally across pharma, biotech, new device and diagnostic because all of these innovators need distribution and need a partner that can ensure the right customers are getting access to the right care and ultimately are getting the right outcomes. And I think we can really be a key partner in helping deliver that.

Yes. And then to hit the second part of your question, Eric, I would say that the -- given the pivot and weight and then some of the success that we're seeing across some of the newer specialties, like lab, testosterone, really, the focus is on scaling each of our categories in the U.S. very quickly to establish leadership position. We've seen in the past that with scale, we have the ability to drive higher and higher margins over time. But with record-level users coming to the platform, the focus really is on continuing to expand share, expand our reach and expand the overall subscriber base. And so with that, I think we would expect to see accelerating growth via revenue over the back half of the year.

What we do expect on a quarter-to-quarter basis is that investment may vary as we start to lean into certain opportunities that [indiscernible] of progress. But the overall equation that we focused on really has not changed and will not change quarter-to-quarter, and that is established leadership position, position ourselves to drive economies of scale while we're doing that to ensure that we're doing so in a way that still enables us to drive healthy free cash flow.

Your next question comes from the line of Ryan MacDonald with Needham.

I appreciate all the color on the call here with the strategic pivot. But Andrew, I'm curious, of the categories you've talked about a lot here, weight-loss, labs, testosterone, menopause, are these primarily sort of U.S.-based domestic-based drivers of the business today? Or are you seeing sort of incremental or similar opportunities within the early stages of your expansion internationally and what you're seeing through sort of Livewell and ZAVA thus far? How much of that sort of these investments are through U.S. versus international?

Yes. Great question, Ryan. Right now, the newer categories, labs, menopause, testosterone, et cetera, a lot of that iteration and category learning is taking place domestically. And I think this playbook has worked traditionally very well in the past. We've been doing this now for a few years in the U.K., where we'll optimize, refine and bring to market here in the U.S. and then quickly after maybe 6 to 9 months, brought in that to other geographic regions.

On the weight loss side, it's a little bit of a mixed bag because you actually have just different weight loss models. The international categories or the international geos that we have, have actually been operating with the branded pharmaceuticals, branded manufacturers for much longer and have far more tenured relationships with them. So in many ways, they're already seeing that model adoption. But the new categories like labs, menopause, testosterone, same things with peptides, et cetera, those will start here domestically and then quickly follow into the [indiscernible] other most critical regions.

Awesome. And then just quickly a follow-up for Yemi then is it safe to say sort of based off of that, that as we think about the increase in the guide on the top line for the remainder of the year that that's predominantly U.S.-based assumptions, not much for international?

Yes. I mean I think we expect strong growth in the international components. Like that said, I think what we did expect to see in the U.S. as a result of -- as we clear some of the revenue recognition dynamics we spoke around but also see early signals from the strategic pivot and the -- going up in new categories that there will be a meaningful acceleration in the U.S. business, which we feel is important to continue to remain aggressive with global expansion.

That concludes our question-and-answer session. Ladies and gentlemen, this concludes the Hims & Hers First Quarter 2026 Earnings Call. Thank you all for joining. You may now disconnect.

All right. Good afternoon, everyone. I'm Craig Hettenbach. I cover the health care technology and provider space at Morgan Stanley. So very pleased to have Oluyemi Okupe, CFO of Hims & Hers. Just before we kick off, for research disclosures, you can find them at www.morganstanley.com/researchdisclosures.

So with that, Yemi, again, thanks for being here. I thought we could start maybe just kind of high-level strategy in terms of the last couple of years, how the platform has evolved and importantly, what your vision is for the next few years going forward?

Yes. No, perfect. It's a really great question, Craig. So I think initially, Hims & Hers started around really with a focus towards making treatment for stigmatized conditions accessible and elevating the awareness for consumers across those conditions. I think as you look at how the platform has evolved over recent years, we started to add many different capabilities that remain a key focus of the organization going forward. And so a few years ago, we made the introduction into personalized treatments really with an eye towards thinking through what are the different elements that prevent consumers beyond just awareness and access from getting treated, whether that's form factors or needing to balance side effect profiles with efficacy concerns or even just making regimens more simple through treating multiple conditions, whether it's relationship with our subscribers on our platform. We really leaned into that, invested hundreds of millions of dollars in CapEx to bring forth those facilities.

And I think over time, what we saw is more and more success through retaining our core competency of elevating access awareness, but the need and the consumer feedback around personalized treatments was relatively resounding where the majority of consumers on our platform today now receive the benefit from personalized treatments. With more than 2.5 million subscribers on the journey, I think that we have the benefit, I think we're one of the few platforms that do have the benefit of really seeing the consumer life cycle from intent all the way through outcome. So what are the things that users are coming to us to treat? What are the treatments and dynamics that worked? What are the ones that potentially consumers did not have success with? And ultimately, what is the follow-on care that result in greater and greater success for consumers.

And so as we think around the next phase of the company, I think the way that we've thought around building the capabilities for Hims & Hers in the past has really been through enabling a compounding effect of the benefits and capabilities of the platform. So we started with awareness and access, combine that with personalized treatments. Now what you're seeing with the scale of what we have is leveraging data and insights through the existing user journeys that we have today, but you're also seeing that morph into new data vectors in the form of live diagnostics and some of the other exciting things that we spoke around last year on this year's earnings call.

And so I think what you're likely to see from us going forward is a strategy that still continues to leverage the historical competencies of the organization but leans more aggressively into the data. And so we speak around quite a bit around what are the key growth levers across the company that we believe will drive the business. That is deepening personalized treatments, continue to leverage technology to remove friction points at various stages through the consumer journey, leveraging partnerships across the ecosystem with like-minded players to deliver the things that we may not be able to deliver and then lean into international expansion as well with many of the things that we announced over the last several weeks.

Great. I definitely want to spend some time on the international strategy. But maybe just starting for kind of this year, you had earnings last week, you established guidance for this year. As you think through this year and the strategy moving forward, like what are some of the most important things you want to make sure you're executing on in 2026?

Yes. I think it's -- I think we made a ton of great progress across the levers that we spoke around in 2025. And so just kind of looking at the broadening of personalized treatments on the platform, that was something that we were very excited to do in 2025 with more multi-condition offerings across many of our more tenured specialties. I think as we looked at the investment that we made in the technology platform, one of the things that afforded us to do was the ability to move faster and more efficiently. And so if you look at the company's life cycle, historically, we launched 1, at most sometimes 2 specialties per year at the most. At the end of last year, we went into 3 very complicated specialties in the span of 6 months.

And so I think that, that is a testament to the investment in the engineering and technology teams that we put forth in the front half of last year that enabled us to move faster. I think our ability to continue to cultivate those new specialties, low testosterone, menopausal support for women and diagnostics will be critical in setting the foundation for growth in 2026, but also the future growth vectors beyond 2026. And so I think that will remain an area that we lean into or continuing to cultivate and drive those new specialties.

Additionally, what you're likely to see us do is continue to also really lean into the effect of pairing data capabilities with personalization. So we were excited to announce the YourBio acquisition last year that in the future will enable us to roll out a painless at-home diagnostic device. The ability to also pair that with some of the best minds in AI to really just elevate the consumer experience as well as the diagnostic capabilities on our platform is something that we're very excited by. I mean clearly a very meaningful investment in international expansion. I think that the aspiration for Hims & Hers has always been to help the world feel great through the power of better health, our mission statement. And so I think that in 2025, we embarked on that journey with the expansion into Canada, deepening our presence into the U.K. In the back half of this year, we're very excited to further reinforce that through welcoming the Eucalyptus acquisition to the Hims & Hers family.

Great. Just going back for a minute in terms of you laid out kind of how the platform has evolved. Just from an awareness perspective and maybe touch on just kind of Super Bowl ad, just -- how is that resonating? And anything you can kind of offer in terms of whether it's traffic to your site or kind of feedback loop around that?

Yes. I think that in the near term, what we've already kind of observed a lot of success with, it's just like the marketing efficiency. So a couple of years ago, we invested very aggressively in the brand. And I think that we're uniquely positioned for that in the respect that we have a broad set of capabilities and specialties that are still relatively focused in nature. And so roughly in the kind of back half of 2022 and definitely in 2023, we started to lean more on broader brand education. And you're seeing that show up in the form of an immense step-up of marketing efficiency in 2025, where we elevated marketing as a percentage of revenue, improved that close to 7 points year-over-year.

And so I think that, that is an indication that, that is working for us. And so with the Super Bowl ad and some of the other things that we've put forth this year, our expectation is that we'll continue to invest in the brand. There's more capabilities. There's also the shift to help consumers more proactively improve and manage their health that we want to spend a lot of time educating consumers around and making that transition. So I think that our view is that the investment in the brand will carry long-term efficiency gains for us as an organization. And so when we think around like what is the North Star for Hims & Hers, call it, 3 to 5 years from now, I think it's to become the default brand for health and wellness. And so if you mentioned refreshment drinks or car insurance, each of those phrases triggers 2, maybe 3 brands that come to mind as a default brands that cater to those audiences. I think that we have the breadth and depth of treatments that position us to be the default brand for health and wellness services.

Great. I did want to touch on just the compounded pill and kind of the news flow around that in the last couple of weeks. And importantly, when you think about all the strategies and things that you're kind of gearing up to, how is the company kind of dealing with that in terms of litigation risk, FDA and DOJ? Any perspective there you could share with us?

Yes, sure. I think we're always thoughtful as we launch anything new on the platform, both from a regulatory perspective, but also from a consumer trust perspective. I think the strength of the brand is the ability to continuously adapt as well. And some of that is what you saw around some of the decisions that we made around the oral pill offering that we did launch. I think that our interest is always to put the consumers first, and we talk to a lot of experts internally and externally. And I think with that and continuing to follow the same frameworks that we have, I think we're confident in continuing to build a robust offering, not only in 2026, but also for the foreseeable future as well.

Got it. I'd like to come back to just some of the new growth initiatives, and you mentioned kind of low testosterone, HRT, menopause, like take us through kind of as you look and evaluate new categories, what's the most important kind of criteria for you to not just kind of target that, but then to kind of execute on some of these categories?

Yes. I think there's a few components before entering any new specialty that we look at. The first is around the category being recurring in nature. I think the focus of the platform thus far has been going after conditions that are recurring in chronic. So like what you don't see today on the platform are things that go after addressing acute needs. So that's usually one filter that we apply. The second is there needs to be a large enough addressable audience that really truly cares about these things for it to make it worthwhile to invest the resources to bring an offering to market. The last thing is that we look for things on the market today that fundamentally, people are going to increasingly care about, things that are emotionally resonant in nature.

And so I think the pairing of those 3 things, large market, recurring in nature and emotionally resonant are things that historically have been what's drawn us to bring an offering or a given specialty to market. I think that what becomes exciting is as you also look around the capabilities that we've expanded upon with the personalized treatments, but also with the launch of the lab offering, you're able to detect things that are still emotionally resonant but the people may be not able to see.

So traditionally, things like hair loss, weight loss, sexual health, those are things that you immediately know you have a challenge that you're faced with. For elements that may not be as obvious like low testosterone or hormonal therapy, those are things that you may not know exactly. You may fill some of the symptoms, but you don't necessarily know, hey, I need to go for XYZ treatment. The ability to make diagnostics more accessible to a broader portion of the population positions us to help users identify where they may be faced with those treatments that are less obvious, but ultimately have a ecosystem that serves those in an easier and friendlier way than what currently exists out there today.

Got it. And then how do you think about just the size of these potential markets longer term and think about as you kind of scale into it? I know they're kind of just getting off the ground this year. What does that look like in the next couple of years?

Yes, it's a great question. I think our view is in relatively short order. Each of these specialties has $1 billion -- has the ability to hit a $100 million plus run rate in the near future. I think from there, just like given the amount of individuals that are suffering in the U.S. alone, even setting aside now the global dynamics, these are markets that have tens of millions of users that are encountering challenges and can benefit from treatment. So our view is each of these have the ability to be quite large in nature. I think that as we continue to remove barriers and friction points in the ecosystem that prevent users from getting treatment today, the opportunity is immense. And so that's one of the things that gives us just the high degree of confidence in the ability to hit very ambitious 2030 targets, the $6.5 billion or more of revenue and the $1.3 billion of EBITDA.

Got it. And you mentioned before, really good strides on marketing efficiency. How do these new categories play into that when you think about kind of CAC and LTV? Is it a continuation? Are there some upfront investments required?

Yes. I think there's going to be upfront investment required. I think we're going to thoughtfully expand specialties in a thoughtful way as we've done in the past through stage gating and ultimately bringing each of these specialties to effectively what is the gold standard where we run the company at a 1-year payback period or less. I think what's very exciting is you see a lot of synergy value across many of these specialties, right? So we spoke around earlier the concept around how diagnostics moves you from a world of reactive care to proactive care. I think that's going to hold true more and more in the future. And so I think that the ability to invest in the broader brand plus the ability to proactively help consumers diagnose challenges with their health, ultimately will drive more and more marketing efficiency in the future because as we're able to identify, hey, you might have low testosterone and you take a lab test for that. The hurdle for that user to convince them to treatment with real data, that barrier becomes much lower, and they're already a subscriber on our platform.

So it's a little bit of almost like why not, historically, we have not leaned heavily into cross-sell. But I think the ability to pair data from diagnostics and the future wearables and other forms with treatment unlocks an immense opportunity for us to continue to drive efficiency on the back half of the decade.

Got it. So it sounds like you have enough kind of in the hopper in terms of growth. But on a longer-term basis, any other categories? I know in the past, the company has talked about kind of sleep and pain management is interesting. How do you think about those specific categories or others, again, more on like a multiyear kind of basis.

Yes. I think on a multiyear basis, I think we have several specialties, many of the ones you mentioned, sleep, pain management and others that are incredibly exciting for us. I think that we oftentimes get feedback from users as well or subscribers on the platform. So I think we'll continue to be very thoughtful around the sequencing which go after the specialties. But I think that there's an immense amount of additional specialties. But again, I think that some of the insights that will come from our platform through diagnostics will help us more precisely refine the road map for the next couple of years.

Great. Do you want to pivot the international initiatives. You're putting a lot of capital to work there to kind of grow internationally. I guess before we dial into the specific deals. What are your thoughts in terms of just the why now in terms of the time to be doing this internationally? Is there anything about the markets or growth trajectory that this is the time to kind of execute on that?

Yes. I think that there's a couple of barriers or variables to this. I think the first is like the -- Hims has had an international footprint for several years. I think like similar to how we approach the launch of new specialties in a very thoughtful and disciplined way, that's very much our approach to international markets. So we've been present in the U.K. through the Honest Health acquisition for several years. We obtained a lot of great learnings from that. We then looked at the amount of free cash flow that the domestic business is able to generate in operating cash flow, where last year, we had north of $300 million. I think given some of the dynamics of the success that we saw progressively with ZAVA acquisition last year, that reinforced greater confidence that there's an opportunity to, through both organic as well as acquisitive means, become the leading global platform.

And so I think that as we look at some of the more substantial acquisitions we made, namely in the form of Eucalyptus, that was several quarters in the making and we oftentimes just think through what are the various markets we want to enter. We do an honest assessment of build by partner. And then we go through and kind of hold various discussions with a variety of different industry participants. And what we observed with the team is that was one of the teams that was very culturally similar to Hims & Hers. They're very thoughtful, -- [indiscernible] system is very thoughtful in their expansion approach, also has the ability to be agile and move very quickly. That was something that excited us. The strength of the domestic free cash flow and operating cash flow that we're generating it was also something that was very, very exciting.

And I think the ability to look at just the overall volatility in the market, like we tend to think more on a longer-term approach. A couple of years ago, the multiples for businesses look quite different between the attractive price point, the confidence that we got in the -- from the learnings in the U.K. market, as well as just the overall strength of the domestic business, like a good opportunity to further place another element to build the global platform for the business.

Got it. What would you say when you think about internationally, like the biggest differences to the U.S. kind of market? Like what are some maybe adjustments you have to make, whether it's in strategy or what matters most to ultimate success internationally?

Yes. I think it's like the -- I think probably -- I almost put the question unanswer, but I'd almost put the question and go into like what is fundamentally similar, right? And I think that that's probably the key element to the equation because I think there's nuances across each market that you kind of go into that vary. But fundamentally, at the end of the day, consumers want to feel great. Consumers want transparency. They want convenience. They want to feel heard by providers and they want effective treatments through many of the things that we offer such as whether it's personalization or just the provider connectivity. Those are things that always hold true. Like it's going to be in no market, do you have a consumer say, "Hey, I don't want to feel great or I don't want to improve my health or I want to pay more." There's just things that are fundamentally standard across the verticals.

And so I think when we view it from that lens, that kind of is a North Star that we operate under. And I think across each market, there's nuances around regulatory mechanics, marketing mechanics and so forth. But I think they're just operating through principles of the things that are similar and how do you bring value across those dimensions. We typically start there, and I think that unlocks a wave of opportunity and then we go into, okay, how do you make that work within the construct of different regulatory standards, whether it's marketing or different regulatory standards around the products you're able to offer. But largely, we've observed that the model that we saw a lot of great success with in the U.S. and the value that our subscribers and the feedback they're benefiting from in the U.S., those benefits translate across borders. And that gives us the conviction to work through some of the regulatory standards and nuances on a market-by-market basis to bring those to consumers.

Got it. And I think you've talked about longer term, it could be kind of a $1 billion business. Today, it's dilutive to margins. Can you just talk about that dynamic in terms of as you ramp, like what does the margin curve look like? And what are some of the important categories for you to kind of get to that $1 billion run rate?

Sure. I would say that like the opportunity for international is immense. I think it's at least $1 billion in the next few years. I think when you look at the curve of the U.S., right, so if you rewind 5 or 6 years ago, the Hims U.S. business was not yet EBITDA profitable, not net income profitable. But as you started to follow a capital allocation framework that enables you to realize benefits from economies of scale, how do you hyper focus on how do you think through leveraging operational efficiency throughout the ecosystem over time, the combination of those 2 things enabled margin expansion fairly quickly where at the end of 2023, we had our first year of adjusted EBITDA profitability. The year after, we were profitable on a net income basis. Last year in 2025, the operating cash flow across the entire footprint was $300 million. These things tend to compound pretty quickly.

I think our view is on a market-by-market basis, the international markets have the capability and the ability to do the same things. And so I think the benefit of being a global player is, we have the ability to invest in those markets accordingly to get them to meaningful scale. We have the expertise of having been through this through fee revs and specialties as well as in the U.S. to think through the construct that enables margin expansion in the future. But I think that as we start to look at what the international business looks like 3, 4, 5 -- 5 years out, I think the kind of the way that you saw the U.S. Arc increasing margins rapidly over time through leveraging benefits of the economies of scale. The international business has the ability to do that. I think the benefit that it gets is, it has -- U.S. operation has the ability to provide funding to make investments probably maybe on an even more aggressive time frame than what we were able to do in the U.S.

Got it. That makes sense. I wanted to go back to kind of the sexual health side of the business. Last year, you guys had talked about kind of a transition in that market. Just kind of where are we at there? And then that has been a headwind to growth. Is there a point you've kind of lapped that and you think growth will resume in that part of the market?

Yes. I think it's -- we disclosed last quarter overall, the Hims business growing north of 30% year-over-year. So we still see in aggregate, very robust growth levels there, the Hers side of the house growing in the triple digits. And so I think that for the sexual health transition, something we're going to be very thoughtful around. I think our expectation is that we'll start to get through that in the back half of this year. I think that a large part of it is at our discretion though, right? If we see newer specialties take hold and scale faster, there's the ability to be more aggressive with that transition. If the new specialties follow more of the conservative approach that we typically take, we have the ability to do the transition in a more muted way.

And so I think that this will be something that we'll dynamically continue to monitor throughout the year. The effect of the sexual transition is getting smaller year-by-year as you see a greater and greater benefit from the stronger retention of the daily cohorts and also as our on-demand business becomes smaller in nature. I think it's going to be something that we expect to start to see the effects of that received in the back half of this year, but something that we're dynamically watching.

Got it. And that triple-digit growth on the Hers side, you guys have talked about $1 billion in revenue this year. Can you talk about just some of the key drivers there and importantly, just the durability of strength on the Hers side?

Yes. I think it's overall quite durable. I think you have specialties that have launched in the platform such as Hers dermatology that supports skin and as well as hair, mental health business historically and then the weight loss offering as well. Now with some of the newer specialties such as diagnostics and menopausal support, I think the combination of these things and the continued evolution to bring more and more offerings and improve the overall breadth of specialties on Hers gives us conviction that it will be on pace for the $1 billion this year as well as have opportunity in the future to continue to grow and scale.

Got it. Let's pivot just to technology and AI, and you guys have talked about kind of agents and would love to get a sense or just an update in terms of what investments you're making, what it kind of means for the platform today?

Yes, sure. I mean I think there's some things that are going to be increasingly visible to consumers, and there's also the things that just inherently help us move faster. So alluded to this kind of at the start of the discussion that we're having where our ability to launch 3 complicated specialties is just a testament to the overall strength of the technology team and how they're continuing to evolve the platform. I mean you're going to continue to see us move faster, both in terms of the consumer-facing things, the ability to get your lab insights, interface and engage with the provider. I think we will continue to evolve and become more dynamic over time. As we kind of play this out over a couple of years, I think there's kind of a few key phases where I think technology can really transform the experience for subscribers on our platform.

Earlier in the journey, you kind of have the concept of like what happens with respect to how does the patient get diagnosed. So everything from the experience of when you come in, how does the overall experience for how you engage with the platform to seek treatment look like. There's a ton of opportunity to start to harmonize that and leverage technology for more customizable and seamless experiences. Then I think with the breadth of personalized offerings, there's the fundamental question of -- for a user, many users want to work with a provider to identify what is the most appropriate treatment for them and oftentimes, I find myself even doing this of asking like, well, why this treatment? The ability to start to equip with real stories, real data, real permutations with diagnostics, I think, is fundamentally a game changer.

And when you also start to think around, historically, we've been able to see intent to outcome, which medications for certain segments of users retain on which ones did not, what side effect profiles the individuals bump into, you actually start to pair that now with like real quantitative outcomes from diagnostics, what improvements across which metrics of users see with treatments, showing that and demonstrating that to users over time, like that becomes a very powerful in-journey experience.

And then as you start to go into the follow-on care, that also is an area that's ripe for opportunity as well. And so I think that users constantly come to the platform, wanting to engage and ask more questions for, well, how do I improve my care, XYZ question, particularly in our weight loss specialty, we see that users are wanting to utilize many different tools from instructions on the medication to also instructions around calorie counters, water intake, trackers and other tools, the ability to start to fold that dynamically into programmatic AI agents in the form of things like care coaches or nutritional coaches, that becomes very powerful. And as we look through the talent that we brought on, on the engineering team over the last year, I think we're very well positioned to start to bring that value across the ecosystem that we just talked through.

Got it. And how about MedMatch? Where does that fit in, in terms of where it stands today and into the overall strategy?

Yes. I think we're -- we still continue to be excited by MedMatch. I think that plays more into like that diagnostic experience that I mentioned of how do you fundamentally help providers and subscribers identify and [indiscernible] for the treatments that are best for them. I think just the introduction of more data in the form of diagnostics and in the future, wearables and other inputs that we'll get will fundamentally help tools like MedMatch and others in the overall diagnostic experience.

Got it. In addition, from the AI lens in terms of consumer experience that you walked through, anything internally in terms of efficiencies or things that you expect to be able to kind of scale even better going forward?

Yes. I think I just -- I think the example of having the architecture and the ability to move quickly to launch through complicated specialties, like I mean, in our history, that was just not something that we've done before. I think that's a reflection of the type of talent that we brought in that will enable us to move quicker. I think there's also going to be things on, obviously, the cost efficiency side of the house, whether that's through continuing to improve the customer support costs, but like not degrading the efficiency or the overall quality and experience that the user is able to get.

So I think that there are going to be cost reduction efforts that -- across the organization that will present themselves. But I think what's more exciting, I think energizes myself and many other members of the team is just like what the overall expansion opportunity can look like and what that can provide from a revenue and margin profile perspective in the future.

Got it. No, that is because I know there's a lot of focus today around the margin side, but revenue opportunities could be very appealing. Just as we finish in the next couple of minutes, I do want to spend time on just vertical integration. And really in the context, if I think about what's a competitive market, you have large organizations like Amazon, you have a long tail of private telehealth companies. Just update us in terms of how powerful that's been from a verticalization perspective and how differentiated do you think that is versus other offerings out there?

Yes. I think it's a question that has kind of come up every -- in the last 4 years, every year that I've been here. And I think that we continue to execute strongly across kind of the 4 levers that I think differentiate Hims & Hers. And I think if it was just like one individual lever where it's like this is the secret sauce for why we're differentiated. I don't know that that's necessarily durable. But I think the fact that like we continue to execute across the 4 key levers. One is just the overall brand. I think consumers increasingly know both the Hims & Hers brands and are continuously drawn to those brands. I think that, that has been a historical differentiation factor for the organization.

When you look at the technology and the benefits that we get from scale, north of 2.5 million subscribers on the platform, again, I think we're one of the few players in the entire health care ecosystem that goes from [indiscernible] all the way to outcomes, I think our ability to take that and adapt the offerings that we have on the platform has historically been a differentiating factor as well. I think as you start to inject more richer data, things like lab diagnostics, wearables and pair that with some of the AI capabilities that we talked around earlier, I think that ecosystem becomes more and more powerful. The personalized capabilities that we spend a lot of time speaking around, we've put hundreds of millions of dollars of CapEx over the last couple of years to build out those capabilities. And we have the data to know increasingly what are the things that are most interesting for our subscriber base at scale. I think the ability to execute on that has been immense.

And I think the final component is really just like the strength and the quality of the provider network that we do have. I think being one of the largest players out there, our ability to attract and draw some of the best medical and provider talent truly has been differentiating. And so I think our ability to continue to execute across the levers that we mentioned on the growth side, but also to reinforce these components of the flywheel is what makes me super excited on a day-to-day basis, but also gives me the conviction that we'll continue to see the strong growth across not only domestically but internationally for the business as well.

Great. I think we're right on time there. So I appreciate the insights into the business, Yemi. Thanks for being with us.

Awesome. Thanks for having us.

Thank you.

Hello, and thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the Hims & Hers Fourth Quarter 2025 Earnings Call. [Operator Instructions] I would now like to turn the call over to Bill Newby, Head of Investor Relations. Bill, please go ahead.

Good afternoon, everyone, and welcome to the Hims & Hers Health Fourth Quarter and Full Year 2025 Earnings Call. Today, after the market closed, we released this quarter's shareholder letter, a copy of which you can find on our website at investors.hims.com. On the call with me today is Andrew Dudum, our Co-Founder and Chief Executive Officer; and Yemi Okupe, our Chief Financial Officer. Before I hand it over to Andrew, I need to remind you of legal safe harbor and cautionary declarations.

Certain statements and projections of future results made in this presentation constitute forward-looking statements that are based on, among other things, our current market, competitors and regulatory expectations and are subject to risks and uncertainties that could cause actual results to vary materially. We take no obligation to update publicly any forward-looking statement after this call, whether as a result of new information, future events, changes in assumptions or otherwise.

The risks, uncertainties and other factors that could cause actual results to differ from our forward-looking statements are described in our earnings release and SEC filings. Please see our recent earnings release and most recently filed 10-K and 10-Q reports for a discussion of these risk factors as they relate to forward-looking statements.

In today's presentation, we also have certain non-GAAP financial measures. We refer you to the reconciliation tables to the most directly comparable GAAP financial measures contained in today's press release and shareholder letter. You can find this information as well as a link to today's webcast at investors.hims.com. After the call, this webcast will be archived on the website for 12 months.

And with that, I will turn the call over to Andrew.

Thanks, Bill. Good afternoon, everyone, and thank you for joining us today. I'm excited to tell you about the tremendous progress we're making at Hims & Hers. This starts, as it always has, with our fundamental belief that everyone should have access to the highest quality of care available, customized around each person and their individual needs. Today, only the wealthiest in our society can expect this level of care. By continuing to put the customer at the center of everything we do, we are changing that.

Our teams are pursuing this vision every day across an expanding set of specialties. We have proven that access to care doesn't need to be limited by privilege, prices don't need to be prohibitive, and customers don't need to settle for a one-size-fits-all approach. We believe GLP-1s are a case study in how medicines are coming to market differently. The dynamics we've seen over the last 18 months, including U.S. prices for injectable GLP-1s falling more than 80% reflect a broader disruption happening within the United States. Customers are demanding better access, more direct engagement and prices that align with other regions around the world.

That pressure is forcing a long overdue conversation, how do we use today's technological advances to help more people feel great? We see this moment as the early stages of a new model that actually works for everyday people. Netflix and Spotify reshaped how people could access not only a broader range of content, but also the best the industry has to offer. Health care must evolve towards that same consumer-oriented distribution model. That evolution will demand creativity and new commercial frameworks for consumer platforms and drug makers work together to help people get healthy.

Our platform puts us at the forefront of that change. Before ever scaling our weight loss offering, we built a platform that surpassed $1 billion in revenue and achieved profitability by scaling offerings like sexual health and dermatology, specialties that continue to grow today with strong unit economics that allow us to fund the next opportunities for growth.

GLP-1s are an example of one such opportunity and have provided a meaningful acceleration to the business. But they are a single treatment within a single specialty on a broader global consumer platform that is growing stronger and more diverse with every investment we make. At the end of 2025, over 2.5 million subscribers on our platform were benefiting from our pursuit of this vision. As we expand new offerings that can serve our customers as they enter different life stages, we are increasing our ability to build and maintain deep, longer-term relationships.

With only a small minority of subscribers utilizing a compounded GLP-1 treatment, it is clear to us the impact of what we are building reaches well beyond a single weight-loss treatment. By leveraging the same technological advancements that completely changed how we experienced entertainment, how we travel from place to place and even how we manage our finances, we are making high-touch personalized care accessible to millions of people across more specialties and in more geographic markets. No one is better positioned to create a world where more people can access quality care. That is our core belief, and it's one we do not take lightly.

We've spent years building operational expertise across each of our offerings, growing customer awareness and leveraging scale to drive broader accessibility to personalize care. As a result, we can now bring new offerings and markets to the platform more quickly and efficiently than ever before, whether you live in a rural Midwestern community in the U.S., a large city in the U.K. or somewhere in between.

To give you an idea of how our speed to market has changed, historically, we targeted launching one new specialty every year, and each of these usually require a few years of development before becoming, meaningful contributors. Longer tenured offerings like sexual health and hair loss for both men and women took 3 and sometimes even 4 years to eclipse $100 million in annual revenue. Comparing this to how we operate today is truly remarkable.

As we have shared in the past, our weight loss offering reached $100 million revenue run rate in less than 7 months after launch and that excludes any contributions from compounded GLP-1s. Within a span of 3 months in 2025, we launched our new Labs offering as well as hormone therapies with support for low testosterone, menopause and perimenopause. In just 90 days, we created 3 distinct new entry points to our platform, each addressing large, underpenetrated markets that have been largely ignored by the traditional health care system.

While not every new offering will scale the same pace as weight loss, early customer success and accelerating customer adoption following the placement of our Super Bowl commercial gives us confidence that each of testosterone, menopause and Labs can eclipse $100 million in annual revenue in the near future. Even more energizing since launch, we've identified that over 70% of Labs customers may be eligible for treatment plans offered through the platform and more than 95% of individuals utilizing a testosterone support offering experienced an increase in testosterone levels within the first 2 months of treatment, with an average increase of over 80%.

These 3 new entry points are not simply new offerings. They are a start to far deeper relationships and value for our customers. These early signals demonstrate our evolution towards providing access to more proactive and preventative care. Insights we glean through our platform can inform an expanding selection of care pathways and can streamline the process for customers to get support where they need it the most. Today, we are addressing areas like cardiovascular risk, metabolic dysfunction, hormone levels and expect that over time, we'll add areas such as performance, recovery and sleep. As we accelerate the development of a more comprehensive approach in the U.S., we're also taking significant steps to extend our reach abroad. We see expansion into new international markets as the next logical step in bringing the trusted Hims & Hers experience to more people and to more places around the world.

Last year, our acquisition of ZAVA's deepened our presence in the U.K. and enabled our entry into Germany, France, Ireland and Spain. More recently, the acquisition of Livewell extended our presence into Canada, one of the first markets that is expected to have access to generic semaglutide.

And just last week, we announced, we signed an agreement to acquire Eucalyptus, a leading global health innovator. Upon closing of the transaction, we will further strengthen our U.K. and European presence while also bringing the Hims & Hers brands into new markets like Australia and Japan. I have known Tim Doyle, the Co-Founder and CEO of Eucalyptus for years and have enjoyed watching him and his teams build an innovative health care experience that is focused on safe, highly accessible care and puts customers at the center of everything they do. I am confident he is the right leader to make the Hims & Hers experience central to how customers in each of these new markets approach their daily health.

The opportunity is significant. We believe that with the deliberate investment and execution, we will have the teams in place to drive category leadership in each of these markets, positioning our international business to scale to more than $1 billion in annual revenue within the next 3 years. This growing presence across both specialties and geographies provides important building blocks for the future of healthcare we are driving. There are 3 key elements to that future, and we are investing across technology and infrastructure to bring them to life.

First, innovation in diagnostics and devices will continue to evolve how each person understands their whole picture of health. With our recent lab launch, we are providing customers with over 130 biomarkers across key areas of long-term health. Results are delivered directly within our app. For AI-supported readouts, highlight metrics that are already optimized and those that need attention, while also educating customers on both lifestyle and clinical interventions. And with the acquisition of YourBio, we plan to make targeted and condition-specific lab testing, more convenient and approachable with technology that can be used in the comfort of your own home.

Together, these new services and expanding capabilities will give customers a deeper understanding of their health and help providers make more informed decisions. Over time, we expect to build on this with the integration of wearable technology like continuous glucose monitors and daily fitness trackers as well as expanded testing options that bring insights like polygenic risk scores directly to our customers.

Second, AI will become a critical layer on top of that data that helps define, refine and implement precision treatments, interventions and lifestyle adjustments. Our growing technology and product teams reporting to Mo ElShenawy and Dheerja Kaur are ensuring that as our offerings expand and deeper insights help uncover areas of need, we are building the experience that makes access to proactive care simple and readily available. We envision customers being able to add, adjust or switch treatments within a single intuitive platform as their health evolves.

At the same time, static and reactive communication is being replaced with proactive conversational support to guide customers throughout their journey. Early deployments of proactive messaging and weight loss have already driven more than a 50% increase in weight logging frequency, signaling an ability to improve customer commitment and engagement as they progress in their weight loss journey. And behind the scenes, automation is removing cumbersome processes and facilitating administrative interactions, allowing providers to focus on clinical decision-making. The result is faster responses, higher customer satisfaction and a scalable model that can deliver access to high-touch care to millions of people while still prioritizing clinical excellence.

And third, deeper data and more proactive care demands more precise personalized treatment plans for each customer. Doing that at scale means investing in an infrastructure that can deliver access to personalized treatments in custom formulas that safely bring together pharmaceuticals and supplements. We know treatments should be driven by what's best for the customer, not by what's covered by insurance or what's currently in stock at the pharmacy.

We've spent years building the physical infrastructure required to deliver access to truly personalized care at scale. Over the last 3 years alone, we've invested more than $300 million into our facilities, expanding our footprint to over 1 million square feet across pharmacy operations, lab testing capabilities and R&D supporting innovations like peptide therapies. This foundation allows us to combine quality with broader access and continued innovation so that access to personalized care is delivered consistently across our platform.

The first 2 pillars deeper data and stronger technology are advancing across the industry. We believe those advancements demand the third pillar, a scalable way to make the final step in healthcare more precise and more personal. We believe our technology and infrastructure investments put us in a leadership position to bring a more individualized experience to tens of millions of customers while maintaining the high standards customers have come to expect around the quality of their care.

At Hims & Hers, the team wakes up every day motivated to change an outdated healthcare system that has refused to put the customer first. As we work to fundamentally reinvent these systems, we expect to encounter challenges. It takes time for industries to change, but we are navigating this on behalf of our customers. When it comes to ensuring more people have access to the most innovative and groundbreaking treatments and services available, we will continue to fight, holding true to our mission that we can make more people feel great through the power of better health.

Pursuit of this mission takes commitment and resilience. That was true at our founding and it is true today. We will continue to push for better, more accessible care around the world by focusing on a consistent set of priorities, bringing more offerings to our customers with more insights and deeper personalization capabilities and when appropriate, partnering with leaders who also believe in a better healthcare experience.

By investing with conviction across these priorities, we believe Hims & Hers will be a leader in the next era of health care, which will continuously evolve to better serve the customer. This conviction underpins our confidence in our ability to push towards our 2030 target of $6.5 billion in revenue and $1.3 billion in adjusted EBITDA.

At Hims & Hers, we are honored to lead the shift towards the consumer-centric system. We feel both the privilege and responsibility to change what people expect from their health care. It is why we started on this mission, and it continues to motivate us every day.

Thank you. I'll now pass it to Yemi to walk through the financials.

Thanks, Andrew. I'll start by providing an overview of our fourth quarter financial performance before diving further into our outlook for 2026. Our progress in 2025 reflects the increasing scale of our customer-first platform as we continue to expand access to high-touch personalized care across more conditions, enabling us to build deeper, more valuable relationships with our subscribers.

Subscribers on our platform grew to over 2.5 million in 2025 as we continue to execute on our mission of helping the world feel great through the power of better health. Personalized solutions remain a cornerstone of our ability to attract and retain subscribers. Personalized solutions encompass tailored treatments and programs that seek to address key consumer needs and concerns. These needs include tailoring dosing to meet individual patient needs, simplifying treatment regimens by leveraging a single solution to address multiple conditions, improving customer options through alternative form factors and providing data-driven insights and tools to supplement medical treatments.

In 2023, we began increasing investment to expand the assortment of personalized treatments and have seen resounding success. Since the end of 2023, we've added almost 1 million net new subscribers to our platform. At the end of 2025, approximately 65% or 1.6 million of our subscribers were utilizing a personalized treatment. The differentiated solutions that we're able to provide not only aid in drawing new subscribers to our platform but also drive higher retention and customer lifetime value.

Incremental insights and data from new offerings like Labs will enable us to better attract potential consumers for treatments across newer specialties such as hormonal support. We believe this will increase subscriber engagement and have already seen early success signals as monthly revenue per average subscriber increased 11% year-over-year to $83 during the fourth quarter. Continued subscriber growth and deepening engagement are translating into financial success.

Revenue in the fourth quarter was $618 million, representing a year-over-year growth rate of 28%. For the 2025 fiscal year, revenue was $2.35 billion, representing a year-over-year growth rate of 59%. Our 2025 results continue to reinforce our conviction that we have a strong multiyear growth runway across 3 key areas of the business: the Hims brand in the U.S., the Hers brand in the U.S. and an expanding international footprint.

Within our Hims brand, we drove year-over-year revenue growth of over 30% in 2025 despite headwinds resulting from our deliberate efforts to pivot away from generic on-demand sexual solutions. Since 2023, we've introduced several combination treatments within our sexual health specialty that address health concerns such as low testosterone, heart health, hair loss and vitamin deficiencies. Nearly 0.5 million subscribers on our platform are benefiting from these daily solutions and the year-over-year growth of those subscribers consistently exceeded 30% throughout 2025.

Over 2026, we expect to continue this transition. Our expectation is that retention benefits from our daily sexual health offerings as well as the evolution of new offerings such as testosterone support will continue fostering a robust growth for the Hims brand.

Switching to Hers. In 2025, our Hers business continued to display triple-digit revenue growth and accounted for nearly 40% of U.S. revenue. Similar to our Hims business, revenue growth is increasingly driven by deeper engagement across a broader set of women's health needs. Continued expansion in established facilities like weight loss and dermatology is being bolstered by new offerings in menopause support and diagnostics, presenting opportunities to strengthen customer relationships and extend their tenure on the platform.

The depth that we are able to provide across a breadth of specialties, making us relying on no one single offering is the power behind our domestic business. Strengthened tenured offerings such as men's dermatology, women's dermatology and sexual health allowed us to surpass $1 billion in revenue, reach adjusted EBITDA and net income profitability and generate positive free cash flow. This allowed us to aggressively invest in our weight loss offering and add a meaningful growth vector to our portfolio with access to oral and injectable weight loss treatments.

Consumers have experienced success with both oral solutions and injectable GLP-1s available through our platform with a typical consumer reporting average weight loss of approximately 22 and 29 pounds in their first year of treatment, respectively. While GLP-1s have accelerated our trajectory, the majority of revenue and cash flow generation across our portfolio is generated from our non-GLP-1 offerings. Higher margins from our more tenured offerings will be instrumental in providing resources necessary for investment to scale the next wave of specialties, inclusive of weight loss, lab testing, low testosterone and menopausal support.

Our consumer-centric approach has resulted in immense success in the U.S., where revenue grew over 50% year-over-year to more than $2.2 billion. Our belief is that the value we bring from our approach transcends borders. In 2025, we welcome ZAVA and Livewell to the Hims & Hers family and now we're able to serve consumers in Germany, the U.K., Ireland, Spain, France and Canada.

International revenue grew almost 400% year-over-year to $134 million. We expect our international footprint to become a more meaningful portion of our revenue in the future. As a reflection of this importance, we will adjust our revenue disaggregation from online and wholesale to U.S. and rest of world revenue going forward.

With that, I'll now turn to profitability dynamics before diving deeper into our balance sheet and future plans for investment.

Adjusted EBITDA in 2025 increased nearly 80% year-over-year to $318 million. Adjusted EBITDA margins on a full year basis expanded nearly 2 points relative to 2024 to 14%. In the second half of 2025, we meaningfully invested to increase the density of our technology talent, scale new specialties and deepen our policy and safety talent to facilitate the continued expansion of our operational footprint.

Adjusted EBITDA was $66 million in the fourth quarter, representing an adjusted EBITDA margin of 11%. Gross margins in the fourth quarter declined approximately 2 points quarter-over-quarter to 72% as tailwinds from continued growth in non-weight specialties were offset by growing revenue contributions from our international markets expenses related to the launch of new specialties and pressure from the shorter shipping cadences in the weight loss that we discussed last quarter.

Prior investments in our brand and product suite continue to be a key driver in our ability to drive marketing leverage. Marketing as a percentage of revenue in the fourth quarter and fiscal year 2025 was 39%, representing a 7-point year-over-year improvement. We continue to see acquisition gains in lower cost and nonpaid channels, following years of investment in brand campaigns to drive greater top of funnel awareness. Additionally, retention improvements across our subscriber base are compounding as we directly address more customer needs with a growing portfolio of personalized solutions and a customer experience that is driving stronger engagement.

G&A cost as a percentage of revenue increased 2 points year-over-year in the fourth quarter as a result of increased international head count as well as additional expenses related to the hiring of new leadership talent. On a full year basis, G&A cost as a percentage of revenue were essentially flat relative to 2024. A similar dynamic was seen in operations and support costs. Technology and development costs as a percentage of revenue increased to 7% for both the fourth quarter and full year.

Investment in engineering and AI talent has resulted in modest deleveraging, but we believe the ROI will be substantial as a result of an ability to move faster and elevate our consumer offering. We have already seen early signals as demonstrated by our ability to bring multiple specialties to market in the second half of 2025 as well as our ability to improve the customer experience and realize operational efficiencies.

Net income for the full year increased notably year-over-year to $128 million as compared to 2024 net income after adjusting for a tax benefit in the prior year related to the release of a domestic tax valuation allowance. While we expect to maintain annual net income profitability, our priorities continue to center on long-term free cash flow generation. This enables us to expand our operational capabilities as well as accelerate our strategic road map, including through M&A.

In 2025, we generated $300 million in operating cash flow. Strong cash flow generation from our domestic business as well as the strength of our balance sheet allowed us to actively put capital to work across each of our priorities. First, we invested over $225 million into our operations through discretionary CapEx to drive both expanded capacity and new capabilities across our domestic facilities, which now total over 1 million square feet.

Second, in 2025, we entered into agreements to deploy over $330 million in purchase price consideration towards acquisitions that have allowed us to accelerate expansion into new international markets as well as launch R&D efforts in the peptide space. We believe YourBio, which recently closed in 2026 for approximately $150 million, will ultimately allow us to augment our diagnostic specialty in the future with a painless at-home offering.

Lastly, we repurchased roughly $90 million worth of common stock in 2025 with $80 million worth of shares repurchased in the fourth quarter at an average price of $39. In the fourth quarter, we completed our $100 million share repurchase program and have $225 million remaining on the $250 million repurchase program that commenced in November of 2025.

After meaningful investment in 2025, we generated over $57 million in free cash flow and ended the year with $929 million of cash, short-term and long-term investments on our balance sheet. We believe our ability to leverage our financial position and the rigor of our capital allocation framework will position us to rapidly serve a broader set of consumers, placing us on track to become one of the largest consumer-centric health care platforms in the world.

Our capital allocation priorities will focus on deepening our ability to combine data and insights, thoughtfully expanding personalized solutions and elevating digital and physical consumer assets to improve the health care experience for tens of millions of consumers.

In 2026, we expect this to materialize across the following areas. First, we will continue investing in the capacity and capabilities of our operational facilities. We expect investment in these facilities to unlock our ability to respond to insights from labs and eventually wearables with a broader set of personalized treatments. Additionally, verticalization reduces our cost to serve, ultimately allowing us to pass value back to consumers and selectively expand margins.

Second, we will continue to invest in new experiences and physical technologies that will allow us to make treatments more accessible for our subscribers. We believe the integration and scaling of YourBio, which uses a virtually pain-free microneedle blood sampling technology, is a great example of this. Long wait times from overcrowded facilities, fear of pain or an inability to find the time to drive to a facility, all service barriers to prevent many consumers from obtaining deeper insights into their health.

We expect that investments in these areas will ultimately allow us to provide users with the ability to perform blood draws from the comfort of their own home and AI technology can help orient providers toward the tests that are most impactful for a subscriber at any point in time.

Third, we expect to continue investing in technology. We are one of the few platforms that have insights into the patient journey from intent to outcomes and with Labs this differentiated capability further expands. A world-class product experience, high-quality provider network and personalized solutions backed with data are differentiating factors for us. We expect these investments to deepen customer engagement and retention as well as unlock operational efficiency gains over time.

Fourth, we expect to continue expanding the network of partners that will further our ability to become a curator of world-class health care services. Over the coming years, our ambition is to partner with other companies that share our vision to unlock more value for our customers.

International expansion will perhaps be one of our most significant areas of investment in 2026 and the coming years. We recently signed a deal to welcome Eucalyptus to the Hims & Hers family. Upon closing of the transaction, Eucalyptus will complement ZAVA and deepen our presence in the U.K. as well as unlock a model more closely aligned to our domestic business in Germany, Australia and Japan. Assuming the transaction closes, our expectation is that our collective international business will break even within 12 to 18 months, inclusive of Eucalyptus.

Eucalyptus deploys a rigorous capital allocation framework similar to our own. They currently have an annual revenue run rate north of $450 million and strong execution enabled them to drive triple-digit year-over-year growth in each quarter of 2025, while also maintaining line of sight to profitability. While we do not expect the business to drive meaningful adjusted EBITDA losses, we do not expect to drive meaningful margin expansion for several years in our international business.

Across the majority of international markets, we expect to take a growth-oriented approach and focus on reaching as many consumers as possible before focusing on the margin expansion efforts, even if that means running certain markets at or near breakeven on an adjusted EBITDA margin basis. We saw this approach work in the U.S. and will utilize a similar playbook to progressively expand markets towards margin expansion in the future. This is our largest acquisition to date at up to $1.15 billion of total consideration. The upfront payment at close is expected to be approximately $240 million, with the remaining payments for guaranteed consideration and earnouts to be made through 2029.

As we have done in the past, we will monitor the landscape of potential opportunities to reinforce our balance sheet to maintain optionality in ways that thoughtfully considered dilution. However, we are prepared to fund the majority of the Eucalyptus transaction, with the strength of our existing balance sheet and cash flow generation from our domestic operations through 2029.

With that, I will provide an additional perspective on our initial outlook for 2026. Note that these numbers do not include the Eucalyptus transaction. In the first quarter, we are anticipating revenue in the range of $600 million to $625 million, representing a year-over-year increase of 2% to 7%. We expect adjusted EBITDA to be between $35 million to $55 million, representing an adjusted EBITDA margin of 7% at the midpoint of both ranges.

For the full year, we are anticipating revenue of between $2.7 billion to $2.9 billion, representing a year-over-year increase of 15% to 24%. It is our expectation that 2026 adjusted EBITDA will be between $300 million and $375 million. These adjusted EBITDA and revenue ranges imply an adjusted EBITDA margin of 12% at the midpoint of both ranges.

Behind our outlook are the following assumptions: first, we expect an approximately $65 million revenue headwind in the first quarter, resulting from the change in shipping cadences in our weight loss business following the shift to 503(a) fulfillment. For context, in the second half of 2025, this revenue headwind was approximately $40 million. We expect this effect to mitigate as cohorts continue to stack throughout the year. It's important to note these dynamics affect only the timing of revenue recognition and not customer demand or engagement. Demand for weight loss remains strong with subscribers growing more than 70% year-over-year in the fourth quarter. We expect subscriber growth within our weight loss offering to remain strong throughout 2026.

Second, our investment in our 60 second Super Bowl commercial is expected to place additional pressure on EBITDA in the first quarter. This investment played an instrumental part in our ability to educate consumers about our platform as well as evolve the brand towards being known for proactive healthcare solutions. No change is expected from our framework that calls for a payback period of less than one year on marketing spend. We expect adjusted EBITDA margins and revenue growth to scale from the first quarter.

Third, our expectation is for several of the newer offerings such as low testosterone, menopausal support and labs to incrementally scale throughout the year. Newer offerings will play a key role in maintaining solid growth for Hims as well as helping the Hers portfolio continue to scale and reach its first year of $1 billion in revenue. Investment across most offerings will be stage gated and incremental investment released as these new offerings hit unit economic and scale milestones. We believe each of these offerings has the potential to drive meaningful future growth and will play a critical role in our ability to obtain our 2030 aspirations.

Fourth, investment in our platform's product experience, technology and AI capabilities are expected to become a larger priority in 2026. We believe we are in a unique position to connect deeper health insights with improved conversational support that is available whenever our customers are in need. Our guidance affords us the flexibility to lean into these opportunities to create a more engaging customer experience from start to finish, driving stronger conversion and retention over time.

Finally, international expansion will offer a meaningful driver of incremental growth in 2026. Our initial outlook anticipates at least $200 million in revenue contributions from international markets. This includes any additional contributions from our acquisition of Eucalyptus, which is expected to close in the second half of this year. Assuming the transaction closes as expected, we would expect additional second half revenue contributions of at least $200 million.

Our primary objective in international will be oriented towards growth expansion. While we do not expect meaningful adjusted EBITDA losses, we're expecting newer international markets to run near breakeven. We left 2025 with a great deal of momentum that has allowed us to continue bringing new sources of value to millions of subscribers. Our success in the U.S. places us in a position to thoughtfully expand and rapidly scale across international markets such as the U.K., Germany, Canada, Australia, Japan and others.

Strong free cash flow and adjusted EBITDA from tenured specialties in our domestic operations will allow us to continue expanding specialties while also concurrently growing our subscriber base across strategic markets. In the near term, we expect many of these international markets to run at breakeven, but in the medium to long term to become meaningful growth in profitability vectors as we optimize and realize economies of scale, similar to what we achieved in the U.S.

Continued growth in the U.S., combined with the scale of the international opportunity in front of us, reinforce our confidence in our ability to meet or exceed our 2030 ambitions outlined last year, at least $6.5 billion in revenue and $1.3 billion in adjusted EBITDA. Our success would not be possible without the significant efforts of Hims & Hers' employees around the world. I'd like to thank them, our subscribers and our shareholders for supporting us in our mission to help the world feel great through the power of better health.

With that, I will now turn the call back over to Bill to kick off Q&A with 2 questions from our retail community.

Thanks, Yemi. And thank you to everyone who's asked questions over the weekend. First, from Jay, who has a question on our growing international footprint. With the acquisition of Eucalyptus accelerating international expansion into Australia, Japan and building a deeper presence in Western Europe, can you share more about the company's long-term vision and key priorities for global growth over the next 3 to 5 years? How do you plan to integrate Eucalyptus's operations and brands to drive synergies?

Yes. Thanks, Bill. And thanks, Jay, for the question. I think from the beginning, we've always believed that the vision for consumer-centric health was global. When you think about great health care, it's a thing that we care about most personally, it's a thing that we care about for a family. And yet no matter where you are in the U.S., the U.K., Germany, when you talk to actual people their frustration with the current status quo is consistent. And so we have really huge ambitions globally.

At the core of it is to target the 10 key most critical markets and to win them handily over the next 12 to 24 months across acquisitions of ZAVA and Livewell and with the addition of Eucalyptus, I think we have those critical pieces in place. I've known Tim Doyle for going on 4 to 5 years, he is the founder and CEO of Eucalyptus and have absolutely loved watching that team execute. They're exceptional leaders with a strong shared commitment to the consumer. And so when I look at the combination of the 2, I think we have a bold ambition to see the Hims & Hers brand be unified across all of these major markets within the next year or 2 and a North Star of $1 billion plus in incremental international revenue in the next few years as well.

Thanks, Andrew. And the next question comes from the Hims & Hers retail community. What impact do you expect from the regulatory and legal scrutiny on growth numbers for the next few years? How will you reduce risk from a potential ban on compounding GLP-1s and what categories are positioned best to pivot the business away from GLP-1s?

Yes, it's a great question. I think that maybe to step back a little bit, when I founded the company nearly 10 years ago, the vision here was not to launch treatments on a website, it was to disrupt how customers have access to great care. And I think that opportunity today is just as strong as it was nearly 10 years ago. When we first launched, for people who have been following us, people used to call us the Viagra company, right? We're an ED-only business. And for years and years, that was the headline. That was the concern dependency on Viagra, that category. And then as we progressed and we launched the Hers business and that was getting started, people started to worry, hey, maybe this is a Hims only business. Maybe Hers doesn't have the ability to replicate itself and scale as well. And now that business is achieving this year, hopefully, $1 billion plus in revenue.

And I think the reality is Hims & Hers has always been and continues to be more than one treatment. When you look into the business today, it's important to remember that the majority of our revenue and profitability is driven by offerings outside of weight loss. And really, the amount of patients that actually are on the compounded GLP-1s is actually quite a small minority of the aggregate subscriber base. And so when referring to -- pivoting the business to manage the dynamics in the ecosystem, I don't really think that's how we feel about things internally.

I think we plan to continue to operate like we always have, which is expanding the offering systematically to patients, broadening the assortment on the platform and the care that we can offer them, deepening our relation with them, deepening our understanding of them, expand into new categories like labs and menopause and low-T, work on innovation and R&D for future categories like peptides, which we're working on right now. And ultimately, add more value to customers' life in an expanding set of markets.

I think between our existing diverse business lines, the pace of the new expanding categories that I touched on in the prerecorded remarks, as well as now this accelerating international business, there's just really never been a point in our company's life where we've had such a durability in growth engines to achieve the much broader vision for the business.

Thanks, Andrew. And with that, I will pass it back to the operator, and we can begin the regular way analyst Q&A.

[Operator Instructions] Your first question comes from the line of Maria Ripps with Canaccord.

First, I just wanted to ask about your U.S. weight loss business, maybe expanding a little bit on the last question, sort of given all this sort of maybe increased scrutiny on compounded GLP-1s. How should investors think about sort of the durability and maybe growth profile of that business kind of over the next few years? And then secondly, maybe more badly, how is your marketing mix sort of evolving as you expand into sort of broader less stigmatized health categories domestically? And are you seeing sort of structural improvement in CAC and lifetime value sort of as your brand matures?

Yes. Great question, Maria. I'll maybe answer the first part and let Yemi handle the second. I think when we look at the weight loss business domestically, there's an increasing range of assortment, which I think is really important. And we follow what is important for the patients. When you look at both the next-generation therapies that the major drug companies are bringing to market, when you look at the pipeline of biotech in Phase II and Phase III, we deeply believe that in the next 2 to 3 years, there's going to be a dozen or maybe 2 dozen added treatments that are going to make a big difference in people's lives. And for us as a platform and for our patients, we deeply believe that assortment matters.

And so I think we will continue to adjust the model as necessary to ensure that we have the breadth of assortment that patients need and want. As Yemi shared in our remarks before we even had the compounded GLP-1 business line, our weight loss offerings was the fastest category to ever launch, just with our combinations of therapies focused on conditions around metabolic and insulin resistant dynamics. That business scaled to $100 million run rate in just 7 months. And so we believe there's a really durable weight business even if you think -- even kind of in a draconian scenario of compounding GLP-1s not being there. And I think even more so, when you look into the next year or 2, there's an expanding assortment of therapies that I think are going to be very important to patients, and we're going to have to keep evolving that offering in category just like we do in other categories to make sure that we've got great treatments that patients are really looking for.

Then the second part of your question, Maria, just around how we see acquisition trends evolving. And you see some of this in the marketing leverage that we were able to gain that was quite substantial in 2025. Really what we are seeing is that like we are benefiting from the breadth of treatments that we're able to offer on the platform as well as the investments we've made historically around really communicating to consumers the power of the platform. I think with that, we view that, that gives us a competitive edge on the acquisition front.

And then we do see, particularly as we enter newer specialties like Labs, will enable us to provide more insights to consumers as well as move towards the world that's more oriented around proactive care. Our view is that carries immense potential to further drive acquisition efficiency. What we observe on the LTV front is that as we are able to help our providers on the platform, pair consumers with personalized treatments that really are unique and meet their needs, that effectively drives stronger retention across the platform, whether that's as we talked about in the prepared remarks, addressing multiple conditions through more simple mechanisms or helping users balance both efficacy with side effects or providing alternative form factors. We see all of those things as well as the ability to leverage more and more insights to help providers pair consumers with those treatments, driving stronger retention, which ultimately drive stronger lifetime value for the consumer.

Your next question comes from the line of Justin Patterson with KeyBanc Capital Markets.

Great. I thought I'd talk a little bit more about some of the investments you're making. It sounds like between AI, labs and wearables, you're creating the conditions for a flywheel down the road. So I would love to hear a little bit more about just how deep you're looking to go into the wearables ecosystem? How long we should really think about the investments to support some of these initiatives and how we should think about Labs, the steps to scale up Labs over the next year or so?

Yes. Thanks, Justin. I think those 3 buckets are a real focus for the business. And I think when you step back there's just never been an easier way to collect more advanced data from patients across these things, whether it's wearable devices, whether it's polygenic risk scores that you can do a swab on the inside of your mouth, whether it's cancer testing or it's full gene sequencing, I mean it's just really incredible. And so as that accelerates and our investments in YourBio accelerate and we're able to get testing at home for cheaper, cheaper, cheaper cost, we'll be verticalizing that infrastructure so that you as a member of Hims & Hers can be getting access to this type of data collection on a really frequent basis. I think that intelligence layer to then help understand how we get ahead of what you are struggling with or what you may struggle with in the future is going to be an increasingly important part of the business.

And so this is where I think the platform really transitions from focusing on a single treatment to proactive preventative care. I actually think that type of care is in and of itself a new category for Hims & Hers. It's almost a longevity category, so to speak. But I think as people start to realize a platform like Hims & Hers gives you access to what the 1% have and let you take the necessary steps to get ahead of it, it's extremely empowering, right?

And so we are going to go deep in all 3 of those areas. From the device side, either through our own or through partnership, we've obviously already acquired our own blood testing device through our own AI efforts and teams, which we've already started to launch with the Labs efforts. And it's starting to pay off, right? When you look at the prepared remarks, we shared that 70% of people who do a lab test on the Hims & Hers platform identify an area of risk that is treatable on the Hims & Hers platform. right?

Most of the time, this is something patients are learning for the first time that they're prediabetic, that they are at risk of cardiovascular disease, et cetera. And so there's a massive flywheel in making the entry point in data collection and learning about your health extremely low and extremely easy to get started and then ultimately build value over the long term with these patients as we expand our care and can have a more comprehensive look at their health.

Yes. I think what I'd add to that, Justin, is I think similar to what we've done in the past, like we will be thoughtful and continue to stage gate the investment. I think much of what we're investing in kind of follows the 4 pillars that we've always spoken around, which is like the brands, investment in technology and data that provide -- reinforces the personalization and unique products we're able to deliver as well as just the strength of our provider network. And so I think that what you see now is a very vast balance sheet as well as a strong free cash flow that's enabling us to make the transition that Andrew mentioned towards a platform that is more oriented around leveraging data to treat consumers proactively.

Ultimately, we think that these investments as they start to come together in 2026, even outer years, have the ability to quickly have positive ROI and ultimately pay off for themselves and become self-funding. Whether that's in the form of higher lifetime value that we discussed around the last question, or even just with proactive care being able to unlock new insights to consumers to drive better acquisition efficiency through their lower cost channels. Those are all mechanisms that we'll monitor and continue to lean into. But ultimately, we believe, have the ability to effectively make these investments pay for themselves very quickly.

Your next question comes from the line of Craig Hettenbach with Morgan Stanley.

For some of the legacy core offerings, can you just talk about which categories you expect to kind of drive growth in 2026? And then within weight loss, is there a range that you're embedding into guidance for this year?

Yes. Thanks for the question, Craig. Maybe I'll start. I think increasingly, just a concept of -- I just want to caution the concept of core versus like noncore is becoming increasingly less and less relevant. I think that's how we're orienting the business is because the lines across specialties are blending more and more is really around the concept of international and domestic. And then underneath that, what you do see is you have businesses of a varying tenure. We see a lot of potential in both the Hims & Hers specialties for continued growth. I think we were excited to see the Hims brand growth 30% year-over-year in 2025. And we do believe that we're positioned for continued growth whether that's in the form of newer specialties like testosterone that are rapidly emerging or even as we start to see the benefit from the stronger retention on the daily health offerings in both sexual health and greater assortment in other categories like hair, each of these disciplines have the ability within the Hims specialty to continue to power growth.

And then flipping to Hers, we're seeing very much the same element. Historically, newer categories that we've launched have taken 12 to 18 months to scale. I think that as we look at around things like labs, menopausal support as well as some of the tenured categories like Hers Care, we continue to see robust growth across many of those, and I think we'll continue to invest in those. But as we make the transition that Andrew mentioned previously in both his prepared remarks and in the question, we're able to proactively serve consumers. I think that's going to be a pretty substantial unlock that will provide the ability to -- for us to continue to see our tenured specialties grow.

Got it. And then just as a follow-up, when I think through the 2030 target and kind of the path to 20% margin, you commented a few times international is kind of breakeven and there's some investments there. So is there anything around kind of the U.S. business or efficiencies that are helping to potentially offset some of the drag on international just from a margin perspective?

Yes. I don't think that the drag on international is going to necessarily be permanent per se. I think that what we will do, and I think it's almost going to be more on a market-by-market basis, we will look at the opportunity in front of us. I think across most international markets, the orientation will be growth orientation. I don't know that the international universe necessarily will be static for us as well as we continue to utilize our current assets as well as the Eucalyptus team to launch in new markets. Newer markets will tend to probably carry a more challenging margin profile. But then as we look to markets that season over the next 2 to 3 years, where there's already a strong presence in, there's the opportunity to start to see some margin expansion as you get 2, 3 years out.

And you kind of -- if you look at the history of the U.S. and as we made the transition from a loss-making business on our domestic operations to profitability, the ramp in margin as we were able to realize economies of scale kind of from 2022 to 2023 was fairly rapid. And so I think our expectation is on a market-by-market basis, there'll be a similar concept in the international markets. And then as we look to the domestic operations, we are investing fairly aggressively in a number of newer tenured specialties. As those specialties hit their milestones and stage gates, we'll continue to invest. But what you also do see is on a specialty-by-specialty basis, the spread between the tenured specialties and the newer specialties, the margin profile start to converge.

And so I think between that and the domestic operations as well as on a market-by-market basis, international markets kind of in the latter half of this decade, becoming more and more margin accretive. We view that as the path to hit our goal of $6 billion of revenue and $1.3 billion of adjusted EBITDA.

Your next question comes from the line of Eric Percher with Nephron Research.

Andrew, I'd like to ask your perspective on the composition of the international business as we look out a year, both across ZAVA and Eucalyptus in terms of specialties or personalization. And then I know you had this line about becoming a leading provider of branded GLP-1 medications. Is that as simple as what we see running through Juniper today? And how do you think about maintaining relationships with the brand manufacturers?

Yes. That's a great question, Eric. I think the composition overseas will likely mirror eventually as it matures the U.S., right? I think there's a lot of category expansion overseas. And each of these businesses that we are integrating in have different focuses in different markets for the pilot brand in Australia, very focused on men, the Juniper brand focused on women and weight. Ultimately, we think that it will probably converge to have really nice diversity at scale.

I think the overseas -- the relationships with our international teams and the brand and pharmaceutical companies is quite strong because there's really consistency. They've got great report. They've been able to be a large consumer distributor to them. I would expect that to maintain and stay consistent. We don't expect to change that model. I think that's the winning model overseas and would expect it to remain so.

And just a follow-up. Was the comment on the majority of the business being non weight loss, both for revenue? And was it free cash flow or cash flow?

Yes. Yes. The comment was just around the majority of our revenues are actually coming from outside of the GLP-1 business today. And then you can just translate that from the tenured specialties carrying a more robust margin profile from economies of scale. The adjusted EBITDA -- the margin profile tends to be stronger on mature categories as well.

Your next question comes from the line of Mark Mahaney with Evercore.

I just want to ask 2 questions about both the fertility opportunity that you're seeing and then the Labs to date, you've talked about them both in the past. Can you just give us more of an update on the data points that you're seeing and how you think about those opportunities?

Yes. Thanks, Mark. We've yet to launch anything on the fertility space. We have launched in the last couple of months, the menopause, perimenopause and low-T as well as Labs. Those kind of happen side-by-side. So far, I would say just nearly 10 years of testing out go-to-market strategies, I would say we are incredibly encouraged by the early data. I think we believe that each of those 3 have near-term opportunities to scale to $100 million run rate, just like many of our other winning categories.

We also see that the actual engagement with the experience from a consumer standpoint is a very high-value engagement. On hormonal side, men are seeing massive increases in their testosterone levels, feeling better. Retention indications are showing it's in line with some of our best-in-class categories. And on the lab side, also, it's just providing people data that, frankly, used to cost somewhere between $5,000 or $10,000. And so it's an immense amount of knowledge. And then from there, 70% of those people are identifying an area of concern and an area of clinical risk that the platform can actually help treat.

And so I think both in hormones and labs, we're incredibly encouraged. We've got dedicated efforts on both of those. And I'm fully convinced that there will be big parts of the business going forward and for the coming years.

Your next question comes from the line of Brian Tanquilut with Jefferies.

Maybe just a quick question, Yemi. As I think about the range of guidance on EBITDA, pretty wide range there, where it could be down or up in the year. Just curious what the swing factors are that we should be considering that would drive the variability there?

Yes, I think it's a great question. I think a lot of it is like we've historically done in the past. We stage-gate many of our investments where as they hit scale milestones or as they achieve economic profiles, we tend to lean in a bit more. As you look kind of at the end of 2025, we launched 3 specialties that we feel have the ability to be fairly transformative to the platform. And so I think what our guide provides is the ability and the flexibility to lean into continuing to scale those specialties if we see them achieve promising signs on the unit economic front.

We spoke a little bit around how we're investing in tech and some of the ROI that we expect to see there. Additionally, embedded in our guidance is the flexibility to continue to proceed with many of those investments as they shows sign of success.

And then the final area of investment, we spoke around really just in the international business, both in terms of as we do the integration of the assets with some of the companies that we've already closed upon such as Livewell as well as ZAVA but also Eucalyptus potentially coming in the second half, we wanted to leave ourselves a long enough range to invest across all of those areas. And so if we see meaningful opportunities for growth in technology, meaningful growth opportunities in new specialties or meaningful growth opportunities in our international markets, we definitely want to take the growth orientation to take them because we feel like as we've demonstrated in the past and from past pattern recognition, the ability to expand margins with greater scale is something that our teams are quite good at.

Your next question comes from the line of Glen Santangelo with Barclays.

I just want to follow up on the 4Q U.S. revenue number being up 17%. I was kind of curious, if we were to sort of parse out the compounded GLP-1 revenue , the compound GLP-1 is a headwind or a tailwind to that number? And the reason I ask, right, is because Andrew, you're sort of talking about that it's becoming such a small part of the subscriber base, but yet Yemi, you sort of talked about it as a $65 million headwind in 1Q. I'm just trying to reconcile all those data points and how we should think about the contribution at this point, particularly within the fiscal '26 guidance.

Yes, Glen maybe I'll start with that. I think what we -- you do see kind of in the transition from Q4, and then I think you'll really see this in Q1 is just we -- how to shift to where we are recognizing a lower revenue per order, that's not just a shift on new customers. I think it's a shift across the entire business. It's progressively happened over the course of the last, call it, 2 to 3 quarters. the ticket size for the GLP-1 business is a bit larger than our core business. So the revenue impact as well as the EBITDA impact there that we see is fairly meaningful.

But I think that said, I think while GLP-1s have been a meaningful growth factor to the platform over the course of the last year. As we kind of indicated in the prepared remarks, the vast majority of the revenue is made from the non-GLP-1 business. As we continue to diversify, we expect that trend to continue. And Andrew, I'm not sure if there's anything you wanted to add more broadly to that?

No, I think that's right. Thanks, Yemi.

Your next question comes from the line of Ryan MacDonald with Needham & Company.

Andrew, obviously, a lot of news flow sort of post the pill launch and then sort of pulling the pill from the market. Can you just give us an update in terms of sort of sort of where sort of things stand from a regulatory perspective, if you've had any conversations with FDA or DOJ or sort of what level of concern, I guess, there is around that?

And then the second question I have is around clarification on your earlier response. I think it was to the first question. You talked about that, obviously, the pipeline is very strong for at least a dozen or 2 dozen treatments in the next couple of years here. As you think about supporting that broadening assortment, do you intend to do so via branded partnerships as those come to market? Or sort of continuing sort of the historical practice within the business of focusing on personalized offerings instead.

Yes, Ryan, it's a great question. On the pill side, as well as the others, there's probably not too much we can say. I think we believe that the pill was a continuation of the strategy to broaden greater personalized options for patients on the platform and spend many months working on that. I think we pulled it back to prioritize honestly, just engagement and the relationships with the ecosystem stakeholders. We talked to quite a few of them on launch and understood their dynamics and chose to prioritize them in those conversations and so decided to pull it.

Regarding FDA and DOJ, I don't think we can share too much on anything ongoing, but continue to welcome their conversations. And as we've talked about within the FDA in the past, feel very strongly that they play an important role in the safety of consumers and are happy to be working with them to figure out the areas of concern. On the pipeline side, when you look at the weight loss category specific, I think there's an accelerating amount of treatments that are going to be coming to market that are on the branded side of the business. So this is next-gen biotech that are in Phase II and Phase III as some of the larger players.

And so I do think consumer sentiment and consumer demand is going to continuously change. You see that in the last few years from when these drugs first came to market, with the launch of Zepbound vials, you see traffic dynamics moving pretty materially when you look under the hood. I think that's just going to be the evolution of this category where you're going to have more and more options, they're going to be different price points, they're going to have different side effect profiles. They're going to be known by different providers. And ultimately, I think for us, as we've said, across all of our categories, we've seen breadth really matter.

And so I do think we'll continue to evolve our platform, evolve our relationships and our approach to make sure that what we have on the platform is what people want. I don't think we are stuck in any single way. I think we have prioritize the consumer up until this point for what we think is best for them and what they are looking for and what they want. And as that changes, we'll continue to change with them.

That concludes the question-and-answer session. Ladies and gentlemen, this concludes the Hims & Hers Fourth Quarter 2025 Earnings Call. Thank you all for joining. You may now disconnect.

Thank you for standing by. My name is Eric, and I will be your conference operator today. At this time, I would like to welcome everyone to the Hims & Hers Third Quarter 2025 Earnings Call. [Operator Instructions]

I would now like to turn the call over to Bill Newby, Head of Investor Relations. Please go ahead.

Good afternoon, everyone, and welcome to the Hims & Hers Health Third Quarter 2021 Earnings Call. Today, after the market closed, we released this quarter's shareholder letter, a copy of which you can find on our website at investors.hims.com.

On the call with me today is Andrew Dudum, our Co-Founder and Chief Executive Officer; and Yemi Okupe, our Chief Financial Officer.

Before I hand it over to Andrew, I do remind you of legal safe harbor and cautionary declarations. Certain statements and projections of future results made in this presentation constitute forward-looking statements that are based on among other things, our current market, competitors and regulatory expectations and are subject to risks and uncertainties that could cause actual results to vary materially.

We take no obligation to update publicly any forward-looking statements after this call, whether as a result of new information, future events, changes in assumptions or otherwise. The risks, uncertainties and other factors that could cause actual results to differ from our forward-looking statements are described in our earnings release and SEC filings. Please see our recent earnings release and recently filed 10-K and 10-Q reports for a discussion of these risk factors as it relate to forward-looking statements.

In today's presentation, we also have certain non-GAAP financial measures. We refer you to the reconciliation tables to the most directly comparable GAAP financial measures contained in today's press release and shareholder letter. You can find this information as well as a link to today's webcast at investors.hims.com. After the call, this webcast will be archived on the website for 12 months.

And with that, I will turn the call over to Andrew.

Thanks, Bill. The third quarter was another strong step forward for Hims & Hers. Our strategy is working. We're expanding reach, deepening engagement and transforming how people experience health care. And the most exciting part is that this growing scale is making the entire experience better for our subscribers.

Hims & Hers is one of the few health care platforms where each customer engagement improve the overall experience. Scale doesn't just make us bigger, it makes us better. The learnings from each encounter position us to drive better experiences, stronger customer relationships and wider accessibility.

Personalized care sits at the center of this evolution. Our growing scale means more people have access to treatment plans that can adapt to their unique needs, biology and goals by incorporating a variety of factors, dosing regimens and multi-condition solutions. Our consistent focus on democratizing access to these types of experiences continues to deliver meaningful results for our business.

At the end of the quarter, subscribers using personalized solutions grew 50% year-over-year, helping drive nearly 50% in year-over-year revenue growth.

Over the past few years, how we serve our customers has evolved in extraordinary ways. We started by helping people access simple, effective treatments for a narrow set of conditions. Then we expanded into personalized multi-condition care, giving customers a single place to manage a wide variety of health challenges with solutions tailored to them.

Now looking ahead, we plan to go beyond helping people treat their existing conditions and start helping them proactively manage their health before conditions even materialize.

As we continue building a platform that unlocks broader access to care that's personal, proactive and connected, we expect that broader collaboration will become key, whether that's through partnerships, investments or joint innovation, we see enormous potential to work alongside others across the health care ecosystem to make this future a reality.

As we noted in our earnings release, we are in active discussions with Novo Nordisk to make Wegovy injections and once FDA approved, Novo's oral Wegovy available through our platform to continue advancing consumer options.

Earlier in the quarter, we announced a partnership with Marius Pharmaceuticals, which will allow our customers to access one of the few FDA-approved oral testosterone treatments in 2026. We expect these solutions combined with consistent provider support and the ability to seamlessly track hormone levels via the Hims app can help redefine how millions of men access effective hormonal care.

And most recently, we made a strategic investment in GRAIL, the company behind what we believe is the most advanced multi-cancer early detection test on the market. We are proud to invest in a company that shares our vision for the future. These relationships underscore the potential of what we've been building. They reflect our ongoing commitment to making our platform a powerful curator of the best-in-class health and wellness solutions.

Over time, we plan to pursue a mix of strategic investments partnerships and collaborations in order to build a single destination where customers can access a range of innovative offerings alongside those personal, convenient care available. These recent developments are an exciting glimpse into a future where access to proactive preventative care is not a privilege but a standard.

I've never been more excited about where this company is heading. When we initially shared our 2030 goals earlier this year of more than $6.5 billion in revenue and $1.3 billion in adjusted EBITDA, it was with this clear vision in mind. Today, we're delivering against that vision in a real way. The opportunity to accelerate our trajectory are materializing quicker than anticipated, and we are leaning in.

Let's start with weight loss, which remains one of the most important global health challenges impacting nearly 1 billion adults around the world. Since launching the specialty nearly 2 years ago, we've shown that combining reliable access to effective medication with a best-in-class experience has the potential to change lives.

We believe that customers are best supported when they have access to data-driven provider recommendations, ongoing clinical guidance and easy-to-use digital tools that track progress. The foundation behind our continued growth will be the ongoing verticalization of our compounded infrastructure. We believe investments in these facilities are establishing a new gold standard for compounding infrastructure broadly, positioning us to accelerate growth while maintaining the high standards of safety, quality and affordability our customers are accustomed to.

Importantly, this means all active pharmaceutical ingredients in compounded treatments are sourced from FDA-registered facilities, and in cases such as semaglutide, for which the FDA recently established a green list of GLP-1 API suppliers resourced solely from the suppliers.

As our scale has grown, we've also shown a consistent track record of translating that growth into greater efficiency. This track record and ongoing efforts to verticalize our sterile compounding operations support our ongoing pursuit to make GLP-1 offerings increasingly accessible.

Recently, we strategically reduced prices across compounded GLP-1 treatment plans by as much as 20%, extending accessible care to an even broader population.

In the quarters ahead, we'll also continue expanding the breadth of options accessible through our platform. Our technology and vertically integrated infrastructure are unlocking new levels of personalization, most recently with the addition of microdosing options for compounded semaglutide treatments. It's allowing us to deliver what we believe is the most high touch patient-centric experience in the market.

And as we help more customers find the right treatment and support providers in evolving patient care, we're continuing to strengthen that leadership position. Put simply, we're making it easier for more customers to start, stay on and succeed in their own weight loss journey, and we're confident that we'll continue to drive results for a growing set of customers by doing so.

We're also extending the benefits of our consumer-centric approach to new specialties. We believe recent launches supporting low testosterone and menopause unlock significant long-term growth opportunities and increase our ability to deepen relationships with existing subscribers while expanding access to care for millions more.

The current state of hormone health care in the U.S. reflects the exact challenge Hims & Hers was designed for, conditions that impact millions, available treatment options that can make a real difference and a system that still makes access far too hard. We're changing that.

Millions of men experience symptoms of low testosterone but face stigma, confusion or limited access to effective care. Our recent launch aims to address these issues with access to personalized provider guided treatment plans supported by at-home lab testing. While still early, the responses launch has already indicated an immediate product market fit, and we're actively optimizing both the experience and the operational engine behind this offering to meet the strong demand.

Through our parimenopause and menopause offering, we're addressing one of the biggest gaps in women's health, nearly 1.3 million women in the U.S. enter menopause each year, yet only 30% of OB/GYN residency programs offer formal training on how to treat it. Our new Hers offering helps close this gap by providing access to personalized care and support designed specifically for women during this stage of life. We expect this offering to become a meaningful growth driver as the Hers brand reaches more women and scales towards $1 billion in annual revenue in 2026.

Together, these launches expand our reach across life stages and conditions. And more importantly, they lay the groundwork for the next era, where Hims & Hers can change the status quo for millions of customers, proactive health and diagnostics.

We plan to launch comprehensive whole body lab testing before year-end, which will represent a significant step forward in this evolution. By scaling capabilities like blood testing, we're thrilled to help more customers affordably access the insights they need to monitor, maintain and improve their overall health. We envision these capabilities empowering consumers to proactively address health concerns such as vitamin deficiencies, unoptimized hormonal levels and genetic risk factors, while also identifying early indicators of more serious conditions like cancer and cardiovascular disease.

Historically, people have come to us to manage existing conditions, soon will help them take a more proactive role in managing their health. And in doing so, can potentially impact millions of lives. Our goal is to one day help identify and manage risks associated with heart disease, metabolic disorders, neurodegenerative diseases and cancer, long before symptoms appear.

We believe our platform is uniquely positioned to make this possible. We have the lab-testing capabilities to give customers and providers deeper health insights. We have the provider network and compounding infrastructure in place to help take action against those insights and we have a strengthening data feedback loop that can help measure, adapt and refine care at scale.

We believe that combination positions Hims & Hers to do a few others in health care can, turn data into tailored action for millions of people. These capabilities alongside our California-based peptide manufacturing facility, which is actively onshoring R&D for core peptide applications form the foundation of the longevity specialty we plan to launch in 2026. We plan to scale the specialty to feature a broad range of therapies in addition to our new testing options. Over time, we expect these will include peptides, coenzymes, GLP and GIP treatments designed to improve performance, recovery in cardiometabolic longevity markers.

Each of these initiatives are part of a broader effort to make advanced diagnostics and the care that follows more accessible. Through investments and when appropriate partnerships, we expect this type of care, which has historically been acceptable only to a small affluent subset of the population available to each of our customers.

Finally, our success in the U.S. and U.K. gives us a real conviction that our model can scale globally. We believe that this team, vision and balance sheet we have in place are uniquely positioned to scale a leading consumer health platform globally.

In Europe, our acquisition of ZAVA Global gives us the infrastructure to serve customers across the U.K., Germany, France, Ireland and Spain. We're now reaching a total addressable market of more than 200 million adults across these regions, and the early response continues to validate how naturally our model translates.

Next, we're preparing to launch in Canada in the near future, notably expanding our North America presence. With 2/3 of Canadian adults overweight or living with obesity, we're incredibly excited about this opportunity to make high-touch care more accessible.

We are in active discussions with leading generic manufacturers to ensure that once semaglutide becomes available in generic form in 2026, we are ready to deliver access through our platform.

Looking ahead, we see international markets as a powerful long-term growth opportunity, representing more than $1 billion in potential annual revenue. We're deploying meaningful capital to bring the Hims & Hers experience to more customers across the U.K. and broader European markets, where we see a significant opportunity to scale our model and deepen our presence.

We believe Hims & Hers will soon become the largest global consumer health platform, unlocking access to direct-to-consumer personalized care for more customers than any company in the world. This approach extends across our entire business. The runway for growth and the opportunities to drive accelerating adoption across a wide range of conditions and health concerns are clear.

We'll keep investing in what matters most expanding our reach, deepening engagement and broadening our capabilities, allowing customers to manage and improve their health on one single platform. Since founding this company, I've never been more excited than I am right now. The future of health care is ours to build and we are building it piece by piece.

With that, I'll pass it over to Yemi to talk through our financial performance and updated outlook for 2025.

Thanks, Andrew. I'll start by providing an overview of our third quarter financial results before going deeper into our final outlook for 2025.

In the third quarter, our commitment to doing more for our customers drove another period of exceptional growth and expansion. By consistently introducing new innovative offerings and broadening the range of specialties we support, we're systematically increasing the number of individuals we are able to reach and help. This growing breadth of care anchored in a precision medicine-based approach is enabling us to reach customers at multiple points throughout their health care journey and evolve with them as their needs change.

During the third quarter, revenue grew 49% year-over-year to nearly $600 million, while adjusted EBITDA margins were above 13%.

In the third quarter, our subscriber base increased sequentially by more than 30,000, reflecting a year-over-year growth rate of 20%.

We see the formation of a robust foundation of multiyear growth levers across 3 key areas of our portfolio, offerings under our Hims brand in the U.S., offerings under our Hers brand in the U.S. and an expanding portfolio of international markets.

Within our Hims brand, we are making a deliberate effort to transition away from generic on-demand sexual health solutions towards more personalized daily treatment offerings that allow providers to address a wider spectrum of needs. Excluding the impact of the current sexual health transition, subscribers in the third quarter grew north of 40% year-over-year. Our expectation is that the effects of this transition will meaningfully dissipate in the second half of next year.

We believe that these dynamics in conjunction, with the launch of new offerings such as testosterone, will result in accelerating growth in the second half of 2026 within our Hims portfolio.

Switching to Hers. We've seen the collective offerings on our Hers brand grow near or above triple digits for the last several years, and are now on pace to deliver revenue of over $1 billion in 2026. We expect the addition of new specialties such as menopause, diagnostics and longevity to continue driving strong growth across the Hers portfolio.

Before going deeper in the investments we are making to drive growth across our strategic areas, I'll provide an overview of profitability dynamics. During the third quarter, adjusted EBIT grew more than 50% year-over-year to $78 million, offering another strong proof point of our team's ability to execute with discipline and deliver results consistent within our capital allocation framework.

Adjusted EBITDA margins increased relative to the prior year, a significant leverage on our marketing spend, more than offset higher costs, and we continue to benefit from investments that are enabling us to scale new specialties, expand our global footprint and further elevate the talent across the organization.

In particular, we're making meaningful investments in talent across our technology organization as we build out the team and infrastructure that will power our next phase of expansion.

Marketing as a percentage of revenue was 39%, representing more than 6 points of leverage year-over-year. We continue to see acquisition gains through lower-cost and nonpaid channels, benefits from higher retention as more subscribers benefit from personalized offerings and a more stable backdrop within our weight loss offering. Each of these factors has resulted in leverage from revenue growth outpacing marketing and investment.

Gross margins declined over 2 points quarter-over-quarter to 74% as tailwinds from continued growth in non-weight specialties were offset by lower intra-quarter revenue recognized per shipment from certain weight loss offerings due to shorter shipping cadences.

G&A costs were also pressured as a result of the ZAVA integration as well as additional expenses related to the hiring of new leadership talent. G&A as a percentage of revenue increased 2 points year-over-year. A similar dynamic was seen in operations and support costs.

Technology and development costs as a percentage of revenue increased nearly 2 points year-over-year to 7%, reflecting ongoing investment in engineering and product talent across the organization. We expect to continue investing in this area over the coming quarters as these initiatives enhance the customer experience and drive long-term financial returns. We believe these investments will pay back over the mid- to long term in the form of reduced costs from greater efficiency, but more importantly, through unlocking new growth factors for the company in the future.

Our priority center around long-term free cash flow generation and each of the investments we are making today set the foundation for greater free cash flow generation in the future.

In the third quarter, cash flow from operations was $149 million, which translated into free cash flow of $79 million. At quarter end, we had over $1.1 billion of cash, short-term and long-term investments, of which $630 million was held in cash and short-term investments. The strength of our cash flow and balance sheet places us in a unique position to strategically deploy capital to expand both organically as well as the strategic M&A opportunities. We believe this to be a meaningful differentiator and opportunity to cement our leadership position as we do not believe that there is a peer in our space that has the resources and expertise to do the same.

Similar to prior quarters, we expect to invest across the following areas. First is continued verticalization and expansion of personalized capabilities within our facilities. In the coming quarters, we expect our operational footprint and capabilities to continue to expand.

We entered the year with a facility footprint of just under 400,000 square feet and expect to leave the year with a footprint north of $1 million. This will enable us to unlock additional form factors like gummies across a broader set of specialties, increased capacity for fulfillment and sterile offerings as well as leverage insights from diagnostic capabilities to have an even more comprehensive set of multi-condition offerings.

While we expect to see retention and acquisition benefits across each of our specialties, this will be a particularly important component with respect to one, broadening the appeal of our sexual health offering, while we transition from on-demand offerings, daily solutions; and two, leveraging verticalization to make higher complexity offerings, inclusive of our weight loss and testosterone solutions, more affordable with minimal long-term margin sacrifices.

Second, we plan to continue expanding the breadth of solutions and enhancing the customer experience across our new specialties. In the third quarter, we were pleased to launch our low-testosterone offering and have already seen strong interest from our current subscriber base.

In the fourth quarter, we have launched solutions for perimenopause and menopause support and plan to launch comprehensive lab testing diagnostics, both of which we believe will be meaningful accelerant to the business. We expect continued investments in our facilities will enable us to broaden solutions within these specialties as well as reduce cost of verticalization.

Third, we continue to see strategic investments, partnerships and collaborations as powerful tools to extend our impact and advance our mission. Our recent investment in GRAIL exemplifies this approach. Through these initiatives, we see real opportunity to leverage our balance sheet to strengthen relationships across the broader health care ecosystem. Over time, these efforts can make new and innovative development in health care more accessible to a broader portion of the population.

Fourth, we expect to make meaningful investments in the capabilities of our technology platform. We believe the breadth of data on our platform and its utility value in helping our subscribers optimize their health will meaningfully increase with the launch of deeper diagnostic testing from our offerings. This can come in the form of data-driven treatment recommendations, chatbots to enable faster nonclinical customer solutions or AI-assisted tools such as nutritional coaches. We are already seeing early wins and look forward to bringing deeper updates on this front in the future.

Lastly, our mission to help the world feel great for the power of better health does not have borders. Success in the U.K. was a catalyst in our expansion into Germany, France, Ireland and Spain for ZAVA acquisition, and soon, we will add Canada to that list.

The strength of our balance sheet and the considerable cash flow profile we built in the U.S. position us to deploy capital into these more nascent markets in a disciplined way. Additionally, we expect to meaningfully scale our operations in the U.K. with more investment in expanded capabilities and reinforcement of our brand given signals around the significant opportunity that we see.

Further refinement of our playbook unlocks our potential to expand in Brazil, Australia and other Latin American and Asian markets in the future.

Hims & Hers is undergoing another significant evolution on multiple fronts: technology, new capabilities, new specialties as well as expanding geographical coverage. One of the most exciting shifts will come from what our upcoming launch of comprehensive whole body diagnostic testing will bring.

Currently, consumers come to our platform seeking a solution for a known condition that they want help with. With deeper diagnostics, we believe we'll be able to orient toward a model that allows subscribers to proactively manage their health and pursuit of healthier and longer lives. This will enable us to attract a broader set of consumers as well as deepen engagement with our current subscribers.

Over the coming quarters, we expect to elevate investment to unlock capabilities to improve the experience we bring to current and future subscribers. Investment will be focused on accelerating adoption in new specialties, enhancing our technical talent to build a next-generation technology platform and cementing our leadership position by delivering greater value to our subscribers.

Our capital allocation framework will remain in place. And we believe similar to past investment periods, we will realize a meaningful return on these investments in the future.

With that, I'll double click into our outlook for the remainder of the year. In the fourth quarter, we expect revenue to be between $605 million to $625 million, representing a year-over-year growth rate of between 26% and 30%. We are anticipating adjusted EBITDA in the range of $55 million to $65 million, reflecting a 10% margin at the midpoint.

For the full year, we expect revenue to be between $2.335 billion and $2.355 billion, reflecting a year-over-year increase that ranges from 58% to 59%. We are anticipating adjusted EBITDA in the range of $307 million to $317 million, reflecting a 13% margin at the midpoint.

Behind our outlook are the following assumptions: First, we expect the migration fulfillment for sterile weight loss products to 503(a) facilities to drive between $20 million to $25 million of headwinds in the fourth quarter from shorter shipment cadences that result in less revenue recognized per shipment. This dynamic will normalize in the second half of 2026 as the cohorts of customers refilling their orders accumulate.

We are making meaningful investments to expand our internal 503(a) sterile fulfillment capacity. Progress on this front gave us conviction to make GLP-1s more accessible through lowering the price points for our 3-month, 4-month and 6-month offerings in the fourth quarter. This is expected to come with near-term margin headwinds that will normalize in the second half of next year as we continue to progress with the verticalization of our sterile fulfillment capabilities.

Second, we continue to expect at least $50 million of incremental revenue from ZAVA in the second half of the year. Since closing the acquisition in July, momentum has been strong, and we're actively deploying resources in our proven consumer-centric playbook to capture the significant market opportunities we see across Europe.

Lastly, we expect a continued moderation in our on-demand sexual health business to persist in the near term. So these headwinds should begin to ease in 2026 as daily sexual health subscribers and multi-condition treatment plans become a larger share of the mix.

The ongoing shift for personalized offerings remains a key driver of long-term revenue retention, supporting our target of 85% or higher, positioning the business for more durable recurring growth over time.

As Andrew mentioned, we're excited to be in a position where we can confidently invest in the long-term trajectory of our business. We expect these investments to start in the fourth quarter and continue through 2026 as we scale new categories to a larger presence in new markets, and begin driving greater value to subscribers through innovative partnerships. While this may result in a temporary pause in the year-over-year margin expansion, we believe these investments will meaningfully extend the reach of our platform around the world.

With the immense opportunity in front of us, our conviction remains high in our ability to meet or exceed the 2030 targets we established earlier this year, at least $6.5 billion in revenue and $1.3 billion in adjusted EBITDA. Our success would not be possible without the significant efforts of Hims & Hers employees around the world. I'd like to thank them, our subscribers and our shareholders for supporting us in our mission to help the world through the power of better health.

With that, I'll turn it back to Bill to kick off Q&A with 2 questions from our retail investor community.

Thanks, Yemi, and thank you to all the investors for sending questions over the weekend. We received a number of questions on the upcoming launches of lab testing and our longevity offering. This one comes from Nick G. What is the time line to release a full stack subscription service that includes at-home testing and additional products and services like peptides and a broader longevity offering? What are the biggest hurdles to this type of rollout?

Yes. Thanks, Nick, for that question. Great question. We are extremely excited about both of those 2 categories. As we shared in the prepared remarks, we will be launching the whole buy lab testing on the platform of very soon before the year-end. I think this is a really exciting one for me personally. I mean this is a set of tests that historically cost me and my family upwards of anywhere from $5,000 to $10,000 for this type of comprehensive testing, and we'll be bringing it to market for an absolute fraction of that cost. So really an incredibly powerful opportunity for true equalization for anybody out there to be able to get a sense of where their body is at, where their family is standing and the people that they love making sure that they're getting ahead of any issues that they're aware of.

I think this testing lays the foundation for the longevity specialty that we mentioned, which, again, is a really exciting new category. This specialty will be coming to market in 2026, and will include a really wide range of treatments from on-market peptides, coenzymes, GLP, GIP treatments. All of them will be designed and blended with performance recovery, cardiometabolic longevity markers as the core optimization of choice. So this is a category that is again leading the charge on health and wellness. It's something that very few have access to today. And I think the great equalization and bringing this to more people is going to be something that's going to be incredibly powerful.

In that category, we're also hopeful that the current administration can help further expand access to more of these peptides. I think there's a growing list of them from BPC 157 and TB 500 and others where research is starting to show real health and longevity benefits. And I think expanded care there is just going to be great for customers.

I think the other advantage we have in this category, which is an exciting one as you all remember, we acquired the California-based peptide manufacturing plant. And that facility is up running, operating and currently onshoring a lot of R&D that I think is going to be very important for the vast range of options on the peptide side that will be a part of this future category.

Thanks, Andrew. The next question comes from the inhouse community and focuses on some of the trends we're seeing in our longer-tenured businesses. The question is, earlier this year, you indicated the core business was meeting or exceeding expectations. It's now clear that we've started to see some growth acceleration in a few of these places. How confident are you that you'll be able to reaccelerate core growth over the coming quarters? And what specific levers can you pull? And what's the realistic time line to see in these results?

Yes. Thanks for the question. I think what we see is we see the world rapidly evolving with new specialties and we see the specialties more and more becoming a blend of one another. I think as we look at some of the new capabilities that we'll have later this year, such as diagnostics, I think that's only going to further accelerate. And so we increasingly see each of the components that we outlined and Andrew laid out and the vision for where the company is going to in the future is really becoming part of the core offering. And so we spoke around this a little bit in the prepared remarks. But we increasingly look at the business across a few strategic areas.

The first is Hims U.S., next is our Hers U.S. business. And finally, we see a great deal of opportunity in the international markets. As we look around just the scale and the footprint of opportunities, which in each of those strategic areas, we see several growth factors that have the ability to not only continue to drive strong growth, but potentially accelerate in the second half. To being new specialties such as testosterone, the Hims brand or menopause and longevity in the Hers brand, as we also start to shift towards being able to proactively help consumers manage their care with lab diagnostics. I think these trends are only going to accelerate. We spoke about some of the near-term headwinds that we're seeing this year with respect to the shift towards the daily sexual health consumers and away from the on-demand sexual health users as well as some of the dynamics around the shorter weight loss cadences.

As we start to turn the corner around those in the second half of the year, we remain very confident that we'll see both the Hims & Hers businesses, not only remain strong growth drivers but also potentially accelerate growth in the future.

Thanks, Yemi, and thanks again to everyone who's sending questions. With that, I will pass it back to the operator to begin the regular way analyst Q&A.

[Operator Instructions] Your first question comes from the line of Justin Patterson at KeyBanc Capital Markets.

Great. Andrew, as diagnostic capabilities ramp up, how do you envision the pace in which you provide personalized treatments and expand in the new specialties changes? And then related to that, how much you adjust your marketing efforts to make more consumers aware of just this expanded offering?

Yes. Great question, Justin. I think it's going to rapidly accelerate the pace of bringing products to market. When you can understand everything from nutrient deficiencies to pre kind of genetic risk markers your ability to adapt the assortment and SKU and hyper-personalized just accelerates. And so we shared in the prepared remarks that by year-end will be north of 1 million square feet of infrastructure and have really built what I think is gold standard and true high-quality compounding capabilities. My hope is that the diagnosis to open up a real floodgate of opportunity for hyperpersonalization.

On the marketing side, I think it's a really big change, which is a really exciting one. I think historically, the business has been very much direct to marketing focus, given the very stabitized conditions that we offer, right, things like hair loss, sexual health, et cetera. When you start getting into diagnostics, when you start digging in the longevity, whole body health, wellness, these are categories that you want to talk about, other categories that you want to share with the people you love, right? The carriers you want to share with your family. There are products within this offering that I personally have been buying for my family for years because I just want my loved ones that have access to them.

So I do think there's going to be a really structural change in how you see the Hims & Hers brand show up, the types of messaging that is going to be going out there. I think this ultimately allows for great long-term leverage in the business, which is really exciting, but also just can really transform how people know our business to be, right? Instead of coming just for acute issues, I think there's an opportunity here to build a platform globally where not only tens of millions but hundreds of millions of people can rely on you to help get ahead of help, and help get proactive with health. And I think you're really going to see that show up in the transformation of the brand and the types of messaging and the types of places that we're showing up.

The next question comes from the line of Maria Ripps with Canaccord Genuity.

I just wanted to ask about sort of your approach to the portfolio of GLP-1 solutions on the platform, especially if the Novo partnership moves forward? And I guess, are there any other GLP-1 solutions that you may add sort of to the specialty?

And then secondly, can you maybe talk about sort of consumer price sensitivity to compound the GLT-1 at this point? And how do you sort of price reductions impacting demand?

Yes. Thanks, Maria, great question. I'll talk to the first part, maybe Yemi jump in a second. Generally, I think breadth and assortment and choice for patients is the winning formula. So we're excited to be able to reengage with Novo about what going to be pill that is hopefully to be FDA approved as well as the commercial dosing. I say they and others will have more and more innovation coming. There's also obviously advancements in biotech that are in Phase II and Phase III trials that have next-generation GLP-1, GIP dual and triagonist opportunities. So our stance is that breadth and assortment and choice ultimately gives each individual more personalized abilities to just have great outcomes.

And so you'll see us continue to pursue a wide range of treatments here. I think generally, it's inevitable that partnerships like this where we are the largest consumer distribution platform in health care and others are the best in bringing new therapeutic innovations to market, those types of companies should be working together ultimately. So I think you're going to see more of that in the ecosystem, but it's definitely something that we have a lot of brain power on and are making sure that as advancements in the next generation comes we have great relationships with the teams and they understand the opportunities that we can have together.

Yes. And then I hit the second part of your question, Maria. I think our weight loss specialty follows a very similar principle that we deployed across our historical specialties. And then around scaling verticalize and then optimizing then passing the value and the savings back to our subscribers. And so we do see across both our weight loss specialty inclusive of the orals as low GLP-1s is the high-touch model that we have with the providers really is resonating with our subscribers. We see strong retention across the platform.

Our view that as we sort of other specialties that we've done with in the past, as we're able to make the price points more accessible to a broader base of users, that will enable us to continue to draw on a broader audience. And so we see some very early promising signs with some of the recent changes that we've made. We're excited to continue to invest to verticalize operations at a high-quality standard to continue to pass those benefits back to our subscribers.

The next question comes from the line of Craig Hettenbach with Morgan Stanley.

First question is just on the Hers business and the color of kind of approaching $1 billion in revenue in 2026. Can you just touch on just the cadence of the new menopause products like how much that may move the needle or do you expect kind of the growth to be driven mainly by the existing products going into 2026?

Yes, I can speak a little bit to that, Craig, and Yemi feel free to jump in. I think Hers is a really nice range of growth drivers. We talked about in the last couple of quarters, that growth rate being triple digits or around there. And I think there's a real path over the next few years for it to maintain that type of trajectory. You've got legacy categories "legacy" that are a few years old on the dermatology side, that are still growing extremely quickly. You've got obviously the oral waste business, the personalized weight business on the GLP side that is growing very robustly.

And then I think these new categories in metal health, permimenopause as well as longevity and diagnostics are going to be very, very important for women and this demographic. So it's a business line that I think has 4 or 5 different growth engines. It's probably one of the more exciting parts for me of the business just because you're able to see the platform extend to completely new audiences, different ages, different demographics and completely new therapeutic categories, but it's one where there's real diversity coming from the composition of that growth.

Yes. I'll just to add a couple of things to that, Craig. I think what we also see as the Hers platform has scaled our ability to invest in the brands distinctly continues to increasingly elevate. So now with the broader set of portfolio that we have across things like mental health, the medicals support, hair, weight soon to be diagnostic. I think similar to what we saw with him that just gives us a broader spectrum with which to speak to our consumer base and capture them early in their journey.

We also see, as Andrew mentioned, diagnostics as being a key evolution point for the company that will benefit both the Hims business and Hers business. I think that will enable us to proactively help consumers manage their care. And so while we're very excited by that business on a stand-alone basis, its ability to also highlight new specialties that we should be entering or personalize the treatments in a more precise fashion, I think will not only increase retention, but also broaden the subscriber base that we're able to reach not only within the Hers business, but also the HIms business as well.

Great. And then just as my follow-up, Yemi appreciate the color on the investments you're making in the business. You kind of alluded to a temporary pause in margins. Is it possible margins could contract year-over-year in 2026 before you see the follow-through? Or do you think despite these investments, should kind of hold ground on margins into next year?

Yes. I think it's a bit too early to give specific color around 2026. The teams are actively undergoing the plans. I think we're following a similar investment thesis to what we deployed the past somewhere in 2023, where we lean into investment. Within a couple of quarters, we started to see rapid margin expansion. I didn't hear we have a much broader set of levers. And I think what also just gives us the conviction in these investments, they will be accretive. Some of them will be in new capabilities, in new specialties. I think we have a broad set of options to verticalize and optimize the unit economics on some of those new specialties that gives a great deal of confidence.

I think we're also investing in things like talent that tend to have a exponential and asymmetric ROI. As those folks come in and start to really just change the capabilities and the trajectory for what our technology platform can do, we see a significant amount of upside. And so I think we're -- it's a little bit too early to give you specifics around 2026 guidance, but we do see an immense opportunity not just for future growth levers, but for continued free cash flow generation as well as in the midterm expensive margin expansion that we've seen in prior quarters as well.

Your next question comes from the line of Brian Tanquilut with Jefferies.

Congrats on the quarter. Maybe just on the topic of cash flows, I mean, buybacks were kind of strong in the quarter. Just curious how you're thinking about capital deployment towards buybacks versus obviously, you're spending a good amount of capital and CapEx?

Yes. I think we have the luxury of very strong free operating cash flow as well as a very strong cash, cash position. I think similar to prior quarters, any time we review that there is a meaningful disconnect in the valuation of the company, the market value relative to intrinsic value, we will step in and act. And so I think in the prior quarter, we did see those dynamics take play with some of the volatility that we saw on our stock. So we opted to lean in.

That said, I think the first and foremost priority will always be around investing in the appropriate levers to grow the business. That includes, if we talked to on early in the prepared remarks, extending the asset of personalized capabilities that we have to offer our patients, investing in the overall platform as well as in international markets. But I think we just have the luxury of a very strong balance sheet and very strong cash flow. We're able to do all of those things while at the same time, realize disconnects between the intrinsic value and the market value and

Got it. And then I guess my follow-up, as I think about -- obviously, in the press release, you talked about the negotiations with Novo. As we think about your decision to bring down price on your GLPs in those conversations. I'm just curious, what are the negotiating points? What are the discussion topics that are kind of holding that agreement back right now? Or what will it take to get it over the line? And then maybe just thinking about what the pros and cons are for rolling out a Novo product here, both for you and maybe for Novo?

Brian, I can probably answer that and for better not give you too much information, but there's probably not much we can share on the specific conversations that have been going with Novo, I think we're excited to be engaging with them. And I think Mike is a great new leader for the organization. Generally, like I said, we believe and have always said breadth of options for patients is best.

We're a platform where we hope to give people the absolute right course of treatment, the right course of care and connect them with providers that can help them make those decisions. And so from our perspective, we are constantly engaging with great innovative therapeutics, great innovative diagnostic companies, et cetera, next-gen biotech companies because we just want to make sure that, that Hims & Hers truly does represent the must-have in health care over time. And ultimately, our job is to fight on behalf of every people to to hopefully bring that to them at a price that is truly affordable to them in our family.

Your next question comes from the line of Eric Percher with Nephron Research.

I'd like to check in on weight loss growth components versus your initial expectations for the year, ask if you're still on path for $725 million for the year or better and a little bit of context on how the compound versus oral market has developed?

Thanks for the question, Eric. Yes, I think the short answer is we see continued strength across each component of the weight loss specialty. The oral business continues to remain robust and grow healthy rates. A lot of that is driven by the fact that there's broader eligibility requirements for offering as well as there's the ability to reach a broader audience of people that may be apprehensive around injectables. They're also at a price point where users are able to access them at a lower price but still realize over half of the benefits that they're able to see on the injectable side. We also continue to see the GLP-1 offer remains strong as well. And so we are on pace to achieve the $725 million or greater target that we put for earlier this year.

And on the personalized compounded side, you provided us with $20 million to $25 million headwind. Was that I cast that as 4Q? And could you just kind of speak to the cadence as you off-boarded the commercial doses into 2Q to 3Q to 4Q, help us a little bit there.

Yes. So I think a lot of the drop that you saw earlier this year between the first quarter and the second quarter, that was primarily the result of offboarding the commercially available dosages but subscribers are on. I think as we look to what's going to transpire over the next couple of quarters, what's effectively occurred as we started to ship the GLP-1s in smaller shipments. The net effect of that is we recognize our revenue on when shipments occur, not necessarily when the consumers place their orders. So we continue to see very strong order velocity, but because we're shipping in smaller cadences, that's effectively what's driving the headwind in the back half of this year that you see that that we expect will materialize in the $20 million to $25 million headwind.

Now what happens is as those consumers renew because they're on a smaller or shorter cadence as they renew, they renew more frequently throughout the year. And so what happens is you see a stacking of cohorts that kind of compound each quarter. So our expectation is by the time we get to the back half of next year, this dynamic will normalize. And so it's less around internal dynamics around the business. And it's more around just like the adjustments of the shipping profile is profile that we have for our subscribers.

Your next question comes from the line of Ryan MacDonald.

Great. Andrew, I want to start on international dynamics. You've got ZAVA, obviously, under your belt now for about a quarter. I'm just curious, as you've gotten more comfortable and familiar with that business and started to spend more time international markets of how much is the sort of Hims messaging and approach resonating outside of the U.S. market? And how is that informing sort of this international expansion plan?

And as you think about these markets, it sounds like there's some pretty aggressive expansion. I feel like there's some a unique aspect within each country that sort of changes the dynamics of how care is provided, how do you -- and what investments do you need to make to sort of scale your network of clinicians as you continue to broaden your reach and internationally?

Yes. Thanks, Ryan. It's a great question. Yes, I think ZAVA been a wonderful first buy into the international space, an immediately accretive acquisition, just great team, great operational capabilities and incredible learnings. They've already moved through quite a few markets already, which has been really fun to watch.

I think probably the best takeaway so far is that we think the demand is the same as here in the U.S., whether it's a national system, insurance-based system, it kind of doesn't matter. I mean I think the global frustration with access to great health care is consistent wherever you live. The time it takes to meet with specialists, the quality of the care, the high-touch nature of the care, the personalized aspects of that care, the cost of that care, I mean, it's really, really quite consistent.

And so we are, I think, given that as well as given, I think, our confidence in what we believe is a really scalable operating model here in the U.S., like I think we've -- over the last 8 years, optimize what we think is the winning formula, the winning experience for customers. I think we are now accelerating our ability to bring that into very key markets.

And so as we shared Canada will be going live in the near future. We're already in great conversations with all the major generic manufacturers up there in anticipation of the generic semaglutide, which goes live in 2026. We believe the Brazilian market is a really interesting market, where we'll be spending time further deepening investments in the U.K. likely as well as other smaller markets in Australia and Japan, et cetera.

So generally, I think we have a really good graph of the competitive landscape in these markets, the consumer distinctions, the local dynamics to be aware of, the regulatory differences to be aware of. And so the experience might be slightly different. And each to your point, there might be nuances in positioning or in marketing or offering. But generally, I think the frustration with care and the demand for a higher-touch consumer-centric care is very much widespread. And I think we have the team and the ambition and maybe the crazy, just a little bit of craziness in us, right, to go and attack this and be the winner quite quickly across all of these major markets.

I'll put color there. Really appreciate it. Maybe from a follow-up perspective, I wanted to ask on sort of whole body lab testing and how that might be structured or packaged or integrated within some of the other offerings like menopausal health, longevity into next year. Unless we're mistaken I think that what we've seen in our experience on sort of the whole body testing market, especially in the cost-efficient manner for the consumer, is it might -- it can tend to be a bit lower margin business from a gross margin perspective.

So one, is that what you're seeing? Or is that a risk from launching a stand-alone whole body lab testing offering? Or if so, how are you going to package it with maybe more longitudinal offerings on the Hims platform to sort of enable that sort of, let's call it, strong LTV to CAC as we think about over the next year or 2?

Yes, a great question, Ryan. I think the -- I think we're really unique company in our ability to bring at-home lab testing or lab testing to the masses because our business is helping people be healthier, right? So we do not, long term, need to make huge margin off of these tests, which is distinctly different from everybody in market, a distinctly different from major lab testing companies, other competitors that have diagnostics. Our business is ultimately helping you feel great, in helping you ahead and helping you refine what that personalized care should be and then acting on it.

And so I think, to your point, there will over time, probably be a really nice mix of both stand-alone diagnostic opportunities, which then lead into advanced treatment care as well as bundled services for diagnostics in core treatment pathways, like you've seen with testosterone, I think you'll see that kind of continue to expand. So I think there'll be a nice diversity there. But ultimately, my ambition as we you have done in the past is to bring these offerings to market, verticalize the infrastructure over time, which we've already started to do with our acquisition and other investments when it comes to lab diagnostics, establish that, systematize that, bringing cost down to incredible levels where you can really and truly undermine most of the peers on price and get customers huge access to this information and then ultimately be the trusted partner that can help them take that information and be incredibly action-oriented and precise with what the next step should be, how the personalized care should follow and handholding through that cadence.

So I think we're really uniquely positioned to do exactly what you're talking about, but I think there's a true distinction with us given the fact that our core business is to help keep you healthy and keep you on top of these issues. And also, we have the ability to verticalize this infrastructure in a way that can leverage testing at lead-gen into the platform.

Your next question comes from the line of Jonna Kim with TD Cowen.

You've seen nice leverage on the marketing side. Just curious if there has been changes in your marketing strategy or approach? And as you think about the New Year, how are you thinking about the marketing, especially around Super Bowl and just lapping your great success last year?

Yes. Thanks for the question, Jonna. I think we see a couple of different levers that we're able to deliver very strong marketing leverage, both in the quarter as well across the year. One is like we do see that there is significant leverage coming from the fact that we see more and more acquisition coming from both organic channels as well as via lower-cost channels.

I think as we start to push further into the comprehensive whole body testing that we spoke around earlier, that dynamic is likely to continue to get better and better as we kind of optimize and tune that engine. We also see from the shift of more and more users opting for personal isolation. The retention is becoming stronger and stronger. And most of the marketing spend that we have is either around educating consumers around the overall brand or acquiring the users. And so as we see retention elevate, we inherently get leverage on that front.

No, what we do see is we have a wide array of different growth opportunities in front of us or that will be coming in front of us in the coming quarters. That is some of the newer specialties that we've launched menopausal support elevating our presence in some of the markets where we've already seen success like the U.K. as well as some of the markets that we will likely -- that we are going to enter in the near future, such as Canada. And so I think we're not going to be shy around investing. That said, I think we're going to do so in a way that's consistent with our historical capital allocation framework that calls for the payback period of 1 year, basically positions the ecosystem to benefit from greater, greater economies of scale, so that as we look a couple of quarters down the road from those investments, you start to see some of the levers that we're enjoying right now from some of the investments we've made in the past.

And so I'd say as we look to 2026, as mentioned, the growth opportunity is probably even larger than what we anticipated before. So we will be an investment that. That said, I think the profile and our confidence in the -- at the 2030 target of the $6.5 billion of revenue and $1.3 billion of EBITDA is only increasing.

Ladies and gentlemen, this concludes today's call. Thank you all for joining, and you may now disconnect.