Shares of Hims & Hers Health Inc. rallied in after-hours trading Monday, reflecting a strong financial report and an upward revision to its full-year sales forecast.
The health and wellness platform, known for providing personalized care solutions and medications addressing conditions from hair loss to anxiety, reported that its new weight-loss medications have been a significant factor in attracting new subscribers, despite ongoing challenges in the supply of popular GLP-1 weight-loss drugs.
The company raised its revenue projection for 2024 to a range of $1.46 billion to $1.465 billion, up from its previous forecast of $1.37 billion to $1.4 billion, initially set in August. The company’s Chief Executive, Andrew Dudum, emphasized Hims & Hers’ commitment to accessible, customized healthcare, attributing the company’s growth to its ability to deliver affordable and transparent care. CFO Yemi Okupe highlighted the company’s rapid scaling, which has led to “accelerating top-line growth, improving profitability, and strong cash flow.”
Despite impressive revenue growth and subscriber gains, Hims & Hers faces ongoing supply chain issues with GLP-1 medications, which are popular for weight loss. In recent years, GLP-1 drugs such as Wegovy and Ozempic have seen a surge in demand, which has caused sustained supply shortages across the US Novo Nordisk, the manufacturer of Wegovy and Ozempic, has invested in expanded production capacity to alleviate the issue. However, Hims & Hers reported that shortages have not improved, with nearly 80,000 customers unable to secure name-brand GLP-1 drugs through the platform over the past two months.
Hims & Hers has worked to address the shortages by offering compounded GLP-1 alternatives and has introduced Liraglutide, a generic GLP-1, which will be available on its platform next year. These compounded drugs allow Hims & Hers to provide customized dosing solutions for customers who might need alternatives to standard GLP-1 formats, such as pre-filled pens. According to Hims & Hers, 90% of customers in a recent survey expressed satisfaction with their personalized dosing regimens.
Analysts have expressed some concern over the sustainability of Hims & Hers’ compounded GLP-1 revenue, which could be impacted by regulatory changes or improvements in GLP-1 drug availability from manufacturers. However, the company’s third-quarter results underscore its broad appeal and growth across multiple service areas. Excluding GLP-1 contributions, Hims & Hers reported a 40% increase in year-over-year subscriber growth.
Financial results for the third quarter showed substantial gains, with revenue climbing 77% year-over-year to $401.6 million, surpassing FactSet’s expectations of $382 million. The company posted a net income of $75.6 million for the quarter, a sharp improvement over the $7.6 million loss reported in the same period last year. The company also reached a milestone with over 2 million subscribers, marking a 44% increase from the previous year.
While the FDA recently noted some improvement in GLP-1 supply levels, especially from Novo Nordisk, the shortage remains a persistent issue. Hims & Hers has been in communication with state and federal agencies to inform them of ongoing customer challenges with GLP-1 availability.
Despite volatility due to external factors such as the GLP-1 shortage, Hims & Hers’ stock has performed well this year, up more than 133% year-to-date. The company’s share price jumped another 9% following the third-quarter earnings report, reflecting investor confidence in its growth trajectory and resilience amidst supply chain difficulties.
Market Watch, Investor’s Business Daily, and Business Wire contributed to this report.
