Hims & Hers shares slide on Q1 loss

(Sharecast News) - Hims & Hers Health shares fell sharply on Tuesday after the telehealth company swung to a first-quarter loss, as its shift away from cheaper compounded weight-loss drugs toward branded GLP-1 treatments hit margins and drove up restructuring costs.

The company reported a net loss of $92.1m, or 40 cents per share, for the three months to 31 March, compared with a profit of $49.5m, or 20 cents per share, a year earlier.

Analysts had expected a small profit of 3 to 4 cents per share, according to FactSet and LSEG estimates cited by the Wall Street Journal and Reuters.

Revenue rose 4% year on year to $608.1m, below analyst expectations of $616.8m cited by the Journal.

Adjusted EBITDA fell to $44m from $91m a year earlier.

Hims ended the quarter with 2.6 million subscribers, up 9%, while average monthly revenue per subscriber declined to $80 from $85.

The results reflected a transition in Hims' weight-loss business after regulatory and legal pressure over its use of compounded versions of GLP-1 drugs.

The company had previously benefited from selling lower-cost compounded versions of semaglutide, the active ingredient in Novo Nordisk's Wegovy, while branded GLP-1 drugs were in shortage.

The US Food and Drug Administration has since moved to restrict compounding of copycat GLP-1s and referred Hims to the Department of Justice over potential violations, according to Reuters.

In March, Hims reached an agreement with Novo Nordisk to sell Wegovy on its platform and committed to stop mass marketing compounded versions of the drug.

The company said it would now focus on FDA-approved weight-loss medicines, while offering compounded semaglutide only on a limited basis.

Chief financial officer Yemi Okupe said the pivot created about $33m of restructuring costs in the quarter, mainly from write-downs tied to the company's compounded GLP-1 supply chain, which now faced a risk of obsolescence.

"We made a deliberate strategic pivot within our weight-loss specialty, one that we knew were to create near-term financial noise," he told analysts, according to the Wall Street Journal.

Okupe said the loss was also driven by write-downs on ingredients used to compound semaglutide, as well as one-time legal and merger costs.

Hims also said a shift to shorter shipping schedules changed the timing of revenue recognition for some weight-loss products, weighing on US revenue.

The company warned that profitability could remain under pressure in the near term as it invests in international expansion and technology, including at-home blood collection services and an AI-supported chatbot.

"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," Okupe said.

Hims now expected to return to net income profitability in 2027, while maintaining a longer-term target of at least $6.5bn in revenue by 2030.

For 2026, it raised its revenue forecast to $2.8bn to $3.0bn from $2.7bn to $2.9bn, but cut its adjusted EBITDA outlook to $275m to $350m from $300m to $375m.

For the second quarter, Hims forecast revenue of $680m to $700m, ahead of the $643m expected by analysts cited by the Journal, but adjusted EBITDA of $35m to $55m, well below Wall Street's forecast of $69.6m.

At 0854 EDT (1354 BST), shares in Hims & Hers Health were down 14.93% in premarket trading in New York at $24.80.

Reporting by Josh White for Sharecast.com.