Key facts
- Hims & Hers Health shares fell nearly 7% in premarket trading due to concerns over shrinking profit margins.
- The company reported strong second-quarter revenue that exceeded expectations and added over 300,000 subscribers.
- Increased costs from branded weight-loss drugs and international expansion led to a wider-than-expected quarterly loss.
- Gross margins have declined for four consecutive quarters.
- Hims & Hers raised its 2026 revenue forecast but trimmed its adjusted core earnings outlook.
- The company reported third-quarter 2025 revenue of $599 million, up 49% year-over-year, with 2.47 million paying customers.
- Adjusted earnings per share were $0.06, missing targets, and gross margin fell to 74%.
Hims & Hers Health shares declined in premarket trading as concerns over diminishing profit margins overshadowed strong subscriber growth and an improved annual revenue forecast. The company's aggressive expansion into branded GLP-1 weight-loss drugs and international markets has driven up costs, leading to a wider-than-expected loss for the second quarter.
Despite exceeding revenue expectations and adding over 300,000 subscribers in the second quarter, analysts warned that the focus on growth may be harming profitability. Morningstar analyst Keonhee Kim noted that gross margins have fallen for four consecutive quarters. While Hims & Hers raised its 2026 revenue forecast, it lowered the upper end of its adjusted core earnings outlook.
Chief Financial Officer Oluyemi Okupe acknowledged that the increasing contribution of branded weight loss products and international revenue is expected to keep gross margins below historical levels. Analysts anticipate these rising costs will continue to pressure the stock. However, Barclays analyst Glen Santangelo suggested that margins could see improvement in the latter half of the year.
In its third quarter of 2025, Hims & Hers reported revenue of $599 million, a 49% year-over-year increase, with its subscriber base growing to 2.47 million. However, adjusted earnings per share of $0.06 missed analyst targets, and gross margin contracted to 74% from 79% a year prior. The company projected fourth-quarter revenue between $605 million and $625 million, with EBITDA margins between 9% and 10%.