Hims & Hers Q4 2025 Earnings

Hims & Hers Health, Inc. (HIMS) just released their latest earnings and it was an important release for a company that’s down 53% year to date.

HIMS is a multi-specialty telehealth platform that connects consumers with licensed healthcare professionals and pharmacies. Launched in 2017, the company has transformed from a direct-to-consumer lifestyle brand focused on sexual health and hair loss into a comprehensive health platform. Today, it operates across diverse verticals including mental health, dermatology, cardiovascular health, and weight loss. The company’s core strategy has shifted recently and is starting to rely on vertical integration, owning its own pharmacies and labs and driving personalization, where it provides custom-formulated treatments tailored to individual patient needs. By removing the traditional barriers to healthcare, such as high costs and social stigma, Hims & Hers has built a massive, recurring subscriber base of over 2.5 million users.

Financial Performance vs. Expectations

Hims & Hers (HIMS) reported a robust fourth quarter and full year for 2025, continuing its streak of high-growth performance.

• Revenue: Q4 revenue hit $618 million, representing 28% year-over-year (YoY) growth. For the full year, revenue reached $2.35 billion, an impressive 59% increase over 2024 driven by high growth in their weight loss solutions business.
• Profitability & Cash Flow: Adjusted EBITDA for Q4 was $66 million (11% margin). For the full year 2025, the company generated $318 million in Adjusted EBITDA.
  • Operating Cash Flow: Full-year operating cash flow reached $300 million.
  • Free Cash Flow (FCF): Full-year FCF was $57.4 million. Notably, Q4 FCF was slightly negative at $(2.6) million. This dip was driven by a massive $225 million annual investment in CapEx (including $59M in Q4) to build out their 1 million+ sq. ft. pharmacy and lab footprint. One thing to remember after FCF is that they do issues stock-based compensation of $135M in 2025 so adjusted for that, FCF is still negative.

Guidance vs. Expectations

While the 2025 results were strong, the 2026 guidance initially caused some market jitters:

• Q1 2026 Revenue: Expected between $600M- $625M which is lower than the ~$650M the market expected. This reflects a sequential softening caused by a $65 million revenue headwind due to changes in shipping cadences for the weight loss business with adjusted EBITDA coming in at $35-$55M below the ~$80M the market expected.
• Full Year 2026: Revenue is projected at $2.7B-$2.9B (15% to 24% growth). This excludes the impact of the newly announced Eucalyptus acquisition.

Weight Loss & GLP-1 Business Dynamics

The main issue the company is running into is while weight loss has transitioned from a niche vertical to a massive growth engine, it now carries the highest degree of regulatory risk.

• Revenue Breakdown: While Hims does not break out GLP-1 revenue specifically, management stated that the majority of 2025 revenue still came from non-GLP-1 categories which is a good thing. At the same time, the Hers brand, which drives a good chunk of the weight loss demand, grew over 100% YoY, making up nearly 40% of U.S. revenue.
• Subscriber Concentration: Management emphasizes that while GLP-1s are a meaningful accelerant, they are used by only a small minority of the platform’s 2.5 million subscribers. This is a key part of the bull case: that the core business is diversified enough to survive a regulatory ban on compounding although even a small minority using a higher priced drug can have a decent sized impact on revenue.
• Margin Impact: The weight loss business is more capital-intensive. Gross margins fell from 79% to 72% in Q4, reflecting the costs of cold-chain shipping for injectables and lower-margin initial pricing for GLP-1 treatments.

Recent Acquisitions & Strategic Spending

Hims is using its strong balance sheet to pivot toward a global footprint and vertical integration. They recently raised debt to have cash on hand for M&A.

• Eucalyptus ($1.15 Billion): Hims’ largest acquisition to date, targeting Australia and Japan. This is a $450M ARR business and the guidance for 2026 excludes any impact from this acquisition.
  • Funding: $240 million in cash upfront. The remaining ~$910 million in deferred/earnout payments can be settled in cash or Class A stock at Hims’ discretion giving them flexiblity in capital allocation.
• YourBio ($150 Million): An all-cash transaction for microneedle blood sampling technology, essential for the new Labs diagnostic offering.
• ZAVA & Livewell: 2025 acquisitions that established a foothold in the UK, Germany, France, and Canada.

Overall, these moves are clearly a move to expand into international markets(2025 revenue here grew 400% to $134M) and a way to expand their labs and diagnostics business.

The GLP-1 Lawsuit & Regulatory Compounding Issues

This is the main overhang for this stock. The growth isn’t terrible but it’s the risk of how much revenue would be lost if GLP-1s were just fully removed from the platform.

• The Compounding Loophole: Hims relies on the FDA shortage list to legally sell compounded GLP-1s. If big pharma (Eli Lilly/Novo Nordisk) resolves supply issues, this legal protection may vanish.
• The Pill Controversy: Hims recently pulled a $49/month oral compounded GLP-1 pill from the market shortly after launch. Management cited a desire to prioritize relationships with ecosystem stakeholders, likely a strategic move to avoid a direct legal confrontation with the FDA and big pharma over patent-violating oral formulations.
• The Shipping Pivot: Hims is intentionally shifting volume to 503(a) pharmacies (individualized prescriptions) rather than bulk manufacturing. This transition is responsible for the $65 million revenue delay in Q1 but is seen as a necessary move to align with tighter regulatory standards.

Strengths vs. Main Challenges

In the end, HIMS is an interesting investment with a variety of strengths but also a few challenges that they’re facing as a company keeping its stock pressured.

Q&A

Q&A Highlights: Analysts pushed for clarity on the durability of weight loss. Management responded by pointing to their move toward a multi-treatment approach, meaning they aim to sell branded, generic, and compounded versions so they aren’t tied to a single regulatory outcome. While compounded and generic Rx is their bread and butter, that doesn’t mean they can’t partner with drug companies to sell their branded offerings as well. Still, this GLP-1 saga will be a significant overhang until investors can get a clearer picture of how that impacts this company.

Valuation

Hims is currently a stock with one big issue and in this market, its one that’s hard to ignore. This is a company that has a lot of growth baked in and management isn’t readjusting expectations any lower with their goal of $6.5B in revenue by 2030 and $1.3B in EBITDA by then. If they can actually achieve that then a $3.5B valuation may seem like a bargain although that depends on how much dilution is needed to get there.

• The Numbers: It seems like 50%+ growth is over at least for now but even the high teens growth they’re guiding for isn’t too bad and it’ll be a bit higher if the Eucalyptus deal closes. The company has also done a good job in improving their eco-system. A company selling generic drugs isn’t hard to disrupt but one with its own labs, compounding pharmacies and unique personalized offerings gets more interesting. From the perspective of valuation, this is still a company that is not generating free cash flow after SBC but it’s possible that actually happens in 2026 and their $6.5B goal for 2026 would likely mean they’re throwing off $500M+ in free cash flow by then even if part of that is offset by SBC.
• Final Decision: I think this has right on the edge of a speculative buy at this price. It’s not a slam dunk with the unknowns around GLP-1s but even without that, this is still a business that has upside from this price. The core business (Hair, Sexual Health) is becoming a cash cow growing at 30%. If Hims can successfully pivot from compounded GLP-1s to a broader weight loss ecosystem (including diagnostics and branded drugs), the current price represents a major long-term opportunity. Their diagnostics offerings and compounding pharmacies are what really makes this interesting for me and at this price, I may start to think about opening a position. The main concern I have is that this is essentially a market based business. In 2025, they spent nearly $1B in marketing to replace consumers leaving the platform and their cost per acquired consumer isn’t cheap so it’s important to track how that number is doing and it seems to be going up.

Disclosure : I may be long stocks discussed in this article in the near future. I am not a financial advisor and do stock analysis as a hobby. Opinions are my own. This is not financial advice. Consult with a financial advisor before making any investments as stock investing comes with risk of loss.