Quarterly revenue of $113.6 million in Q2 2022,
up 87% year-over-year
Consumer-centric strategy driving second
straight quarterly gain of >100k net new subscriptions, ending
Q2 2022 with 817,000 subscriptions, up 80% year-over-year
Raises full year 2022 revenue guidance to the
range of $470 million to $485 million and Adjusted EBITDA guidance
to the range of $(27) million to $(20) million
Platform demand and financial outperformance
driving expected Adjusted EBITDA profitability within the next four
quarters
Hims & Hers Health, Inc. (“Hims & Hers”, NYSE: HIMS),
the trusted consumer-first platform focused on providing modern
personalized health and wellness experiences to consumers, today
reported financial results for the second quarter ended June 30,
2022.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20220808005661/en/
Hims & Hers CEO Andrew Dudum (Photo:
Business Wire)
“Our second quarter results were outstanding. Each day, our
platform is enabling deep, emotional, and personalized connections,
helping to solve consumer health and wellness challenges with
authenticity and at a scale we’ve never seen before,” said Andrew
Dudum, CEO and co-founder of Hims & Hers. “For the second
straight quarter, we saw record quarterly growth in the number of
net new subscriptions, as our flywheel continues to accelerate. It
is clear our brands are resonating with consumers, enabling us to
build trust and continue to expand our loyal customer base. Given
the momentum we’re seeing across the business and the underlying
strength of our model, we are increasing our 2022 outlook for
revenue and Adjusted EBITDA. At the same time, our ability to drive
operational efficiency improvements while scaling our operations
positions us to achieve expected Adjusted EBITDA profitability
within the next four quarters.”
Key Business Metrics
(In Thousands, Except AOV, Unaudited)
Three months ended June
30,
Six months ended June
30,
2022
2021
Change
2022
2021
Change
AOV
$
78
$
74
$
4
$
78
$
74
$
4
Net Orders
1,385
786
599
2,592
1,473
1,119
As of June 30,
2022
2021
Change
Subscriptions
817
453
364
Revenue
(In Thousands, Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
Change
2022
2021
Change
Online Revenue
$
107,462
$
58,146
$
49,316
$
201,564
$
108,826
$
92,738
Wholesale Revenue
6,101
2,546
3,555
13,313
4,180
9,133
Total revenue
$
113,563
$
60,692
$
52,871
$
214,877
$
113,006
$
101,871
Total revenue year-over-year growth
87
%
69
%
90
%
71
%
Second Quarter 2022 Financial and Business Highlights
- Revenue was $113.6 million for the second quarter 2022
compared to $60.7 million for the second quarter 2021, an increase
of 87% year-over-year.
- Net loss was $(19.7) million for the second quarter 2022
compared to $(9.2) million for the second quarter 2021.
- Gross margin was 77% for the second quarter 2022
compared to 78% for the second quarter 2021.
- Adjusted EBITDA was $(7.5) million for the second
quarter 2022 compared to $(4.7) million for the second quarter
2021.
- Doubled down on commitment to women’s wellness with launch of 6
new Hers Wellness Essentials supplements formulated specifically
for women. The new supplement line includes probiotics that support
women’s general health, mental wellness, gut health, digestive
health and skin health, as well as a daily libido supplement, and
are now available at ForHers.com, the Hers App, and select CVS
Pharmacy locations nationwide.
- Launched Hers mobile platform on the iOS App Store, providing a
customized, seamless and value-add health and wellness experience
tailored for women.
Year to Date 2022 Financial Highlights
- Revenue was $214.9 million for the six months ended June
30, 2022 compared to $113.0 million for the six months ended June
30, 2021, an increase of 90% year-over-year.
- Net loss was $(35.9) million for the six months ended
June 30, 2022 compared to $(60.6) million for the six months ended
June 30, 2021.
- Gross margin was 75% for the six months ended June 30,
2022 compared to 77% for the six months ended June 30, 2021.
- Adjusted EBITDA was $(13.6) million for the six months
ended June 30, 2022 compared to $(13.2) million for the six months
ended June 30, 2021.
A reconciliation of Adjusted EBITDA, a non-GAAP measure, to net
loss, its most comparable financial measure under generally
accepted accounting principles in the United States (“U.S. GAAP”),
has been provided in this press release in the accompanying tables.
Additional information about Adjusted EBITDA is also included below
under the heading “Non-GAAP Financial Measures”.
Financial Outlook
Hims & Hers provides guidance based on current market
conditions and expectations for revenue and Adjusted EBITDA, which
is a non-GAAP financial measure.
For the third quarter 2022, we expect:
- Revenue to be in the range of $129 million to $132
million.
- Adjusted EBITDA to be in the range of $(9) million to $(7)
million, which would reflect an Adjusted EBITDA margin in the range
of (7)% to (5)%.
For the full year 2022, we expect:
- Revenue to be in the range of $470 million to $485
million.
- Adjusted EBITDA to be in the range of $(27) million to $(20)
million, which would reflect an Adjusted EBITDA margin in the range
of (6)% to (4)%.
The guidance provided above constitutes forward-looking
statements and actual results may differ materially. Refer to the
“Cautionary Note Regarding Forward-Looking Statements” safe harbor
section below for information on the factors that could cause our
actual results to differ materially from these forward-looking
statements.
We have not reconciled forward-looking Adjusted EBITDA to its
most directly comparable U.S. GAAP measure, net loss, because we
cannot predict with reasonable certainty the ultimate outcome of
certain components of such reconciliations, including
market-related assumptions that are not within our control, or
others that may arise, without unreasonable effort. For these
reasons, we are unable to assess the probable significance of the
unavailable information, which could materially impact the amount
of future net loss. See “Non-GAAP Financial Measures” for
additional important information regarding Adjusted EBITDA.
Conference Call
Hims & Hers will host a conference call to review the second
quarter 2022 results on August 8, 2022, at 5:00 p.m. ET. The
conference call can be accessed by dialing +1 (888) 510-2630 for
U.S. participants and +1 (646) 960-0137 for international
participants, and referencing conference ID #1704296. A live audio
webcast will be available online at https://investors.forhims.com/.
A replay of the call will be available via webcast for on-demand
listening shortly after the completion of the call at the same
link.
About Hims & Hers Health, Inc.
Hims & Hers is a consumer-first platform transforming the
way customers fulfill their health and wellness needs. Its digital
platform enables access to treatments for a broad range of
conditions, including those related to sexual health, hair loss,
dermatology, mental health and primary care. Hims & Hers
connects patients to licensed healthcare professionals who can
prescribe medications when appropriate. Prescriptions are fulfilled
online through licensed pharmacies on a subscription basis, making
accessing treatments simple, affordable, and straightforward.
Through the Hims & Hers mobile apps, consumers can access a
range of educational programs, wellness content, community support,
and other services that promote lifelong health and wellness. Hims
& Hers products can also be found in tens of thousands of top
retail locations in the United States. Launched in November 2017,
Hims & Hers serves the entire United States and select
locations in the United Kingdom. The company is publicly traded on
the New York Stock Exchange. For more information about Hims &
Hers, please visit forhims.com and forhers.com.
Cautionary Note Regarding Forward-Looking Statements
This press release includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements can be identified by the
use of forward-looking terminology, including the words “believe,”
“estimate,” “anticipate,” “expect,” “assume,” “imply,” “intend,”
“plan,” “may,” “will,” “potential,” “project,” “predict,”
“continue,” “could,” or “should,” or, in each case, their plural,
their negative or other variations or comparable terminology. There
can be no assurance that actual results will not materially differ
from expectations. Such statements include, but are not limited to,
any statements relating to our financial outlook and guidance,
including our ability to reach Adjusted EBITDA profitability in the
next four quarters; our expected future financial and business
performance, including with respect to the Hims & Hers
platform, and the underlying assumptions with respect to the
foregoing; statements relating to events and trends relevant to us,
including with respect to our financial condition, results of
operations, short- and long-term business operations, objectives,
and financial needs; expectations regarding our mobile
applications, market acceptance, user experience, customer
retention, our ability to invest and generate a return on any such
investment. customer acquisition costs, operating efficiencies, the
success of our business model, our ability to scale our business,
the growth of certain of our categories and the impact of our
acquisitions, our ability to expand the scope of our offerings and
experiences, and our ability to comply with the extensive, complex
and evolving regulatory requirements applicable to our business,
including without limitation state and federal healthcare and
privacy laws and regulations. These statements are based on
management’s current expectations, but actual results may differ
materially due to various factors.
The forward-looking statements contained in this press release
are based on our current expectations and beliefs concerning future
developments and their potential effects on us. Future developments
affecting us may not be those that we have anticipated. These
forward-looking statements involve a number of risks, uncertainties
(some of which are beyond our control) and other assumptions that
may cause actual results or performance to be materially different
from those expressed or implied by these forward-looking
statements. These risks and uncertainties include, but are not
limited to, those factors described in the “Risk Factors” section
of each of our most recently filed Quarterly Report on Form 10-Q,
our most recently filed Annual Report on Form 10-K, and any of our
subsequent filings with the Securities and Exchange Commission (the
“Commission”).
Should one or more of these risks or uncertainties materialize,
or should any of our assumptions prove incorrect, actual results
may vary in material respects from those projected in these
forward-looking statements. We undertake no obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required
under applicable securities laws.
By their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future. We caution
you that forward-looking statements are not guarantees of future
performance and that our actual results of operations, financial
condition and liquidity, and developments in the industry in which
we operate may differ materially from those made in or suggested by
the forward-looking statements contained in reports we have filed
or will file with the Commission, including our most recently filed
Quarterly Report on Form 10-Q, our most recently filed Annual
Report on Form 10-K, and any of our subsequent filings with the
Commission. In addition, even if our results of operations,
financial condition and liquidity, and developments in the industry
in which we operate are consistent with the forward-looking
statements contained in such reports, those results or developments
may not be indicative of results or developments in subsequent
periods.
Key Business Metrics
Average Order Value (“AOV”) is defined as Online Revenue
divided by Net Orders (each as defined below).
“Net Orders” are defined as the number of online customer
orders minus transactions related to refunds, credits, chargebacks,
and other negative adjustments. Net Orders represent transactions
made on our platform during a defined period of time and exclude
revenue recognition adjustments recorded pursuant to U.S. GAAP.
“Online Revenue” represents the sales of products and
services on our platform, net of refunds, credits, and chargebacks,
and includes revenue recognition adjustments recorded pursuant to
U.S. GAAP, primarily relating to deferred revenue and returns
reserve. Online Revenue is generated by selling directly to
consumers through our websites and mobile applications. Our Online
Revenue consists of products and services purchased by customers
directly through our online platform. The majority of our Online
Revenue is subscription-based, where customers agree to be billed
on a recurring basis to have products and services automatically
delivered to them.
“Subscriptions” are defined as the number of customer
agreements where the customer has agreed to be automatically billed
on a recurring basis at a defined cadence. The billing cadence is
typically defined as a number of months (for example, billed every
month or every three months). Subscriptions are excluded from our
reporting when payment has not occurred at the contracted billing
cadence. Subscription billing is preferred by many of our customers
because most of the products and services we make available treat
chronic conditions and these product and service offerings are most
effective when taken consistently and continuously. Customers can
cancel subscriptions in between billing periods to stop receiving
additional products and services and can reactivate subscriptions
to continue receiving additional products and services.
Subscriptions are sometimes also referred to by us as “subscription
memberships” or “memberships.”
“Wholesale Revenue” represents non-prescription product
sales to retailers through wholesale purchasing agreements. We sell
only non-prescription products to wholesale partners. In addition
to being revenue generative and profitable, wholesale partnerships
have the added benefit of generating brand awareness with new
customers in physical environments.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In Thousands, Except Share and
Per Share Data)
June 30, 2022
December 31,
2021
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
55,033
$
71,784
Short-term investments
139,944
175,490
Inventory
19,673
13,558
Prepaid expenses and other current
assets
15,835
9,073
Total current assets
230,485
269,905
Restricted cash
856
856
Goodwill
110,881
110,881
Intangibles, net
23,806
25,890
Operating lease right-of-use assets
4,459
5,111
Other long-term assets
9,478
7,942
Total assets
$
379,965
$
420,585
Liabilities and stockholders'
equity
Current liabilities:
Accounts payable
$
27,093
$
19,640
Accrued liabilities
11,809
12,194
Deferred revenue
2,337
3,188
Earn-out payable
12,972
42,834
Operating lease liabilities
1,412
1,365
Total current liabilities
55,623
79,221
Operating lease liabilities
3,402
4,117
Earn-out liabilities
1,510
1,999
Other long-term liabilities
371
629
Total liabilities
60,906
85,966
Commitments and contingencies
Stockholders' equity:
Common stock – Class A shares, par value
$0.0001, 2,750,000,000 shares authorized and 198,472,604 and
196,414,363 shares issued and outstanding as of June 30, 2022 and
December 31, 2021, respectively; Class V shares, par value $0.0001,
10,000,000 shares authorized and 8,377,623 shares issued and
outstanding as of June 30, 2022 and December 31, 2021
21
20
Additional paid-in capital
634,388
613,687
Accumulated other comprehensive loss
(468
)
(137
)
Accumulated deficit
(314,882
)
(278,951
)
Total stockholders' equity
319,059
334,619
Total liabilities and stockholders'
equity
$
379,965
$
420,585
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In Thousands, Except Share and
Per Share Data, Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2022
2021
2022
2021
Revenue
$
113,563
$
60,692
$
214,877
$
113,006
Cost of revenue
26,387
13,415
52,945
25,482
Gross profit
87,176
47,277
161,932
87,524
Gross margin %
77
%
78
%
75
%
77
%
Operating expenses:(1)
Marketing
60,490
27,944
108,583
54,902
Selling, general, and administrative
46,876
36,740
90,458
98,438
Total operating expenses
107,366
64,684
199,041
153,340
Loss from operations
(20,190
)
(17,407
)
(37,109
)
(65,816
)
Other income:
Change in fair value of liabilities
121
7,963
562
5,282
Other income, net
402
325
722
101
Total other income, net
523
8,288
1,284
5,383
Loss before income taxes
(19,667
)
(9,119
)
(35,825
)
(60,433
)
Provision for income taxes
(12
)
(34
)
(106
)
(124
)
Net loss
(19,679
)
(9,153
)
(35,931
)
(60,557
)
Other comprehensive (loss) income
(145
)
32
(331
)
(29
)
Total comprehensive loss
$
(19,824
)
$
(9,121
)
$
(36,262
)
$
(60,586
)
Net loss per share attributable to common
stockholders:
Basic and diluted
$
(0.10
)
$
(0.05
)
$
(0.18
)
$
(0.35
)
Weighted average shares outstanding:
Basic and diluted
203,949,535
191,922,517
203,326,215
172,631,312
______________
(1) Includes stock-based compensation expense as follows (in
thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2022
2021
2022
2021
Marketing
$
1,072
$
772
$
1,895
$
2,618
Selling, general, and administrative
9,560
8,388
17,593
40,772
Total stock-based compensation expense
$
10,632
$
9,160
$
19,488
$
43,390
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In Thousands, Unaudited)
Six Months Ended June
30,
2022
2021
Operating activities
Net loss
$
(35,931
)
$
(60,557
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
3,562
899
Stock-based compensation
19,488
43,390
Change in fair value of liabilities
(562
)
(5,282
)
Warrant expense in connection with
Merger
—
154
Amortization of debt issuance costs
—
144
Net amortization on securities
863
560
Benefit for deferred taxes
(258
)
—
Non-cash operating lease cost
755
756
Non-cash other
58
399
Changes in operating assets and
liabilities:
Inventory
(6,115
)
(3,047
)
Prepaid expenses and other current
assets
(6,762
)
(4,635
)
Other long-term assets
(27
)
(58
)
Accounts payable
7,453
7,353
Accrued liabilities
150
5,583
Deferred revenue
(851
)
(253
)
Operating lease liabilities
(772
)
(753
)
Earn-out payable
(6,848
)
—
Net cash used in operating activities
(25,797
)
(15,347
)
Investing activities
Purchases of investments
(89,146
)
(187,521
)
Maturities of investments
101,259
48,421
Proceeds from sales of investments
22,291
1,215
Investment in website and mobile
application development and internal-use software
(2,397
)
(1,833
)
Purchases of property, equipment, and
intangible assets
(276
)
(122
)
Deferred consideration paid for
acquisitions
(459
)
—
Acquisition of business, net of cash
acquired
—
(748
)
Net cash provided by (used in) investing
activities
31,272
(140,588
)
Financing activities
Pre-closing stock repurchase
—
(22,027
)
Proceeds from issuance of common stock
upon Merger
—
197,686
Proceeds from PIPE
—
75,000
Payments for transaction costs related to
securities issuances
—
(12,851
)
Proceeds from repayment of promissory
notes associated with vested and unvested shares
—
1,193
Proceeds from exercise of Class A common
stock warrants
—
808
Proceeds from exercise of vested and
unvested stock options, net of repurchases and cancelations
1,470
254
Payments for taxes related to net share
settlement of equity awards
(1,183
)
(4,458
)
Payments for earn-out consideration for
acquisitions
(23,014
)
—
Proceeds from employee stock purchase
plan
553
—
Net cash (used in) provided by financing
activities
(22,174
)
235,605
Foreign currency effect on cash and cash
equivalents
(52
)
(19
)
(Decrease) increase in cash, cash
equivalents, and restricted cash
(16,751
)
79,651
Cash, cash equivalents, and restricted
cash at beginning of period
72,640
28,350
Cash, cash equivalents, and restricted
cash at end of period
$
55,889
$
108,001
Reconciliation of cash, cash
equivalents, and restricted cash
Cash and cash equivalents
$
55,033
$
107,145
Restricted cash
856
856
Total cash, cash equivalents, and
restricted cash
$
55,889
$
108,001
Supplemental disclosures of cash flow
information
Cash paid for taxes
$
528
$
227
Non-cash investing and financing
activities
Recapitalization from redeemable
convertible preferred stock pre-closing stock repurchase
$
—
$
125
Conversion of redeemable convertible
preferred stock to common stock
—
249,837
Assumption of Merger warrants
liability
—
51,814
Exercise of Private Placement Warrants and
Public Warrants
—
20,872
Conversion of Series D preferred stock
warrants to Class A common warrants
—
1,160
Vesting of early exercised stock
options
76
106
Common stock issued, contingent
consideration, and payables for acquisition of business
—
4,064
Non-GAAP Financial Measures
In addition to our financial results determined in accordance
with U.S. GAAP, we present Adjusted EBITDA (which is a non-GAAP
financial measure), and Adjusted EBITDA margin (which is a non-GAAP
ratio), each as defined below. We use Adjusted EBITDA and Adjusted
EBITDA margin to evaluate our ongoing operations and for internal
planning and forecasting purposes. We believe that Adjusted EBITDA
and Adjusted EBITDA margin, when taken together with the
corresponding U.S. GAAP financial measures, provide meaningful
supplemental information regarding our performance by excluding
certain items that may not be indicative of our business, results
of operations, or outlook. We consider Adjusted EBITDA and Adjusted
EBITDA margin to be important measures because they help illustrate
underlying trends in our business and our historical operating
performance on a more consistent basis. We believe that the use of
Adjusted EBITDA and Adjusted EBITDA margin is helpful to our
investors as they are used by management in assessing the health of
our business and our operating performance.
However, non-GAAP financial information is presented for
supplemental informational purposes only, has limitations as an
analytical tool, and should not be considered in isolation or as a
substitute for financial information presented in accordance with
U.S. GAAP. In addition, other companies, including companies in our
industry, may calculate similarly-titled non-GAAP financial
measures or ratios differently or may use other financial measures
or ratios to evaluate their performance, all of which could reduce
the usefulness of Adjusted EBITDA or Adjusted EBITDA margin as
tools for comparison. Reconciliations are provided below to the
most directly comparable financial measures stated in accordance
with U.S. GAAP. Investors are encouraged to review our U.S. GAAP
financial measures and not to rely on any single financial measure
to evaluate our business.
Adjusted EBITDA is a key performance measure that our management
uses to assess our operating performance. Because Adjusted EBITDA
facilitates internal comparisons of our historical operating
performance on a more consistent basis, we use this measure for
business planning purposes. “Adjusted EBITDA” is defined as net
loss before stock-based compensation, depreciation and
amortization, acquisition-related costs, provision for income
taxes, interest income, change in fair value of liabilities,
one-time bonuses and warrant expense in connection with the
combination of Hims, Inc. (“Hims”) and Oaktree Acquisition Corp.
(“OAC”), with Hims continuing as the surviving entity and as a
wholly-owned subsidiary of OAC, which changed its name to Hims
& Hers Health, Inc. (the “Merger”), and amortization of debt
issuance costs. “Adjusted EBITDA margin” is defined as Adjusted
EBITDA divided by revenue.
Some of the limitations of Adjusted EBITDA include (i) Adjusted
EBITDA does not properly reflect capital commitments to be paid in
the future, and (ii) although depreciation and amortization are
non-cash charges, the underlying assets may need to be replaced and
Adjusted EBITDA does not reflect these capital expenditures. In
evaluating Adjusted EBITDA, you should be aware that in the future
we will incur expenses similar to the adjustments in this
presentation. Our presentation of Adjusted EBITDA should not be
construed as an inference that our future results will be
unaffected by these expenses or any unusual or non-recurring items.
We compensate for these limitations by providing specific
information regarding the U.S. GAAP items excluded from Adjusted
EBITDA. When evaluating our performance, you should consider
Adjusted EBITDA in addition to, and not as a substitute for, other
financial performance measures, including our net loss and other
U.S. GAAP results.
Net Loss to Adjusted EBITDA
Reconciliation
(In Thousands, Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2022
2021
2022
2021
Revenue
$
113,563
$
60,692
$
214,877
$
113,006
Net loss
(19,679
)
(9,153
)
(35,931
)
(60,557
)
Stock-based compensation
10,632
9,160
19,488
43,390
Depreciation and amortization
1,821
505
3,562
899
Acquisition-related costs
150
2,872
266
2,872
Provision for income taxes
12
34
106
124
Change in fair value of liabilities
(121
)
(7,963
)
(562
)
(5,282
)
Interest income
(356
)
(113
)
(531
)
(195
)
Merger bonuses
—
—
—
5,219
Warrant expense in connection with
Merger
—
—
—
154
Amortization of debt issuance costs
—
—
—
144
Adjusted EBITDA
$
(7,541
)
$
(4,658
)
$
(13,602
)
$
(13,232
)
Net loss as a % of revenue
(17
)%
(15
)%
(17
)%
(54
)%
Adjusted EBITDA margin
(7
)%
(8
)%
(6
)%
(12
)%
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Hims and Hers Health (NYSE:HIMS)
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