Hims & Hers (NYSE:HIMS) reported first quarter financial results that included a wider-than-expected loss and softer revenue performance, sending shares down nearly 14% to about $25 on Tuesday morning.
For the quarter, the telehealth company posted a net loss of $92.1 million, or $0.40 loss per share, compared with a net profit of $49.5 million in the same period last year. Analysts had been expecting a profit of $0.04 per share.
Revenue came in at $608.1 million, up 3.8% year-over-year from $586.0 million, but below consensus estimates of $616.8 million.
Gross margin contracted to 65% from 73% a year earlier, while adjusted EBITDA fell to $44.3 million from $91.1 million in the prior-year quarter.
Operating cash flow declined to $89.4 million from $109.1 million, though free cash flow edged higher to $53 million from $50.1 million.
The company said the first quarter reflected increased investment and shifting mix dynamics, which weighed on profitability despite continued top-line growth.
“As we exit the first quarter, our domestic business is accelerating, we’re expanding into new categories and countries, and more people than ever are relying on us for access to personal, data-driven care,” Hims & Hers CEO Andrew Dudum said in a statement.
Looking ahead, Hims & Hers guided second-quarter 2026 revenue of $680 million to $700 million, with adjusted EBITDA expected between $35 million and $55 million, representing a margin of 5% to 8%.
For full-year 2026, the company forecast revenue of $2.8 billion to $3.0 billion and adjusted EBITDA of $275 million to $350 million, implying a margin range of 10% to 12%.
Bank of America analysts described the quarter as mixed, noting that revenue and EBITDA both came in below Street expectations, while subscriber growth exceeded forecasts. They said the results point to “a hockey stick ramp for EBITDA” in 2026, but warned that the underlying margin trajectory is weakening.
“The trajectory of gross margins and EBITDA margins are moving sharply lower as HIMS shifts its mix and invests,” the analysts wrote, adding that key performance indicators over the near term will include Wegovy subscriptions, subscription fees, and retention rates.
BofA said it believes investors may be too optimistic about net retention in branded GLP-1 drugs and the sustainability of Hims & Hers’ pricing strategy.
The firm also noted that recent Wegovy subscriber growth may be partially driven by temporary factors, including a transition away from compounded prescriptions and promotional pricing that is expected to fade.
On profitability, the analysts cautioned that increased investment, particularly internationally, will likely pressure margins.
“We think it makes sense for HIMS to invest and run the International business at breakeven for a multi-year period, but it will put pressure on consolidated margins relative to current Street expectations,” they wrote.
While acknowledging long-term strategic benefits from investments in supply chain verticalization and international expansion, BofA said near-term expectations remain too high.
The firm reiterated its ‘Neutral’ rating and lowered its price objective to $30 from $32, citing execution risk tied to the GLP-1 transition and ongoing investment cycle.
The analysts also raised their 2026 revenue forecast to $2.89 billion from $2.37 billion, reflecting stronger GLP-1-related revenue and international contributions, while only slightly increasing adjusted EBITDA expectations to $257.3 million.