HIMS Q1 Revenue and Profits Miss Expectations, GLP-1 Transformation Squeezes Margins

The US telemedicine platform Hims & Hers Health Inc. (HIMS.N) announced its financial results for the first quarter of the fiscal year 2026 on Monday, with both revenue and earnings per share falling short of market expectations. The strategic transformation of its weight loss business, driven by a partnership with Novo Nordisk, resulted in a significant compression of gross margins. The company raised its full-year revenue guidance but lowered its profit expectations, causing its stock price to fall by about 13% after hours.

The financial report shows that the revenue for the first quarter, which ended on March 31st, was $608.1 million, growing by only 4% year-over-year, which is lower than the analysts' consensus expectation of $616.9 million; the GAAP diluted loss per share was $0.40, which is significantly lower than the market's expectation of a profit of $0.04 per share, and last year at this time it was a profit of $0.20 per share.

The adjusted EBITDA for the quarter was $44.3 million, in the middle of the company's guidance range of $35 million to $55 million, but more than half lower than the $91.1 million from the same period last year. The number of subscribers increased to approximately 25.84 million, a year-over-year growth of 9%, significantly slower compared to the 38% growth rate from the previous year.

The stock price of Hims & Hers closed at $29.12 during regular trading hours, up 3.01%; in after-hours trading, it fell to approximately $25.33, a drop of 13%, which is roughly in line with the implied volatility of about 14% in the options market prior to the release.

One-time Restructuring Impacts GAAP Profit

The company stated that the gross margin for this quarter decreased from 73% last year to 65%, mainly due to the inclusion of $28.5 million in non-cash restructuring and third-party costs related to the "2026 US Weight Loss Business Announcement" in operating expenses, including inventory write-downs. The adjusted gross margin, excluding this one-time impact, was 70%, still a decrease of about 300 basis points compared to the same period last year.

"The significant fluctuations in this quarter's profit and loss statement mainly come from two types of non-recurring items: one-time restructuring related to the strategic transformation of the US weight loss business, and losses from the fair value changes in financial assets and liabilities," the company pointed out in its 10-Q filing summary, "However, the adjusted gross margin still decreased by about 300 basis points, indicating that the structural gross margin dilution from the increased proportion of the brand's GLP-1 drugs is beginning to emerge."

The operating cash flow for the quarter was $89.4 million, and the free cash flow was $53 million, showing that the cash conversion capability remains robust, indicating that this quarter's losses were mainly non-cash items.

Novo Nordisk Partnership Reshapes the Weight Loss Business Model

In early March, Hims & Hers announced a strategic adjustment to its US weight loss business, and officially launched a partnership with Danish pharmaceutical company Novo Nordisk (NVO.N) on March 26th, offering a variety of FDA-approved GLP-1 drugs, including Wegovy oral agents, to eligible customers, starting at approximately $149 per month. At the same time, the company reduced the supply of compound semi-bovine nucleoside weight loss drugs to a "limited scale".

This adjustment took place against the backdrop of the US Food and Drug Administration (FDA) increasing its supervision of compound GLP-1 drugs in the telemedicine industry. The FDA had previously issued warning letters to 30 telemedicine companies, accusing