Hims & Hers Bounced Back 9%, But Its Earnings Reveal a Costly Trade-Off

Key Points

• Hims & Hers shares tumbled this week after a Q3 earnings and revenue miss, remaining far below their 2025 highs despite a partial rebound.
• The company lowered its full-year adjusted EBITDA guidance amid falling subscriber numbers, compressed gross margins, and reduced weight-loss marketing spending.
• The FTC lawsuit over alleged privacy and billing violations expanded to include five more states, adding to legal pressure alongside a separate securities class action.

Even a nearly 9% rebound on Wednesday, Nov. 11, couldn't undo a punishing start to the week for Hims & Hers Health NYSE: HIMS. Shares had already plunged nearly 12% ahead of Monday evening's Q3 earnings report, and disappointing results—a double miss—sent the stock tumbling another 16.6% on Tuesday.

The damage extends well beyond this week's sell-off. Even after Wednesday's recovery, HIMS remains roughly 47% below its July 6 year-to-date high and 71.5% below its all-time high in 2025.

A sustained recovery could prove challenging. With mounting legal troubles, compressed margins, and a reduced full-year adjusted EBITDA outlook, Hims & Hers faces growing pressure to prove its long-term growth strategy can deliver stronger profitability.

Hims & Hers' Earnings Miss Streak Continues

The earnings shortfall was far more pronounced than the revenue miss, which came despite continued strong sales growth.

Earnings per share (EPS) of three cents fell significantly short of the analyst consensus of 6 cents. Revenue, which came in at $890.4 million, was up 49% year over year (YOY) but slightly below the approximately $893 million consensus estimate.

The EPS miss was Hims & Hers' third in a row and fifth in the last six quarters, while the revenue miss was its third in the past four quarters.

Subscriber growth was a mixed bag. The company ended Q3 with nearly 2.8 million subscribers, up 13% YOY but approximately 100,000 fewer than in Q2. The figure also fell short of the 3.04 million subscribers expected by analysts.

Management attributed the quarter-over-quarter subscriber decline to reduced U.S. weight-loss marketing and international brand migrations. In his earnings call comments, CEO Andrew Dudum acknowledged that the company is currently in the process of trading “near-term subscriber growth for a stronger position in the years that follow.”

Hims & Hers also tightened its full-year revenue outlook to a range of $3.13 billion to $3.15 billion, from a previous range of $3.1 billion to $3.3 billion.

At the same time, management lowered full-year adjusted EBITDA expectations from a range of $275 million to $325 million to $257 million to $277 million. The company attributed the adjustment to planned pricing and marketing investments in the United Kingdom and Germany, along with the timing of deferred weight-loss membership revenue.

For the quarter, Hims & Hers posted a net loss of $33 million, equivalent to a GAAP loss of 14 cents per share, following net income of $15.8 million in Q3 2025. Gross margin was 57%, down from 64% in Q2 and 74% a year earlier, while free cash flow of $26 million marked a notable YOY drop from $79.4 million.

Hims & Hers’ Growth Opportunities Come With a Catch

Despite the slight revenue miss, monthly revenue per average subscriber rose 30% YOY to $105.

International expansion provided another bright spot, with revenue outside the United States surging 321% to $233.3 million.

However, approximately $135 million of that revenue came from the company's acquisition of Eucalyptus.

Although management lowered its full-year adjusted EBITDA guidance, it had expressed increased confidence in August about achieving its longer-term 2030 targets of at least $6.5 billion in revenue and $1.3 billion in adjusted EBITDA.

Expanded services and products offer another glimmer of hope. According to Dudum, Hims & Hers AI-native infrastructure positions the company “to launch treatments of increasing complexity, including testosterone replacement therapy [in Q4] and our Peptides+ offering later [in November].”

Additionally, Hers-branded revenue is approaching $1 billion in 2026, which supports the company’s decision to scale its dermatology and menopause businesses.

Dudum also highlighted the company’s ongoing partnerships with Big Pharma mainstays Novo Nordisk NYSE: NVO and Eli Lilly NYSE: LLY, which allow patients to complete virtual consultations, receive prescriptions, and purchase FDA-approved, brand-name GLP-1 weight-loss medications directly through the Hims & Hers telehealth platform.

The Eli Lilly agreement, which was announced on Nov. 6, helps expand access to Zepbound and Foundayo. Previously, patients seeking Lilly's weight-loss medications through Hims & Hers had to leave the platform to complete their purchases through LillyDirect.

The move levels the playing field with Novo Nordisk, which has been offering its weight-loss medications Wegovy and Ozempic on Hims & Hers’ platform since March 2026. The agreement also marked a turning point in their relationship, with Novo Nordisk agreeing to dismiss its patent-infringement lawsuit over compounded semaglutide without prejudice.

For Hims & Hers, the availability of both companies' GLP-1 offerings could support long-term revenue growth. However, the shift toward lower-margin branded weight-loss medications, along with international expansion, has contributed to significant gross-margin compression. That leaves investors weighing the potential for a larger customer base against the challenge of restoring stronger profitability.

FTC Lawsuit Expands as Hims & Hers Faces Shareholder Claims

Legal pressure intensified further on Nov. 10, when the Federal Trade Commission (FTC) announced that five additional states—Arizona, Florida, Nebraska, Ohio, and Wisconsin—had joined its lawsuit against Hims & Hers.

The agency originally filed the case on July 29 alongside the Utah Division of Consumer Protection and Los Angeles County Counsel acting on behalf of California. The regulators sued Hims & Hers over alleged privacy and billing violations.

That suit alleges that the company shared consumers’ sensitive health information with third-party advertising platforms, including Meta Platforms NASDAQ: META and Snap NYSE: SNAP, despite promising patient privacy.

According to the complaint, Hims & Hers made subscriptions difficult to cancel, routinely processed initial refill charges 10 days before consumers’ selected cadence, and charged for prescriptions almost immediately after consumers submitted an intake form, despite telling them that they could first consult with a medical provider to find a treatment that is "right for them."

Separately, on Sept. 1, a securities class action was filed against Hims & Hers on behalf of shareholders who purchased or acquired the company’s stock between Aug. 4, 2025, and July 29, 2026.

The securities lawsuit alleges that Hims & Hers and certain executives violated the Securities Exchange Act of 1934 by making materially misleading statements about the company’s business, operations, and prospects and failing to disclose that its privacy and billing practices could expose the company to regulatory scrutiny and potential financial penalties.

Hims & Hers disputes the allegations in the FTC case and has said it intends to vigorously defend itself against the FTC’s claims.

Hims & Hers’ Next Test: Subscribers and Margins

Wednesday's rebound offered some relief, but the next few quarters will provide a clearer picture of whether Hims & Hers' growth strategy is working.

Management expects reduced U.S. weight-loss marketing to remain a headwind for subscriber growth in Q4, with a renewed marketing push planned for Q1 2027 as the company expands its treatment offerings.

For investors, the key will be whether those efforts can restore subscriber momentum without putting further pressure on gross margins and cash flow.

The expanding FTC lawsuit adds another layer of uncertainty, making sustained improvement in the company's operating performance especially important.