Hims & Hers Eyes Global Growth: Will $1.15B Eucalyptus Deal Fuel Its Recovery or Dilute Shareholders?

Key Points

• Hims & Hers Health plans to acquire Australian telehealth platform Eucalyptus for up to $1.15 billion, targeting expansion into Australia, Japan, the United Kingdom, Germany, and Canada.
• To fund the deal, Hims & Hers borrowed $350 million via zero-coupon convertible senior notes that could convert into more than 11.8 million shares, raising shareholder dilution concerns.
• HIMS shares have fallen more than 18% since its May 11 earnings call, with slowing revenue growth, negative EPS growth, and short interest at 31.4% weighing on the stock.

As the market finds itself in the thick of Q2 earnings season, there is—per usual—a considerable amount of noise. Companies that have handily beaten consensus expectations have been punished, while others have seen their shares surge despite dramatically missing analyst forecasts.

But as unpredictable as the market’s reaction to some earnings can be, others have been painfully predictable. That has been especially true for telehealth platform Hims & Hers Health NYSE: HIMS.

Following an enormous earnings miss and slightly less painful revenue miss earlier this month, shares of HIMS have sold off. The stock has found itself down more than 18% since the company’s earnings call on May 11, which has helped drag its one-year performance down to a loss of more than 50%.

But amid the fallout was a somewhat overlooked reminder that the San Francisco-based company is not just eyeing international expansion, it is actively pursuing it with a controversial financing plan.

Hims & Hers’ Path to Global Expansion Begins With Eucalyptus

Hims & Hers isn’t aiming to compete with Big Pharma giants like Eli Lilly NYSE: LLY and AbbVie NYSE: ABBV.

Instead, the company is embracing its niche role as a healthcare disruptor that is capitalizing on the GLP-1 weight loss, hair loss, sexual health, mental health, and dermatology markets by offering telehealth access in the United States and—possibly abroad in the second half of 2026.

That begins with Hims & Hers' planned acquisition of Australian telehealth platform Eucalyptus, which was announced on Feb. 19. The $1.15 billion deal is expected to close in the second half of this year, and would mark the company's latest foray into the global telehealth marketplace.

Founded in 2019, Eucalyptus connects patients with medical practitioners for remote consultations, prescriptions and home delivery of medications and supplements. If its D2C services sound a lot like those offered by Hims & Hers in the United States, that’s because they are—but with international scale.

Eucalyptus’s core brands include:

• Pilot: Men’s health treatments for sexual health, hair loss, and weight management.

• Juniper: Remote weight loss and menopause clinic pairing GLP-1 drugs—including Novo Nordisk NYSE: NVO products Wegovy and Ozempic—with health coaching and dieticians.

• Kin: Reproductive health and fertility treatment for family planning.

According to a company press release, the acquisition makes Hims & Hers “well-positioned, upon closing of the [Eucalyptus] acquisition, to expand into Australia and Japan and deepen its presence in the United Kingdom, Germany, and Canada.”

But for Hims & Hers, whose slow climb toward profitability finally materialized in 2024, taking on more than $1 billion in debt obligations could risk its financial well-being. According to TradeSmith, the company reached the Green Zone for the first time this year only two months ago.

But Hims & Hers is proceeding with a financing plan that, if successful, will result in the company not only diversifying away from U.S. regulatory risks but rapidly expanding its role as a global consumer health provider.

Does Hims & Hers’ Eucalyptus Deal Run the Risk of Shareholder Dilution?

Despite the deal’s price tag of up to $1.15 billion, Eucalyptus brings meaningful scale to the transaction. When Hims & Hers announced the acquisition in February, Eucalyptus had an annual recurring revenue run rate of more than $450 million.

In order to fund that purchase, Hims & Hers has borrowed $350 million via zero-coupon convertible senior notes from institutional investors. Those notes, while not carrying any interest, come due in 2032.

But the big catch—and what shareholders will be closely monitoring—is that if the stock reaches $29.53 or higher by that date, those senior notes can be converted into as many as 11.852 million shares. For context, that figure would represent a more than 5% increase from the 231,460,000 shares outstanding Hims & Hers has previously issued.

That $350 million offering size marks an increase from the $300 million the company originally planned to borrow. However, while the move may have raised some eyebrows, Hims & Hers isn’t aiming to use the funds solely to finance the acquisition of Eucalyptus, but rather as part of a broader strategy to expand its global footprint.

According to the company’s website, “Hims & Hers intends to use the net proceeds from the offering to preserve financial flexibility while executing on its international expansion strategy, including its proposed acquisition of Eucalyptus.”

The Eucalyptus Acquisition Could Validate Hims & Hers’ Expansion Strategy

How that plan takes shape is yet to be seen. But the company’s execution and integration of Eucalyptus are crucial in demonstrating its capacity for future revenue and earnings growth. At the end of fiscal 2025, those metrics showed they are grinding to a halt.

In 2022, year-over-year revenue growth reached a five-year high of nearly 94%. Last year, it had fallen to 59%. Similarly, earnings per share (EPS) growth, which surged to an all-time high of nearly 582% in 2024, turned negative at negative 3.77% in 2025.

Adding insult to injury, Hims & Hers’ Q1 miss marked the company’s third in the last four quarters.

As a result, the stock has become a target of Wall Street’s bears. Current short interest stands at a concerningly high 31.4%, or approximately $1.72 billion worth of shares. Institutional ownership has seen nearly as much selling as buying, with outflows of $1.48 billion barely trailing inflows of $1.75 billion over the past 12 months.

Although analysts have issued HIMS a consensus Hold rating, the consensus price target of around $29 points to a potential upside of over 10%. If the Eucalyptus deal goes off without a hitch, the goal posts could move, and Wall Street may turn bullish on HIMS in short order.