Hims & Hers Health, Inc. has made headlines following its fourth-quarter earnings report, showcasing impressive revenue growth but also facing a notable decline in stock value. The telehealth company reported quarterly GAAP earnings of 11 cents per share, meeting the analyst consensus estimate but experiencing turbulence on the stock market after hours.
For the fourth quarter of 2024, Hims & Hers Health achieved revenue of $481.1 million, which exceeded analysts' expectations of $470.31 million. This marks a staggering 95% increase compared to the same quarter last year when revenue was reported at just $246.6 million. Subscribers also flourished, growing to 2.2 million, representing a 45% year-over-year increase. Despite these achievements, shares fell sharply by nearly 18% as investors honed in on the company's gross margin decline.
According to Andrew Dudum, the CEO of Hims & Hers Health, "2024 was a fantastic year at Hims and Hers as we continue to build a platform...". The successful growth of its subscriber base signifies the trust customers place in the company to support their health journeys, with thousands of new members joining daily.
Hims & Hers also recorded a gross margin of 77% for the fourth quarter, down from 83% the previous year, which was below the expected 78.4%. This unexpected decline raised concerns among investors, overshadowing the impressive revenue performance. Dudum added, "Over 2 million subscribers now entrust Hims & Hers to aid them..." highlighting the company's focus on personalized healthcare.
Hims & Hers CFO, Yemi Okupe, stated, "The success we are experiencing is... democratize access to high quality, personalized care..." emphasizing the company's commitment to improving access to health and wellness solutions across various sectors including skincare, mental health, and weight management. Despite the downturn, the company also reported net income climbing to $26 million from just $1.25 million last year.
Looking to the future, Hims & Hers has provided guidance for the first quarter of 2025, expecting revenue between $520 million and $540 million, significantly above the consensus estimate. The company anticipates full-year revenue for 2025 could reach between $2.3 billion and $2.4 billion, with its adjusted EBITDA projected at $270 million to $320 million.
Throughout the year, Hims & Hers has carved out significant market share, particularly with its weight management solutions, which contributed heavily to the revenue spike. This success was partly fueled by early adoption of GLP-1 medications, but the recent FDA announcement resolving the shortage of semaglutide products has raised concerns about future sales. Indeed, the stock faced challenges previously, dropping 26% after the FDA news hit the markets.
While analysts had expected 11 cents earnings per share, the market's reaction indicates cautious sentiment surrounding the sustainability of growth, particularly as gross margins have shrunk. Moving forward, Hims & Hers aims to leverage technology and personalization to tackle traditional healthcare models, promising exciting developments for subscribers and investors alike.
Despite this stock volatility, the company has demonstrated resilience through significant subscriber growth and operational efficiency. If Hims & Hers continues on this path, the outlook may yet prove to be brighter, ensuring continued access to innovative healthcare solutions.